As used in this chapter, unless a different meaning is plainly required by the context:
(1) "Accumulated contribution" means the sum of all the amounts deducted from the compensation of a member and credited to the members individual account in the employee annuity savings fund, together with regular interest on the account, as provided in Article 9 of this chapter.
(2) "Active member" means an employee who is compensated by an employer participating in the system and who is making regular retirement contributions to the system.
(3) "Actuarial equivalent" means a benefit of equal value when computed upon the basis of mortality tables adopted by the board and regular interest.
(4) "Average final compensation" with respect to those members retiring on or after July 1, 1986, means the average annual earnable compensation of a member during the twelve consecutive quarters of his creditable service on which regular contributions as a member were made to the system producing the highest such average; a quarter means a period January through March, April through June, July through September, or October through December. An amount up to and including forty-five days' termination pay for unused annual leave at retirement may be added to the average final compensation. Average final compensation for an elected official may be calculated as the average annual earnable compensation for the thirty-six consecutive months before the expiration of the elected official's term of office.
(5) "Beneficiary" means a person in receipt of a pension, an annuity, a retirement allowance or other benefit provided under the system.
(6) "Board" means the State Budget and Control Board which shall act under the provisions of this chapter through its Division of Retirement Systems.
(7) "Creditable service" means a member's earned service, prior service, and purchased service.
(8) "Earnable compensation" means the full rate of the compensation that would be payable to a member if the member worked the member's full normal working time; when compensation includes maintenance, fees, and other things of value the board shall fix the value of that part of the compensation not paid in money directly by the employer.
(9) "Earned service" means:
(a) paid employment as a teacher or employee of an employer participating in the system where the teacher or employee makes regular retirement contributions to the system; or
(b) service rendered while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four Year and Postgraduate Institutions of Higher Education that has been purchased pursuant to Section 9-1-1140(F); or
(c) service earned as a participant in the system, the South Carolina Police Officers Retirement System, the Retirement System for Members of the General Assembly, or the Retirement System for Judges and Solicitors that is transferred to or purchased in the system.
(10) "Educational service" means paid service as a classroom teacher in a public, private, or sectarian school providing elementary or secondary education, kindergarten through grade twelve.
(11) "Employee" means:
(a) to the extent compensated by this State, an employee, agent, or officer of the State or any of its departments, bureaus, and institutions, other than the public schools, whether the employee is elected, appointed, or employed;
(b) the president, dean, professor, or teacher or any other person employed in any college, university, or educational institution of higher learning supported by and under the control of the State;
(c) an employee, agent, or officer of a county, municipality, or school district, or an agency or department of any of these, which has been admitted to the system under the provisions of Section 9-1-470, to the extent the employee, agent, or officer is compensated for services from public funds;
(d) an employee of the extension service and any other employee a part of whose salary or wage is paid by the federal government if the federal funds from which the salary or wage is paid before disbursement become state funds;
(e) an employee of a service organization, the membership of which is composed solely of persons eligible to be teachers or employees as defined by this section, if the compensation received by the employees of the service organization is provided from monies paid by the members as dues or otherwise, or from funds derived from public sources and if the employee contributions prescribed by this title are paid from the funds of the service organization;
(f) an employee of an alcohol and drug abuse planning agency authorized to receive funds pursuant to Section 61-12-20;
(g) an employee of a local council on aging or other governmental agency providing aging services funded by the Office on Aging, Office of the Lieutenant Governor.
"Employee" does not include supreme and circuit court judges, any person whose services are remunerated solely by per diem payments, or any person employed by a school, college, or university at which the person is enrolled as a student or otherwise regularly attending classes for academic credit unless the person is employed as a school bus driver and is paid by the same school district in which the person is enrolled in school. In determining student status, the system may consider the guidelines of the Social Security Administration regarding student services and other criteria the system uniformly prescribes.
(12) "Employee annuity" means annual payments for life derived from the accumulated contributions of a member.
(13) "Employee annuity reserve" means the present value of all payments to be made on account of an employee annuity or benefit in lieu of the employee annuity, computed on the basis of mortality tables adopted by the board and regular interest.
(14) "Employer" means this State, a county board of education, a district board of trustees, the board of trustees or other managing board of a state-supported college or educational institution, or any other agency of this State by which a teacher or employee is paid; the term "employer" also includes a county, municipality, or other political subdivision of the State, or an agency or department of any of these, which has been admitted to the system under the provisions of Section 9-1-470, a service organization referred to in item (11)(e) of this section, an alcohol and drug abuse planning agency authorized to receive funds pursuant to Section 61-12-20, and a local council on aging or other governmental agency providing aging services funded by the Office on Aging, Office of the Lieutenant Governor.
(15) "Employer annuity" means annual payments for life derived from money provided by the employer.
(16)"Employer annuity reserve" means the present value of all payments to be made on account of an employer annuity or benefit in lieu of the employee annuity, computed on the basis of mortality tables adopted by the board and regular interest.
(17) [Reserved]
(18) "Member" means a teacher or employee included in the membership of the system as provided in Article 5 of this chapter.
(19) "Military service" means:
(a) service in the United States Army, United States Navy, United States Marine Corps, United States Air Force, or United States Coast Guard;
(b) service in the select reserve of the Army Reserve, Naval Reserve, Marine Corps Reserve, Air Force Reserve, or the Coast Guard Reserve, and
(c) service as a member of the Army National Guard or Air National Guard of this or any other state.
(20) "Nonqualified service" means purchased service other than public service, educational service, military service, leave of absence, and reestablishment of withdrawals.
(21) "Prior service" means service rendered as a teacher or employee before July 1, 1945, for which credit is allowable under Article 7 of this chapter.
(22) "Public school" means a school conducted within this State under the authority and supervision of a duly elected or appointed school district board of trustees.
(23) "Public service" means service as an employee of the government of the United States, a state or political subdivision of the United States, or an agency or instrumentality of any of these. "Public service" does not include "educational service" or "military service" as defined in this section. "Public service" does include paid service rendered as an employee of a postsecondary public technical college or public junior college, or a public four-year or postgraduate institution of higher education, while the member was a student at that institution.
(24) "Purchased service" means service credit purchased by an active member while an employee of an employer participating in the system.
(25) "Regular interest" means interest compounded annually at a rate determined by the board in accordance with Section 9-1-280.
(26) "Retirement" means the withdrawal from active service with a retirement allowance granted under the system.
(27) "Retirement allowance" means the sum of the employer annuity and the employee annuity or any optional benefit payable in lieu of the annuity.
(28) "Retirement system" or "system" means the South Carolina Retirement System established under Section 9-1-20.
(29) "State" or "this State" means the State of South Carolina;
(30) "Teacher" means a classroom teacher employed in the public schools supported by this State as determined by the board.
SECTION 9-1-20. South Carolina Retirement System created; System shall have powers and privileges of corporation; purposes of System.
A retirement system is hereby established and placed under the management of the State Budget and Control Board for the purpose of providing retirement allowances and other benefits for teachers and employees of the State and political subdivisions or agencies or departments thereof. The System so created shall have the power and privileges of a corporation and shall be known as the South Carolina Retirement System, and by such name all of its business shall be transacted, all of its funds invested and all of its cash, securities and other property held.
SECTION 9-1-30. Property of System exempt from taxation.
All property owned or acquired by the Retirement System for the purposes of this chapter shall be exempt from all taxes imposed by the State or any political subdivision thereof.
