SB 0159

This bill provides for survivor benefits and options for spouses and designated beneficiaries of deceased retirement system members.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Accidental Death; Group I; Option to Lump Sum Payment. Amend RSA 100-A:8, I(a) to read as follows:

(a) If, upon the receipt by the board of trustees of proper proof of the death of a group I member in service indicating that such death was the natural and proximate result of an accident occurring while in the performance of duty at some definite time and place, the board decides that death was the result of an accident in the performance of duty and not caused by willful negligence on the part of the member, a state annuity shall be paid to his widow, to continue during her widowhood; or if there is no widow, or if the widow dies or remarries before the youngest child of the deceased member has attained age 18, then to his child or children under such age, divided in such manner as the board in its discretion shall determine, to continue as a joint and survivorship state annuity for the benefit of such child or children under said age until every child dies or attains said age; or if there is no widow or child under age 18 living at the death of the member, then to his dependent father or dependent mother as the board shall determine, to continue for life; or if the deceased member is a female, the foregoing benefits shall be payable to her widower, children or dependent parents only in like manner and amount; provided that if none of the aforementioned beneficiaries is living or eligible for benefits under the provisions of this section, there shall be payable to the person or persons nominated by the member, if living, otherwise to the member's estate, a lump sum amount which is equal to the deceased member's base salary plus accrued benefits not paid at the time of death, in addition to the amount payable under RSA 100-A:11. In lieu of such lump sum amount, the designated beneficiary or beneficiaries may elect to receive the applicable ordinary death benefit that, under RSA 100-A:9, would have been payable to the beneficiary or beneficiaries if the member's death had not been the result of an accident occurring while in the performance of duty.

2 Accidental Death; Group II; Option to Lump Sum Payment. Amend RSA 100-A:8, II(a) to read as follows:

(a) If, upon the receipt by the board of trustees of proper proof of the death of a group II member in service indicating that such death was the natural and proximate result of an accident occurring while in the performance of duty at some definite time and place, or as the natural and proximate result of repeated trauma or gradual degeneration occurring while in the actual performance of duty or arising out of and in the course of employment or of any occupational disease arising out of or in the course of employment, as defined by RSA 281-A:2, XI and found to be compensable by the commissioner of labor pursuant to RSA 281-A:43; the board decides that death was the result of an accident in the performance of duty and not caused by willful negligence on the part of the member, a state annuity shall be paid to the member's surviving spouse, to continue until the surviving spouse remarries; or if there is no surviving spouse, or if the surviving spouse dies or remarries before the youngest child of the deceased member has attained age 18, then to the deceased members' child or children under such age, divided in such manner as the board in its discretion shall determine, to continue as a joint and survivorship state annuity for the benefit of such child or children under said age until every child dies or attains said age; or if there is no surviving spouse or child under age 18 living at the death of the member, then to the member's dependent father or dependent mother as the board shall determine, to continue for life; provided that if none of the aforementioned beneficiaries is living or eligible for benefits under the provisions of this section, there shall be payable to the person or persons nominated by the member, if living, otherwise to the member's estate, a lump sum amount which is equal to the deceased member's base salary plus accrued benefits not paid at the time of death, in addition to the amount payable under RSA 100-A:11. In lieu of such lump sum amount, the designated beneficiary or beneficiaries may elect to receive the applicable ordinary death benefit that, under RSA 100-A:9, would have been payable to the beneficiary or beneficiaries if the member's death had not been the result of an accident occurring while in the performance of duty.

3 Ordinary Death Benefit. RSA 100-A:9 is repealed and reenacted to read as follows:

I. Upon receipt by the board of trustees of proper proof of the death of a group I or group II member in service indicating that such death was not the result of an accident occurring while in the performance of duty, there shall be a death benefit payable to either the member's surviving spouse or, if the member has designated a beneficiary other than the member's spouse, the member's designated beneficiary or beneficiaries, if living, otherwise to the member's estate.

II. If the member was eligible for service retirement pursuant to RSA 100-A:5, I(a) or (c), RSA 100-A:5, II(a), or RSA 100-A:19-b at the time of the member's death, there shall be payable to the member's surviving spouse or designated beneficiary or beneficiaries, if living, a service retirement allowance, continuing until death equal to the survivor benefit payable under RSA 100-A:13, III, Option 2 had the member retired immediately prior to death, based on average final compensation and creditable service at the time of death. In lieu of the allowance, the surviving spouse or designated beneficiary or beneficiaries may elect to receive the lump sum benefit set forth in paragraph IV. If the member's spouse beneficiary or the member's designated non-spouse beneficiary or beneficiaries predecease the member, the member's estate shall receive the lump sum benefit set forth in paragraph IV.

