If you die before retiring
After you retire, your payment option decides what continues. Death benefits have their own tax rules. The Survivor's Alternate Benefit is also defined in the glossary.
Death before retirement: beneficiary receives contributions plus 4% interest compounded annually, as a lump sum. Handbook: Death Benefits (Active), Return of Contributions
Death in active service after one year as a contributing member (or within 180 days of leaving, contributions not withdrawn): lump sum equal to your highest 12 consecutive months of salary in the 24 months before death, at least $25,000 and at most $50,000. Handbook: Death Benefits (Active), Lump-Sum Death Benefit for Active Employees
| Highest 12 months of pay | $20,000 | $40,000 | $60,000 |
|---|---|---|---|
| Lump-sum death benefit | $25,000 | $40,000 | $50,000 |
Survivor's Alternate Benefit
- 20 years of creditable service (not counting sick leave), any age
- Age 60 with five years of creditable service
If there is only one eligible beneficiary and you die in service (or within 180 days of your last day of service) before retiring, that beneficiary may take a lifetime monthly benefit equal to Option 2 as if you had retired on the first of the month after your death. Handbook: Death Benefits (Active), Survivor's Alternate Benefit
Public safety workers who die in the line of duty: beneficiary may also get a $100,000 line-of-duty benefit (N.C. Industrial Commission and Treasurer). Handbook: Death Benefits (Active)
After you retire
Options 2, 3, 6-2 and 6-3 pay your survivor for life. Payment options.
If you and your survivor beneficiary both die before total payments equal your contributions plus interest, the balance goes to another beneficiary. Handbook: Death Benefits (Retiree), Guaranteed Refund
Optional $10,000 Contributory Death Benefit for retirees: elect within 60 days of retirement. Death on/after the first of the month after the 24th month of coverage pays $10,000; earlier, premiums plus interest. Handbook: Death Benefits (Retiree), Optional $10,000 Contributory Death Benefit
The payment for the month of death belongs to the retiree; later payments must be returned. Handbook: Death of a Member
- If you die before retiring, your beneficiary gets your contributions plus interest. If you were in active service after one year of contributions, they also get a lump sum equal to your highest 12 months of pay, between $25,000 and $50,000.Handbook: Death Benefits (Active)
- With 20 years of service (not counting sick leave), or at 60 with five years, a single beneficiary can choose a lifetime monthly benefit instead: what you'd have gotten under Option 2.Handbook: Death Benefits (Active), Survivor's Alternate Benefit
- Retirees can buy an optional $10,000 death benefit within 60 days of retiring. It pays in full after 24 months of coverage.Handbook: Death Benefits (Retiree), Optional $10,000 Contributory Death Benefit
Questions
What does my family get if I die while working?
Your contributions plus interest, and after a year of contributions a lump sum equal to your highest 12 months of pay, between $25,000 and $50,000.
Can my spouse get a monthly benefit instead?
Yes, if you had 20 years of service (not counting sick leave) or were 60 with five years, and there's only one eligible beneficiary. It equals what you'd have gotten under Option 2.
What happens after I retire?
That depends on your payment option. Options 2, 3, 6-2 and 6-3 keep paying your survivor. The guaranteed refund and the optional $10,000 death benefit may also pay.
Source: TSERS Handbook, Online handbook, pages modified Nov. 2024 - Oct. 28, 2026 (retrieved Nov. 11, 2026), pages Death Benefits (Active), Death Benefits (Retiree), Death of a Member. Also: N.C.G.S. 135-5(m). Last reviewed .