SECTION 9-1-40. Penalties for making false statement or record.
Any person who shall knowingly make any false statement or shall falsify or permit to be falsified any record of the System in any attempt to defraud the System as a result of such act shall be guilty of a misdemeanor and, on conviction thereof by any court of competent jurisdiction, shall be punished by a fine not exceeding five hundred dollars or imprisonment in the county jail not exceeding twelve months, or both such fine and imprisonment at the discretion of the court.
SECTION 9-1-50. Reservation of right to revise System to conform to changes in Federal Social Security Act.
The State hereby reserves the right, in case the Federal Social Security Act be so amended that the members or beneficiaries of the System can be included in the old age and survivors insurance plan provided for in said Federal Act, to revise the System upon a fair and equitable basis so that the members or beneficiaries of the System may be included under the provisions of said Federal Act.
SECTION 9-1-60. Implementation of "cafeteria" plan.
(A) The System may develop and implement a program for the administration of a flexible benefits or "cafeteria" plan as defined by Section 125 of the Internal Revenue Code of 1986 for all employees covered by the health and dental insurance plan administered by the System. The plan may not decrease contributions paid to or benefits paid by the System.
The South Carolina Department of Highways and Public Transportation is herewith authorized to continue its independent cafeteria or flexible benefits pilot plan and to modify and implement the plan to accomplish maximum available benefits under Internal Revenue Section 125, until such time as the Comptroller General can convert Department of Transportation employees into the state cafeteria plan.
(B) Political subdivisions may develop and implement a program for the administration of a flexible benefits or "cafeteria" plan as defined by Section 125 of the Internal Revenue Code of 1986, as amended, for their employees. The plan may not decrease contributions paid to or benefits paid by the system. For political subdivisions that also participate in the plan adopted pursuant to subsection (A) of this section, any separate cafeteria plan adopted pursuant to this subsection may provide benefits in addition to, but shall not include, the specific types of benefits provided to employees under the plan adopted pursuant to subsection (A) of this section.
(C) An employer or coalition of employers working in concert may develop and implement a program for the administration of a flexible benefits or "cafeteria" plan as defined by Section 125 of the Internal Revenue Code of 1986, as amended, for their employees. The plan may not decrease contributions paid to or benefits paid by the system. For employers or coalition of employers working in concert, that also participate in the plan adopted pursuant to subsection (A) of this section, any separate cafeteria plan adopted pursuant to this subsection may provide benefits in addition to, but shall not include, the specific types of benefits provided to employees under the plan adopted pursuant to subsection (A) of this section.
SECTION 9-1-70. Repealed by 1990 Act No. 458, Section 2, eff May 3, 1990.
SECTION 9-1-80. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-100. Payments to beneficiaries may include payments to persons, trustees, and estates.
Payments made to beneficiaries pursuant to the provisions of this chapter may include payments to a person or persons, trustees, and estates.
ARTICLE 3.
ADMINISTRATION
SECTION 9-1-210. State Budget and Control Board shall administer System.
The general administration and responsibility for the proper operation of the System and for making effective the provisions hereof are hereby vested in the State Budget and Control Board.
SECTION 9-1-220. Repealed by 2005 Act No. 153, Pt. III Section 5, eff July 1, 2005.
SECTION 9-1-230. Authority to engage actuarial and other services.
The Board shall engage such actuarial and other services as shall be required to transact the business of the System.
SECTION 9-1-240. Appointment and duties of actuary.
The Board shall designate an actuary who shall be the technical adviser of the Board on matters regarding the operation of the System and shall perform such other duties as are required in connection therewith.
SECTION 9-1-250. Investigation and valuation by actuary every five years.
At least once in each five-year period, the first of which began in 1947, the actuary shall make an actuarial investigation into the mortality, service and compensation experience of the members and beneficiaries of the System and shall make a valuation of the contingent assets and liabilities of the System and the Board, after taking into account the results of such investigations and valuations, shall adopt for the System such mortality, service and other tables as shall be deemed necessary.
SECTION 9-1-260. Annual valuation by actuary.
On the basis of regular interest and tables last adopted by the Board the actuary shall make an annual valuation of the contingent assets and liabilities of the System.
SECTION 9-1-270. Board shall keep actuarial data in convenient form.
The Board shall keep in convenient form such data as shall be necessary for actuarial valuation of the contingent assets and liabilities of the System and for checking the experience of the System.
SECTION 9-1-280. Board shall determine interest rate; base rate established.
The Board shall determine from time to time the rate of regular interest for use in all calculations, with the rate of four per cent per annum applicable unless heretofore or hereafter changed by the Board.
SECTION 9-1-290. Rules and regulations.
Subject to the limitations hereof, the Board shall, from time to time, establish rules and regulations for the administration of the System and for the transaction of business. The Board shall also, from time to time, in its discretion, adopt rules and regulations to prevent injustices and inequalities which might otherwise arise in the administration of the System.
SECTION 9-1-300. Records and reports.
The Board shall keep a record of all its proceedings under this chapter, which shall be open to public inspection. It shall publish annually a report showing the fiscal transactions of the System for the preceding year, the amount of the accumulated cash and securities of the System and the last balance sheet showing the financial condition of the System by means of an actuarial valuation of the contingent assets and liabilities of the System.
SECTION 9-1-310. Administrative costs of retirement systems funded from interest earnings; allocation of costs.
The administrative cost of the South Carolina Retirement System, the South Carolina Police Officers Retirement System, the Retirement System for Members of the General Assembly of the State of South Carolina, the Retirement System for Judges and Solicitors of the State of South Carolina, and the National Guard Retirement System must be funded from the interest earnings of the above systems. The allocation of the administrative costs of the systems must be made by the State Budget and Control Board and must be based upon a proration of the cost in proportion to the assets that each system bears to the total assets of all of the systems for the most recently completed fiscal year.
SECTION 9-1-320. Confidentiality of member records.
All records of all active, retired, and inactive members maintained by the South Carolina Retirement Systems are classified as confidential records. These records are exempt from the disclosure requirements of Chapter 4 of Title 30, and shall not be disclosed to third parties, except where authorized by the member or where requested by state and federal authorities, and then only at the sole discretion of the director of the South Carolina Retirement Systems.
ARTICLE 5.
MEMBERSHIP IN SYSTEM
SECTION 9-1-410. Membership generally.
The membership of the System shall be composed as provided in this article.
SECTION 9-1-420. Certain persons employed after December 31, 1948, are automatically members of System.
All persons who have or shall become teachers or employees after December 31, 1948, except those specifically excluded under Section 9-1-450 or those as to whom membership is optional under Sections 9-1-510 to 9-1-560, have become or shall become members of the System as a condition of their employment.
SECTION 9-1-425. Contributing member of system.
Notwithstanding any other provision of law, a contributing member of the System shall remain a contributing member while under employment to an employer covered by the System.
SECTION 9-1-430. Special provision for certain persons employed between April 26, 1945 and December 31, 1966.
All persons who were teachers or State, county or municipal employees on April 26, 1945, or who became such after this date but on or before December 31, 1966, except those specifically excluded under Section 9-1-450 and the persons permitted to exercise the option under Sections 9-1-510 to 9-1-560, became members as of July 1, 1945, or as of the date of last employment, if later, unless on or before December 31, 1948, they filed with the Board on a form prescribed by the Board a notice of their election not to be covered in the membership of the System and a duly executed waiver of all present and prospective benefits which would otherwise inure to them on account of their participation in the System.