III. If the member has at least 10 years combined creditable service, but was not eligible for service retirement pursuant to RSA 100-A:5, I(a) or (c), RSA 100-A:5, II(a), or RSA 100-A:19-b at the time of the member's death and has not designated a beneficiary or beneficiaries other than the member's spouse, there shall be payable to the member's surviving spouse an allowance, continuing until the spouse's death or remarriage, equal to 50 percent of the service retirement allowance that would have been payable to the member had the member retired immediately prior to death, based on average final compensation and creditable service at the time of death. In lieu of such allowance, the surviving spouse may elect the lump sum benefit set forth in paragraph IV. If the member has designated a beneficiary or beneficiaries other than the member's spouse, the designated beneficiary or beneficiaries, if living, otherwise the member's estate, shall receive the lump sum benefit set forth in paragraph IV.

IV. If the member did not have at least 10 years combined creditable service and was not eligible for service retirement at the time of death, there shall be payable to the member's surviving spouse or the member's designated beneficiary or beneficiaries, if other than a spouse, if living, otherwise to the member's estate, a lump sum benefit equal to the deceased member's annual earnable compensation at the time of death in addition to the amount payable under RSA 100-A:11.

V. A member may designate multiple beneficiaries, however, only the member's spouse and/or children shall be eligible to receive the survivor benefit set forth in paragraph II. When a survivor benefit is payable to multiple beneficiaries, the unanimous written consent of all multiple beneficiaries is required to authorize the receipt of a lump sum death benefit in lieu of the survivor benefit. If a member designates, as a multiple beneficiary, any person other than the member's spouse and/or children, all of the member's designated multiple beneficiaries shall be limited to receipt of the lump sum benefit in paragraph IV.

VI. Any beneficiary designation properly executed by a member and timely filed with the retirement system shall revoke any beneficiary designation previously filed by the member.

4 Optional Allowances; Survivorship Option. Amend RSA 100-A:13, I to read as follows:

I. [~~Any member who has reached service retirement age as provided in RSA 100-A:5, I(a), or II(a), or RSA 100-A:19-b,~~] Any eligible member applying for retirement or any retiree within 120 days after the effective date of retirement, may elect to receive, instead of the retirement allowance otherwise payable, a retirement allowance of equivalent actuarial value under one of the options named in paragraph III, or to redesignate any such option previously elected. When the member elects to receive an optional retirement allowance under paragraph III, the beneficiary or beneficiaries whom the member nominates may include the member's spouse and/or children. The notice of non-election, election, or change of retirement option shall be on a form designated by the board, which, if the member is married, shall include a spousal acknowledgment. The optional allowance shall be effective upon retirement if the election is made before the effective date of retirement, and on the first day of the month following receipt by the board of the notice of election or change of option if made during the 120-day grace period. When an election or change of option is made during the 120-day grace period, no retroactive adjustments will be made in payments already received by the retiree. After expiration of the 120-day grace period no change in option selection shall be permitted except as provided in paragraph II. If a retiree dies after filing notice of election or change of option during the 120-day grace period but before the effective date, the election or change shall be effective as of the date of death. If a member dies after filing an election for a survivorship retirement option and before the effective date of retirement, [~~whether or not the member has filed for retirement,~~] the beneficiary who was nominated by the member in the election of the option may elect to receive either the optional survivor benefit which the member had elected or the ordinary death benefit provided under RSA 100-A:9, whichever is more advantageous to the beneficiary[; provided that, in the case of the member's death before retirement, if the beneficiary named in the survivorship option election is not the same person as the beneficiary under RSA 100-A:9, then the death benefit under RSA 100-A:9, II, and not the survivorship option shall apply].

5 New Paragraph; Optional Allowances; Beneficiary Designation. Amend RSA 100-A:13 by inserting after paragraph III the following new paragraph:

IV. Any beneficiary designation properly executed by a member and timely filed with the retirement system shall revoke any beneficiary designation previously filed by the member.

The System stated this bill would allow a designated beneficiary or beneficiaries to elect in lieu of a lump sum amount, the applicable ordinary death benefit under RSA 100-A:9 that would have been payable to them if the member's death had not been the result of an accident occurring while in the performance of duty. Benefits would be as follows:

I. Spouses or beneficiaries of members who are eligible for a service retirement allowance under RSA 100-A:5, I(a) or (c) would receive a 100% joint and survivor benefit;

II. Spouses or beneficiaries of members who have at least 10 years of creditable service but who are not eligible for a service retirement under RSA 100-A:5, I(a) or (c) would receive a benefit equal to 50% of the service retirement allowance; and

III. Spouses or beneficiaries who have less than 10 years of creditable service would receive a lump sum equal to the deceased member's annual compensation.

The System states this bill would increase normal rates (% rate of employer contribution) by .11% for Employee members, .08% for Teacher members, .03% for Policemen members, and .02% for Firefighter members. This increase in normal rates will total approximately $712,000, $533,000, $45,000, and $13,000, for the respective member groups.

The System states this bill will eliminate the actuarial loss that occurs each time a member dies in active service, since the cost of the 100% joint and survivor benefit for death in active service will be funded while the member is working rather than at the time of death.

The System estimates a one-time administrative expense of $15,000 in FY 2001 to modify the System's computer program, and estimates an annual administrative expense for NHRS staff of $3,000 in FY 2001 and each year thereafter.

The Actuary's letter is on file in the bill jacket in the Senate Clerk's Office.