While the nickname may sound ominous, a bill addressing retirement payments during the “month of death” of a retiree or beneficiary is intended to make pension administration more streamlined and more humane for the survivors of the deceased retiree or beneficiary. The legislation is getting committee attention this week.

HB 1312 and its companion SB 5114 come at the request of the Select Committee on Pension Policy. The bills require the Department of Retirement Services (DRS) to continue paying retirement benefits to a retiree’s or a beneficiary’s estate until the end of the month in which the retiree or beneficiary died. Survivor benefits, if applicable, would begin the next month. Survivors or the deceased’s estate would still need to refund any benefit payments that are received after the month of the retiree’s or beneficiary’s death.

The bills aim to address an issue under current law where DRS is required to end benefit payments the day the retiree dies. If a payment covering the full month has already been made, the retiree’s estate is currently required to refund a prorated amount back to the department. The bills simplify the process by not requiring reimbursement of prorated benefits from grieving families.

The concept of paying full benefits for the month of death has been around for several sessions, including most recently last year. According to the fiscal note, the bills could result in a small increase in contribution rates from employers and employees, and it is estimated to cost local government employers an additional $12 million in the 2025-27 biennium across all state pension systems.

Dates to remember

HB 1312 is scheduled for a hearing in the House Appropriations Committee on January 27 at 4 pm.