SECTION 9-1-440. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-450. Members of other agency or departmental retirement plans.
Notwithstanding any provisions to the contrary, any teacher or employee who was a member of any other retirement plan or fund in operation on April 26, 1945 under sponsorship of any governmental agency or department shall not be entitled to membership in the System unless on or before July 1, 1946 any such teacher or employee indicated by a notice filed with the Board on a form prescribed by the Board his individual election and choice to participate in the System. If a majority of the members of any such retirement plan or fund so voted all members of that retirement plan or fund became eligible to participate in the System and became members of the System unless within thirty days next succeeding a date named by the Board they elected not to become members.
SECTION 9-1-460. Discontinuance of certain local plans or funds.
If the majority of the members of a retirement or pension plan or fund voted to enter the System in the manner described in Section 9-1-450, the local plan or fund was discontinued and the payment of all pensions to members on the pension roll as of the date of discontinuance became and is an obligation of the city, county or other unit in which the plan or fund was operated and shall be continued and paid by such city, county or other unit.
SECTION 9-1-470. Political subdivisions may apply for admission to System as employers.
A county, municipality, or other political subdivision of the State, an agency or department of them, including a school board, a service organization as defined in Section 9-1-10(11)(e), and any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, in its discretion, may become an employer by applying to the board for admission to the system and by complying with the requirements and the regulations of the board.
SECTION 9-1-480. Employees of political subdivisions as members.
All persons, except those specifically excluded in Sections 9-1-450 and 9-1-490 and the persons permitted to exercise the option under Sections 9-1-510 to 9-1-560, who are employed by any county, municipality, or other political subdivision or agency or department of them, any eligible service organization, or any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, after the admission of the county, municipality, or other subdivision, agency, or department of them, service organization, or any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, into the System under the provisions of this section, shall become members of the System as a condition of their employment. All persons, except those specifically excluded in Section 9-1-450 and persons permitted to exercise the option under Sections 9-1-510 to 9-1-560, who are employed by any county, municipality, or other political subdivision or agency or department of them, by any eligible service organization, or any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, at the date of the admission of the county, municipality, or other subdivision or agency or department, or eligible service organization, or any nonprofit corporation created under the provisions of Chapter 35, Title 33, for the purpose of supplying water and sewer, into the System under the provisions of this section become members on the date of the admission, unless within a period of six months next following the admission they have filed with the Board on a form prescribed by the Board a notice of their election not to be covered in the membership and a duly executed waiver of all present and prospective benefits which would otherwise inure to them on account of their participation in the System.
SECTION 9-1-490. Firemen and peace officers.
A person employed by the State or by any county, municipality or other political subdivision in the capacity of a fireman or a peace officer shall not be required to participate in the Retirement System if such person is or becomes a member of any fireman's pension fund or plan which may be established or created pursuant to law or the police insurance and annuity fund.
SECTION 9-1-500. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-510. Option of employees and teachers receiving $100 or less a month; legislators, and certain elected officials.
All employees and teachers having a monthly compensation from public funds of one hundred dollars or less and members of the General Assembly may exercise the option within thirty days after entering upon the discharge of such duties not to become a member of the System. Elected officials who are not fulltime employees and who earn nine thousand dollars annually, or less, may exercise an option not to become members of the system.
SECTION 9-1-520. Certain members of General Assembly may elect to remain members of System; contributions.
Members of the General Assembly who have been members of the South Carolina Retirement System for at least ten years may elect to remain a member of the System within one year following termination of service in the General Assembly and shall make yearly contributions to the System in an amount equivalent to contributions payable by active members of the General Assembly.
SECTION 9-1-530. Certain former legislators may elect to remain members following termination of service; contributions; members must establish service and qualify for allowance on or before December 31, 1965.
Members of the General Assembly who have been members of the South Carolina Retirement System and a member of the General Assembly for at least eight years may elect to remain a member of the System within one year following termination of service in the General Assembly and shall make yearly contributions to the System in an amount equivalent to contributions payable by active members of the General Assembly. Such members may establish such service and qualify for a retirement allowance from the Retirement System provided they do so on or before December 31, 1965.
SECTION 9-1-540. Certain constitutional officers and members of General Assembly may elect, prior to December 31, 1965, to return to System.
Any constitutional officer who has been a member of the South Carolina Retirement System and who has at least ten years of creditable service either as a constitutional officer or as a member of the General Assembly, or a combination of both under the System and who has separated prior to May 28, 1965 may elect to come under the provisions hereof; provided, he makes such election on or before December 31, 1965, and has not withdrawn his contributions from the System. Such constitutional officer shall make yearly contributions to the System in an amount equivalent to contributions payable by active members of the General Assembly.
SECTION 9-1-550. Option of certain public school employees.
Any teacher or employee employed in connection with the public school pupil transportation system or in connection with any program or activity defined by the Board as being of a nonpermanent nature may exercise an option not to become a member of the System, if such option is exercised within thirty days after entering upon the discharge of his duties in such employment.
SECTION 9-1-560. Option of day laborers.
Day laborers may exercise an option not to become members of the System, provided they file notice thereof within thirty days after beginning work as such day laborers.
SECTION 9-1-570. Option of State employees required to become members of Federal Railroad Retirement System.
Any person who becomes an employee of the State and, because of the nature of his employment, is required to become a member of the Federal Railroad Retirement System, may elect to become, or not to become, a member of the South Carolina Retirement System, provided that such option is exercised within thirty days after he enters upon the discharge of the duties of such position.
SECTION 9-1-580. Option of certain hospital employees.
(A) Any persons employed by a hospital, which is an employer under the system by application, in the capacity of a physician, nursing service personnel, technicians, housekeeping personnel, dietary personnel, and laundry personnel may elect not to become members of the South Carolina Retirement System, if this option is exercised within thirty days after they enter upon the discharge of their duties. The option provided for in this section is irrevocable.
(B) If for any reason, a determination is made that a person who exercised the option provided for in subsection (A) is entitled to any benefit provided pursuant to this title, the cost to establish service credit must be calculated pursuant to Section 9-1-1140(A). This calculation must be based on the person's current salary or career highest fiscal year salary for any period of time the person was employed in a position that otherwise would have been covered by membership in the system, regardless of whether the person requests to purchase all of the eligible service credit. The calculated cost must be paid solely by the person's employer, the person, or any combination of these.
(C) For purposes of this section, "physician" means a person who is licensed to practice medicine or osteopathy in this State in accordance with Chapter 47, Title 40.
SECTION 9-1-610. Determination of who is teacher or employee.
In all cases of doubt, the Board shall determine whether any person is a teacher or employee for the purposes of the System.
SECTION 9-1-620. Effect on members, beneficiaries, their widows or other dependents, of other statutes.
Subject to the provisions of Chapter 5 of this Title, no other provisions of law in any other statute which provides wholly or partly at the expense of the State for annuities, pensions or retirement benefits for teachers or employees of the State, their widows or other dependents, shall apply to members or beneficiaries of the System, their widows or other dependents.
SECTION 9-1-630. Certain persons may withdraw from System.
The Director of the South Carolina Retirement System is authorized to permit any member of the System who has joined through error or misunderstanding to withdraw from the System.
SECTION 9-1-640. Employers and members divided into two classes; change from Class One to Class Two.
Notwithstanding any other provisions of law governing the System, effective July 1, 1964, there shall be two classes of participating employers and two classes of members. Class One employers shall include all employers who irrevocably elect, by written notification to the Board not later than December 31, 1964, to remain, and to have members in their employ remain, under the provisions of the System as in effect on June 30, 1964. Class Two employers shall include all employers who irrevocably elect, by written notification to the Board not later than December 31, 1964, to participate, and to have members in their employ participate, under the provisions of the System as amended effective July 1, 1964. Any such notification shall become effective for all purposes as of July 1, 1964. Failure by any employer to file such notification shall be deemed an irrevocable election by the employer to be a Class One employer. In any event, the State shall be a Class Two employer. Members in the employ of a Class One employer shall be Class One members, and members in the employ of a Class Two employer shall be Class Two members. Any employer becoming such on or after July 1, 1964 shall be a Class Two employer. In the event that a member shall transfer, without break in membership, from one class to another, the Board shall determine his benefit upon retirement in an equitable manner by uniform rules consistent herewith.
Notwithstanding the foregoing, any Class One employer may elect to become a Class Two employer and have employees in its employ participate under the provisions of the System as amended effective July 1, 1964; provided, that such employer and each and every such member shall make such additional contributions to the System, plus regular interest, as would have been required had such employer become a Class Two employer as of July 1, 1964.
Effective July 1, 1976, or any subsequent July first, a Class One employer may elect Class Two coverage on July 1, 1976, or as of July first of any year thereafter. It is mandatory for each Class One employee of any such employer to participate in Class Two coverage from the effective date of the employer election. Upon service retirement, a member shall receive a service retirement allowance equal to the sum of his benefit computed by the Class One formula for service credited under Class One membership and his benefit computed by the Class Two formula for service credited under Class Two membership. A Class One member may convert Class One service to Class Two by paying into the System two and one-half percent of his earnable compensation, or the average of the highest twelve consecutive quarters, whichever is greater, for each year prorated for periods of less than one year. A member who elects to convert from Class One to Class Two must convert all such service for which eligible.
SECTION 9-1-650. Continuation of membership in correlated systems.
As used in this section, "correlated system" shall mean one or more of the following:
(1) South Carolina Retirement System;
(2) South Carolina Police Officers' Retirement System;
(3) Retirement System for members of the General Assembly of the State of South Carolina.
If a member of any correlated system ceases to occupy a position covered under the System and if, within the protective period and under such conditions as are set forth in the correlated system for continuation of membership therein, he accepts a position covered by another correlated system, he shall notify the Director of each System of the employment, and his membership in the first System must be continued so long as his membership in the other System continues. Service credited to the member under the provisions of the first System must be considered service credits for the purpose of determining eligibility for benefits, but not the amount thereof, under the other System. Any benefit under any one of the correlated systems must be computed solely on the basis of service and contributions credited under that System, and must be payable at such times and subject to such age and service conditions as are set forth therein, except the average final salary under either the South Carolina Retirement System or the Police Officers Retirement System may be used for the benefit calculation under both systems for consecutive earned service credit. A member shall not be eligible to receive retirement payments so long as he is employed in a position covered by the South Carolina Retirement System or the South Carolina Police Officers Retirement System.
SECTION 9-1-660. Firemen eligible for Police Officers Retirement System; benefits.
Any county, municipality or other political subdivision of the State and any agency or department thereof which has firemen it employs covered under the South Carolina Retirement System may become an employer and have such firemen covered under the South Carolina Police Officers Retirement System by applying for admission to the System on July 1, 1976, or any subsequent July first. A majority of the persons then employed as firemen by the prospective employer must elect irrevocably to become members of the South Carolina Police Officers Retirement System as of the requested date of admission.
Any fireman who is a member of the South Carolina Retirement System and who becomes a member of the South Carolina Police Officers Retirement System as provided in this section shall be continued as a member under the provisions of the South Carolina Retirement System so long as his membership in the South Carolina Police Officers Retirement System continues. Service credited to the member under the provisions of the South Carolina Police Officers Retirement System shall be considered for the purpose of determining eligibility for benefits but not the amount thereof under the South Carolina Retirement System. Any benefit under either one of these two correlated systems shall be computed solely on the basis of service and contributions credited under that System, but in determining the member's average final compensation, his compensation received during credited service under both Systems shall be taken into account. Such benefits shall be payable at such times and subject to such age and service conditions as provided under the respective Systems; provided, however, a member shall not be eligible to receive retirement payments so long as he is employed in a position covered by the South Carolina Retirement System or the South Carolina Police Officers Retirement System. Notwithstanding the above, the disability retirement benefit shall only be paid from and based on the benefit provisions of the System to which the member is contributing at the time of disability and shall be based on the total of his credited service under both Systems. The amount of accumulated contributions of such disabled member which is credited to his account under the System to which he is not contributing at the time of disability, shall be transferred to the System from which his disability retirement benefit shall be paid.
For the purposes of this section, "fireman" shall mean any person who receives his salary from an employer and who is required by the terms of his employment, either by election or appointment, to give his time to prevention and control of property destruction by fire. No fireman shall be eligible under this section unless his employer certifies to the System that his service as a fireman will require at least one thousand, six hundred hours per year of active duty and that his salary for such service will be at least two thousand dollars per year.
SECTION 9-1-670. Members eligible for membership in South Carolina State Employees Credit Union.
Notwithstanding any other provision of law, any person who is eligible to participate in the South Carolina Retirement System shall also be eligible for membership in the South Carolina State Employees Credit Union.
ARTICLE 7.
CREDITABLE SERVICE
SECTION 9-1-810. Claims for prior service.
Under rules and regulations adopted by the Board, each member who was a teacher or employee at any time prior to July 1, 1945, and who became a member on or before December 31, 1966, was required to file a detailed statement of all service as a teacher or employee rendered by him prior to July 1, 1945, for which he claimed credit.
SECTION 9-1-820. Verification of service claimed; determination of compensation paid during period of prior service.
Subject to the restrictions herein contained and to such other rules and regulations as the Board may adopt, the Board verified or, if such verifications have not been completed, shall verify, as soon as practicable after the filing of such statements under Section 9-1-810, the service therein claimed. In lieu of a determination of the actual compensation of a member that was received during such period of prior service the Board may use for the purpose of the System the compensation rates which, if they had progressed with the rates of salary increase shown in the tables as prescribed in 9-1-250, would have resulted in the same average earnable compensation of the member for five years immediately preceding July 1, 1945 as the records show the member actually received.
SECTION 9-1-830. Prior service certificates.
Upon verification of such statements of service, the Board issued or shall issue prior service certificates certifying to each member the period of service prior to July 1, 1945 with which the member was credited on the basis of his statement of service. So long as membership continues a prior service certificate shall be final and conclusive for retirement purposes as to such service. When membership ceases, such prior service certificate shall become void. Should the teacher or employee again become a member such teacher or employee shall enter the System as a teacher or employee not entitled to prior service credit except as provided in Section 9-1-1590.
SECTION 9-1-840. What constitutes one year of service.
The Board shall fix and determine by appropriate rules and regulations how much service in any year is equivalent to one year of service, but in no case shall more than one year of service be creditable for all services in one year. Service rendered for the regular school year in any district shall be equivalent to one year's service.
SECTIONS 9-1-850, 9-1-860. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTIONS 9-1-850, 9-1-860. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
ARTICLE 9.
THREE FUNDS AND COLLECTIONS FOR FUNDS
SECTION 9-1-1010. Assets to be credited to employee annuity savings fund and employer annuity accumulation fund.
All of the assets of the System are credited, according to the purpose for which they are held, to two bookkeeping accounts, hereinafter referred to as "funds". The accounts are referred to as the employee annuity savings fund and the employer annuity accumulation fund.
SECTION 9-1-1020. Employee annuity savings fund; deductions from compensation of members of System; employer to pay required member contributions on earnings after July 1, 1982; tax treatment; funding; retirement treatment.
The employee annuity savings fund shall be the account in which shall be recorded the contributions deducted from the earnable compensation of members to provide for their employee annuities. Each employer shall cause to be deducted from the compensation of each member on each and every payroll of such employer for each and every payroll period four percent of his earnable compensation. With respect to each member who is eligible for coverage under the Social Security Act in accordance with the agreement entered into during 1955 in accordance with the provisions of Chapter 7 of this Title; however, such deduction shall, commencing with the first day of the period of service with respect to which such agreement is effective, be at the rate of three percent of the part of his earnable compensation not in excess of four thousand eight hundred dollars, plus five percent of the part of his earnable compensation in excess of four thousand eight hundred dollars. In the case of any member so eligible and receiving compensation from two or more employers, such deductions may be adjusted under such rules as the Board may establish so as to be as nearly equivalent as practicable to the deductions which would have been made had the member received all of such compensation from one employer. In determining the amount earnable by a member in a payroll period, the Board may consider the rate of annual earnable compensation of such member on the first day of the payroll period as continuing throughout such payroll period and it may omit deduction from earnable compensation for any period less than a full payroll period if a teacher or employee was not a member on the first day of the payroll period.
Each employer shall certify to the Board on each and every payroll or in such other manner as the Board may prescribe the amounts to be deducted and such amounts shall be deducted and, when deducted, shall be credited to said employee annuity savings fund, to the individual accounts of the members from whose compensation the deductions were made.
The rates of the deductions, without regard to a member's coverage under the Social Security Act, must be the percentage of earnable compensation as provided in the following schedule:
Class One Class Two
Before July 1, 2005 5 6
July 1, 2005 through
June 30, 2006 5.25 6.25
After June 30, 2006 5.50 6.50"
Each department and political subdivision shall pick up the employee contributions required by this section for all compensation paid on or after July 1, 1982, and the contributions so picked up shall be treated as employer contributions in determining federal tax treatment under the United States Internal Revenue Code. For this purpose, each department and political subdivision is deemed to have taken formal action on or before January 1, 2009, to provide that the contributions on behalf of its employees, although designated as employer contributions, shall be paid by the employer in lieu of employee contributions. The department and political subdivision shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The department and political subdivision may pick up these contributions by a reduction in the cash salary of the employee.
The employee, however, must not be given the option of choosing to receive the contributed amount of the pick ups directly instead of having them paid by the employer to the retirement system. Employee contributions picked up shall be treated for all purposes of this section in the same manner and to the extent as employee contributions made prior to the date picked up.
Payments for unused sick leave, single special payments at retirement, bonus and incentive-type payments, or any other payments not considered a part of the regular salary base are not compensation for which contributions are deductible. Contributions are deductible on up to and including forty-five days' termination pay for unused annual leave. If a member has received termination pay for unused annual leave on more than one occasion, contributions are deductible on up to and including forty-five days' termination pay for unused annual leave for each termination payment for unused annual leave received by the member. However, only an amount up to and including forty-five days' pay for unused annual leave from the member's last termination payment shall be included in a member's average final compensation calculation.
SECTION 9-1-1030. Deductions must be made although compensation is thereby reduced below legal minimum; consent to deductions.
The deductions provided for in Section 9-1-1020 shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deduction made and provided for in said section and shall receipt for his full compensation, and payment of such compensation less such deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by such person during the period covered by such payments, except as to the benefits provided hereunder.
SECTION 9-1-1040. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-1050. Employer annuity accumulation fund; contributions shall be paid by employers.
The employer annuity accumulation fund shall be the account:
(1) In which shall be recorded the reserves on all employee annuities in force and against which shall be charged all employee annuities and all benefits in lieu of employee annuities;
(2) In which must be recorded all reserves for the payment of all employer annuities and other benefits payable from contributions made by employers and against which is charged all employer annuities and other benefits on account of members with prior service credit; and
(3) In which shall be recorded the reserves on all employer annuities granted to members not entitled to prior service credit and against which such employer annuities and benefits in lieu thereof shall be charged.
There shall be paid to the System and credited to the employer annuity accumulation fund contributions by the employers in an amount equal to a certain percentage of the earnable compensation of each member employed by each employer to be known as the "normal contribution" and an additional amount equal to a percentage of such earnable compensation to be known as the "accrued liability contribution." The rate per cent of such contributions shall be fixed on the basis of the liabilities of the system as shown by actuarial valuation.
SECTION 9-1-1060. Normal contribution rate.
On the basis of regular interest and of such mortality and other tables as shall be adopted by the Board, the actuary engaged by the Board to make each annual valuation during the period over which the accrued liability contribution is payable, immediately after making such valuation, shall determine the uniform and constant percentage of the earnable compensation of the average new entrant throughout his entire period of active service which would be sufficient to provide for the payment of any employer annuity payable on his account. The rate per cent so determined shall be known as the "normal contribution rate." After the accrued liability contribution has ceased to be payable, the normal contribution rate shall be the rate per cent of the earnable compensation of all members obtained by deducting from the total liabilities of the employer annuity accumulation fund the amount of the funds in hand to the credit of that account and dividing the remainder by one per cent of the present value of the prospective future earnable compensation of all members as computed on the basis of the mortality and service tables adopted by the Board and regular interest. The normal rate of contribution shall be determined by the actuary after each valuation.
The rate per cent determined immediately after the first valuation by the actuary engaged by the Board as the rate per cent of the total annual earnable compensation of all members which is equivalent to four per cent of the amount of the total employer annuity liability on account of all members and beneficiaries which is not dischargeable by the aforesaid normal contribution made on account of such members during the remainder of their active service shall be known as the "accrued liability contribution rate." Such rate shall be increased on the basis of subsequent valuations if benefits are increased over those included in the valuation on the basis of which the original accrued liability contribution rate was determined. Upon certification by the actuary engaged by the Board that the accrued liability contribution rate may be reduced without impairing the System, the Board may cause the accrued liability contribution rate to be reduced.
SECTION 9-1-1080. Minimum contributions to employer annuity accumulation fund.
The total amount payable in each year by each employer for credit to the employer annuity accumulation fund shall not be less than the sum of the rate per cent known as the normal contribution rate and the accrued liability contribution rate of the total earnable compensation of all members during the preceding year. Subject to the provisions of Section 9-1-1070, the amount of each annual accrued liability contribution shall be at least three per cent greater than the preceding annual accrued liability payment, and the aggregate payment by employers shall be sufficient, when combined with the amount in the fund, to provide the employer annuities and other benefits payable out of the fund during the year then current.
SECTION 9-1-1090. Discontinuance of accrued liability contribution.
The accrued liability contribution shall be discontinued as soon as the accumulated reserve in the employer annuity accumulation fund shall equal the present value, as actuarially computed and approved by the Board, of the total liability of such fund less the present value, computed on the basis of the normal contribution rate then in force, of the prospective normal contributions to be received on account of all persons who are at the time members.
SECTION 9-1-1100. Employer annuities and benefits to be paid from employer annuity accumulation fund.
All employer annuities, and benefits in lieu thereof, must be paid from the employer annuity accumulation fund.
SECTION 9-1-1110. Obligations of employer annuity accumulation fund.
The maintenance of employee annuity reserves and employer annuity reserves as provided for hereunder and regular interest creditable to the various funds as provided in this article and the payment of all annuities, retirement allowances, refunds, and other benefits granted hereunder, are made obligations of the employer annuity accumulation fund. All income, interest, and dividends derived from deposits and investments authorized hereunder must be used for payment of the obligations of the fund.
SECTION 9-1-1120. Transfer between funds on return of retired employee to active service.
Should any beneficiary be restored to active service and again become a member under the provisions of Section 9-1-1590, his employee annuity reserve shall be transferred from the employer annuity accumulation fund to the employee annuity savings fund and credited to his individual account therein.
SECTION 9-1-1130. Earnings to be credited to employer annuity accumulation fund.
All interest and dividends earned on the invested assets of the System must be credited to the employer annuity accumulation fund. The Board shall credit regular interest to the individual accounts of members in the employee annuity savings fund and shall transfer the amounts of the credits from the employer annuity accumulation fund. Any interest credited to the individual account of a member in the employee annuity savings fund and not payable to him under the provisions of Section 9-1-1650 upon his ceasing to be a teacher or employee except by death or retirement must be transferred from the fund to the employer annuity accumulation fund.
SECTION 9-1-1135. Interest on member accounts.
Interest shall be credited to the account of each member once each year as of June thirtieth, on the basis of the balance in the account of each member as of the previous June thirtieth. Upon the death, retirement, or termination of a member, interest shall be figured to the end of the month immediately preceding the date of refund or retirement, interest being based on the balance in such member's account as of the June thirtieth immediately preceding the date of refund or retirement.
SECTION 9-1-1140. Establishing service credits by making payments into system; career highest fiscal year salary; credits during absences; employer payments; rules and regulations; credits for unused sick leave.
(A) An active member may establish service credit for any period of paid public service by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated. A member may not establish credit for a period of public service for which the member also may receive a retirement benefit from another defined benefit retirement plan. A member may not establish service credit for public service to the extent such service purchase would violate Section 415 or any other provision of the Internal Revenue Code.
(B) An active member may establish service credit for any period of paid educational service by making a payment to the system determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated. A member may not establish credit for a period of educational service for which the member also may receive a retirement benefit from another defined benefit retirement plan. A member may not establish service credit for educational service to the extent such service purchase would violate Section 415 or any other provision of the Internal Revenue Code.
(C) An active member may establish up to six years of service credit for any period of military service, if the member was discharged or separated from military service under conditions other than dishonorable, by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated.
(D) An active member on an approved leave of absence from an employer that participates in the system who returns to covered employment within four years may purchase service credit for the period of the approved leave, but may not purchase more than two years of service credit for each separate leave period, by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated.
(E) An active member who has five or more years of earned service credit may establish up to five years of nonqualified service by making a payment to the system to be determined by the board, but not less than thirty-five percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated.
(F) An active member may establish service credit for any period of service in which the member participated in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education, by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the system or in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education. Periods of less than a year must be prorated. A member may not establish credit for a period of service for which the member also may receive a retirement benefit from another defined benefit retirement plan. A member may not establish service credit under this subsection to the extent such service purchase would violate Section 415 or any other provision of the Internal Revenue Code. Service purchased under this subsection is 'earned service' and counts toward the required five or more years of earned service necessary for benefit eligibility. Compensation earned for periods purchased under this subsection while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education shall be treated as earnable compensation and shall be used in calculating a member's average final compensation. A member purchasing service under this subsection who has funds invested in a TIAA Traditional account under a TIAA-CREF Retirement Annuity contract shall be eligible to make a plan to plan transfer in accordance with the terms of that contract.
(G) An active member who previously withdrew contributions from the system may reestablish the service credited to the member at the time of the withdrawal of contributions by repaying the amount of the contributions previously withdrawn, plus regular interest from the date of the withdrawal to the date of repayment to the system.
(H) An active member establishing retirement credit pursuant to this chapter may establish that credit b
As used in this chapter, unless a different meaning is plainly required by the context:
(1) "Accumulated contribution" means the sum of all the amounts deducted from the compensation of a member and credited to the members individual account in the employee annuity savings fund, together with regular interest on the account, as provided in Article 9 of this chapter.
(2) "Active member" means an employee who is compensated by an employer participating in the system and who is making regular retirement contributions to the system.
(3) "Actuarial equivalent" means a benefit of equal value when computed upon the basis of mortality tables adopted by the board and regular interest.
(4) "Average final compensation" with respect to those members retiring on or after July 1, 1986, means the average annual earnable compensation of a member during the twelve consecutive quarters of his creditable service on which regular contributions as a member were made to the system producing the highest such average; a quarter means a period January through March, April through June, July through September, or October through December. An amount up to and including forty-five days' termination pay for unused annual leave at retirement may be added to the average final compensation. Average final compensation for an elected official may be calculated as the average annual earnable compensation for the thirty-six consecutive months before the expiration of the elected official's term of office.
(5) "Beneficiary" means a person in receipt of a pension, an annuity, a retirement allowance or other benefit provided under the system.
(6) "Board" means the State Budget and Control Board which shall act under the provisions of this chapter through its Division of Retirement Systems.
(7) "Creditable service" means a member's earned service, prior service, and purchased service.
(8) "Earnable compensation" means the full rate of the compensation that would be payable to a member if the member worked the member's full normal working time; when compensation includes maintenance, fees, and other things of value the board shall fix the value of that part of the compensation not paid in money directly by the employer.
(9) "Earned service" means:
(a) paid employment as a teacher or employee of an employer participating in the system where the teacher or employee makes regular retirement contributions to the system; or
(b) service rendered while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four Year and Postgraduate Institutions of Higher Education that has been purchased pursuant to Section 9-1-1140(F); or
(c) service earned as a participant in the system, the South Carolina Police Officers Retirement System, the Retirement System for Members of the General Assembly, or the Retirement System for Judges and Solicitors that is transferred to or purchased in the system.
(10) "Educational service" means paid service as a classroom teacher in a public, private, or sectarian school providing elementary or secondary education, kindergarten through grade twelve.
(11) "Employee" means:
(a) to the extent compensated by this State, an employee, agent, or officer of the State or any of its departments, bureaus, and institutions, other than the public schools, whether the employee is elected, appointed, or employed;
(b) the president, dean, professor, or teacher or any other person employed in any college, university, or educational institution of higher learning supported by and under the control of the State;
(c) an employee, agent, or officer of a county, municipality, or school district, or an agency or department of any of these, which has been admitted to the system under the provisions of Section 9-1-470, to the extent the employee, agent, or officer is compensated for services from public funds;
(d) an employee of the extension service and any other employee a part of whose salary or wage is paid by the federal government if the federal funds from which the salary or wage is paid before disbursement become state funds;
(e) an employee of a service organization, the membership of which is composed solely of persons eligible to be teachers or employees as defined by this section, if the compensation received by the employees of the service organization is provided from monies paid by the members as dues or otherwise, or from funds derived from public sources and if the employee contributions prescribed by this title are paid from the funds of the service organization;
(f) an employee of an alcohol and drug abuse planning agency authorized to receive funds pursuant to Section 61-12-20;
(g) an employee of a local council on aging or other governmental agency providing aging services funded by the Office on Aging, Office of the Lieutenant Governor.
"Employee" does not include supreme and circuit court judges, any person whose services are remunerated solely by per diem payments, or any person employed by a school, college, or university at which the person is enrolled as a student or otherwise regularly attending classes for academic credit unless the person is employed as a school bus driver and is paid by the same school district in which the person is enrolled in school. In determining student status, the system may consider the guidelines of the Social Security Administration regarding student services and other criteria the system uniformly prescribes.
(12) "Employee annuity" means annual payments for life derived from the accumulated contributions of a member.
(13) "Employee annuity reserve" means the present value of all payments to be made on account of an employee annuity or benefit in lieu of the employee annuity, computed on the basis of mortality tables adopted by the board and regular interest.
(14) "Employer" means this State, a county board of education, a district board of trustees, the board of trustees or other managing board of a state-supported college or educational institution, or any other agency of this State by which a teacher or employee is paid; the term "employer" also includes a county, municipality, or other political subdivision of the State, or an agency or department of any of these, which has been admitted to the system under the provisions of Section 9-1-470, a service organization referred to in item (11)(e) of this section, an alcohol and drug abuse planning agency authorized to receive funds pursuant to Section 61-12-20, and a local council on aging or other governmental agency providing aging services funded by the Office on Aging, Office of the Lieutenant Governor.
(15) "Employer annuity" means annual payments for life derived from money provided by the employer.
(16)"Employer annuity reserve" means the present value of all payments to be made on account of an employer annuity or benefit in lieu of the employee annuity, computed on the basis of mortality tables adopted by the board and regular interest.
(17) [Reserved]
(18) "Member" means a teacher or employee included in the membership of the system as provided in Article 5 of this chapter.
(19) "Military service" means:
(a) service in the United States Army, United States Navy, United States Marine Corps, United States Air Force, or United States Coast Guard;
(b) service in the select reserve of the Army Reserve, Naval Reserve, Marine Corps Reserve, Air Force Reserve, or the Coast Guard Reserve, and
(c) service as a member of the Army National Guard or Air National Guard of this or any other state.
(20) "Nonqualified service" means purchased service other than public service, educational service, military service, leave of absence, and reestablishment of withdrawals.
(21) "Prior service" means service rendered as a teacher or employee before July 1, 1945, for which credit is allowable under Article 7 of this chapter.
(22) "Public school" means a school conducted within this State under the authority and supervision of a duly elected or appointed school district board of trustees.
(23) "Public service" means service as an employee of the government of the United States, a state or political subdivision of the United States, or an agency or instrumentality of any of these. "Public service" does not include "educational service" or "military service" as defined in this section. "Public service" does include paid service rendered as an employee of a postsecondary public technical college or public junior college, or a public four-year or postgraduate institution of higher education, while the member was a student at that institution.
(24) "Purchased service" means service credit purchased by an active member while an employee of an employer participating in the system.
(25) "Regular interest" means interest compounded annually at a rate determined by the board in accordance with Section 9-1-280.
(26) "Retirement" means the withdrawal from active service with a retirement allowance granted under the system.
(27) "Retirement allowance" means the sum of the employer annuity and the employee annuity or any optional benefit payable in lieu of the annuity.
(28) "Retirement system" or "system" means the South Carolina Retirement System established under Section 9-1-20.
(29) "State" or "this State" means the State of South Carolina;
(30) "Teacher" means a classroom teacher employed in the public schools supported by this State as determined by the board.
SECTION 9-1-20. South Carolina Retirement System created; System shall have powers and privileges of corporation; purposes of System.
A retirement system is hereby established and placed under the management of the State Budget and Control Board for the purpose of providing retirement allowances and other benefits for teachers and employees of the State and political subdivisions or agencies or departments thereof. The System so created shall have the power and privileges of a corporation and shall be known as the South Carolina Retirement System, and by such name all of its business shall be transacted, all of its funds invested and all of its cash, securities and other property held.
SECTION 9-1-30. Property of System exempt from taxation.
All property owned or acquired by the Retirement System for the purposes of this chapter shall be exempt from all taxes imposed by the State or any political subdivision thereof.
SECTION 9-1-40. Penalties for making false statement or record.
Any person who shall knowingly make any false statement or shall falsify or permit to be falsified any record of the System in any attempt to defraud the System as a result of such act shall be guilty of a misdemeanor and, on conviction thereof by any court of competent jurisdiction, shall be punished by a fine not exceeding five hundred dollars or imprisonment in the county jail not exceeding twelve months, or both such fine and imprisonment at the discretion of the court.
SECTION 9-1-50. Reservation of right to revise System to conform to changes in Federal Social Security Act.
The State hereby reserves the right, in case the Federal Social Security Act be so amended that the members or beneficiaries of the System can be included in the old age and survivors insurance plan provided for in said Federal Act, to revise the System upon a fair and equitable basis so that the members or beneficiaries of the System may be included under the provisions of said Federal Act.
SECTION 9-1-60. Implementation of "cafeteria" plan.
(A) The System may develop and implement a program for the administration of a flexible benefits or "cafeteria" plan as defined by Section 125 of the Internal Revenue Code of 1986 for all employees covered by the health and dental insurance plan administered by the System. The plan may not decrease contributions paid to or benefits paid by the System.
The South Carolina Department of Highways and Public Transportation is herewith authorized to continue its independent cafeteria or flexible benefits pilot plan and to modify and implement the plan to accomplish maximum available benefits under Internal Revenue Section 125, until such time as the Comptroller General can convert Department of Transportation employees into the state cafeteria plan.
(B) Political subdivisions may develop and implement a program for the administration of a flexible benefits or "cafeteria" plan as defined by Section 125 of the Internal Revenue Code of 1986, as amended, for their employees. The plan may not decrease contributions paid to or benefits paid by the system. For political subdivisions that also participate in the plan adopted pursuant to subsection (A) of this section, any separate cafeteria plan adopted pursuant to this subsection may provide benefits in addition to, but shall not include, the specific types of benefits provided to employees under the plan adopted pursuant to subsection (A) of this section.
(C) An employer or coalition of employers working in concert may develop and implement a program for the administration of a flexible benefits or "cafeteria" plan as defined by Section 125 of the Internal Revenue Code of 1986, as amended, for their employees. The plan may not decrease contributions paid to or benefits paid by the system. For employers or coalition of employers working in concert, that also participate in the plan adopted pursuant to subsection (A) of this section, any separate cafeteria plan adopted pursuant to this subsection may provide benefits in addition to, but shall not include, the specific types of benefits provided to employees under the plan adopted pursuant to subsection (A) of this section.
SECTION 9-1-70. Repealed by 1990 Act No. 458, Section 2, eff May 3, 1990.
SECTION 9-1-80. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-100. Payments to beneficiaries may include payments to persons, trustees, and estates.
Payments made to beneficiaries pursuant to the provisions of this chapter may include payments to a person or persons, trustees, and estates.
ARTICLE 3.
ADMINISTRATION
SECTION 9-1-210. State Budget and Control Board shall administer System.
The general administration and responsibility for the proper operation of the System and for making effective the provisions hereof are hereby vested in the State Budget and Control Board.
SECTION 9-1-220. Repealed by 2005 Act No. 153, Pt. III Section 5, eff July 1, 2005.
SECTION 9-1-230. Authority to engage actuarial and other services.
The Board shall engage such actuarial and other services as shall be required to transact the business of the System.
SECTION 9-1-240. Appointment and duties of actuary.
The Board shall designate an actuary who shall be the technical adviser of the Board on matters regarding the operation of the System and shall perform such other duties as are required in connection therewith.
SECTION 9-1-250. Investigation and valuation by actuary every five years.
At least once in each five-year period, the first of which began in 1947, the actuary shall make an actuarial investigation into the mortality, service and compensation experience of the members and beneficiaries of the System and shall make a valuation of the contingent assets and liabilities of the System and the Board, after taking into account the results of such investigations and valuations, shall adopt for the System such mortality, service and other tables as shall be deemed necessary.
SECTION 9-1-260. Annual valuation by actuary.
On the basis of regular interest and tables last adopted by the Board the actuary shall make an annual valuation of the contingent assets and liabilities of the System.
SECTION 9-1-270. Board shall keep actuarial data in convenient form.
The Board shall keep in convenient form such data as shall be necessary for actuarial valuation of the contingent assets and liabilities of the System and for checking the experience of the System.
SECTION 9-1-280. Board shall determine interest rate; base rate established.
The Board shall determine from time to time the rate of regular interest for use in all calculations, with the rate of four per cent per annum applicable unless heretofore or hereafter changed by the Board.
SECTION 9-1-290. Rules and regulations.
Subject to the limitations hereof, the Board shall, from time to time, establish rules and regulations for the administration of the System and for the transaction of business. The Board shall also, from time to time, in its discretion, adopt rules and regulations to prevent injustices and inequalities which might otherwise arise in the administration of the System.
SECTION 9-1-300. Records and reports.
The Board shall keep a record of all its proceedings under this chapter, which shall be open to public inspection. It shall publish annually a report showing the fiscal transactions of the System for the preceding year, the amount of the accumulated cash and securities of the System and the last balance sheet showing the financial condition of the System by means of an actuarial valuation of the contingent assets and liabilities of the System.
SECTION 9-1-310. Administrative costs of retirement systems funded from interest earnings; allocation of costs.
The administrative cost of the South Carolina Retirement System, the South Carolina Police Officers Retirement System, the Retirement System for Members of the General Assembly of the State of South Carolina, the Retirement System for Judges and Solicitors of the State of South Carolina, and the National Guard Retirement System must be funded from the interest earnings of the above systems. The allocation of the administrative costs of the systems must be made by the State Budget and Control Board and must be based upon a proration of the cost in proportion to the assets that each system bears to the total assets of all of the systems for the most recently completed fiscal year.
SECTION 9-1-320. Confidentiality of member records.
All records of all active, retired, and inactive members maintained by the South Carolina Retirement Systems are classified as confidential records. These records are exempt from the disclosure requirements of Chapter 4 of Title 30, and shall not be disclosed to third parties, except where authorized by the member or where requested by state and federal authorities, and then only at the sole discretion of the director of the South Carolina Retirement Systems.
ARTICLE 5.
MEMBERSHIP IN SYSTEM
SECTION 9-1-410. Membership generally.
The membership of the System shall be composed as provided in this article.
SECTION 9-1-420. Certain persons employed after December 31, 1948, are automatically members of System.
All persons who have or shall become teachers or employees after December 31, 1948, except those specifically excluded under Section 9-1-450 or those as to whom membership is optional under Sections 9-1-510 to 9-1-560, have become or shall become members of the System as a condition of their employment.
SECTION 9-1-425. Contributing member of system.
Notwithstanding any other provision of law, a contributing member of the System shall remain a contributing member while under employment to an employer covered by the System.
SECTION 9-1-430. Special provision for certain persons employed between April 26, 1945 and December 31, 1966.
All persons who were teachers or State, county or municipal employees on April 26, 1945, or who became such after this date but on or before December 31, 1966, except those specifically excluded under Section 9-1-450 and the persons permitted to exercise the option under Sections 9-1-510 to 9-1-560, became members as of July 1, 1945, or as of the date of last employment, if later, unless on or before December 31, 1948, they filed with the Board on a form prescribed by the Board a notice of their election not to be covered in the membership of the System and a duly executed waiver of all present and prospective benefits which would otherwise inure to them on account of their participation in the System.
SECTION 9-1-440. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-450. Members of other agency or departmental retirement plans.
Notwithstanding any provisions to the contrary, any teacher or employee who was a member of any other retirement plan or fund in operation on April 26, 1945 under sponsorship of any governmental agency or department shall not be entitled to membership in the System unless on or before July 1, 1946 any such teacher or employee indicated by a notice filed with the Board on a form prescribed by the Board his individual election and choice to participate in the System. If a majority of the members of any such retirement plan or fund so voted all members of that retirement plan or fund became eligible to participate in the System and became members of the System unless within thirty days next succeeding a date named by the Board they elected not to become members.
SECTION 9-1-460. Discontinuance of certain local plans or funds.
If the majority of the members of a retirement or pension plan or fund voted to enter the System in the manner described in Section 9-1-450, the local plan or fund was discontinued and the payment of all pensions to members on the pension roll as of the date of discontinuance became and is an obligation of the city, county or other unit in which the plan or fund was operated and shall be continued and paid by such city, county or other unit.
SECTION 9-1-470. Political subdivisions may apply for admission to System as employers.
A county, municipality, or other political subdivision of the State, an agency or department of them, including a school board, a service organization as defined in Section 9-1-10(11)(e), and any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, in its discretion, may become an employer by applying to the board for admission to the system and by complying with the requirements and the regulations of the board.
SECTION 9-1-480. Employees of political subdivisions as members.
All persons, except those specifically excluded in Sections 9-1-450 and 9-1-490 and the persons permitted to exercise the option under Sections 9-1-510 to 9-1-560, who are employed by any county, municipality, or other political subdivision or agency or department of them, any eligible service organization, or any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, after the admission of the county, municipality, or other subdivision, agency, or department of them, service organization, or any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, into the System under the provisions of this section, shall become members of the System as a condition of their employment. All persons, except those specifically excluded in Section 9-1-450 and persons permitted to exercise the option under Sections 9-1-510 to 9-1-560, who are employed by any county, municipality, or other political subdivision or agency or department of them, by any eligible service organization, or any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, at the date of the admission of the county, municipality, or other subdivision or agency or department, or eligible service organization, or any nonprofit corporation created under the provisions of Chapter 35, Title 33, for the purpose of supplying water and sewer, into the System under the provisions of this section become members on the date of the admission, unless within a period of six months next following the admission they have filed with the Board on a form prescribed by the Board a notice of their election not to be covered in the membership and a duly executed waiver of all present and prospective benefits which would otherwise inure to them on account of their participation in the System.
SECTION 9-1-490. Firemen and peace officers.
A person employed by the State or by any county, municipality or other political subdivision in the capacity of a fireman or a peace officer shall not be required to participate in the Retirement System if such person is or becomes a member of any fireman's pension fund or plan which may be established or created pursuant to law or the police insurance and annuity fund.
SECTION 9-1-500. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-510. Option of employees and teachers receiving $100 or less a month; legislators, and certain elected officials.
All employees and teachers having a monthly compensation from public funds of one hundred dollars or less and members of the General Assembly may exercise the option within thirty days after entering upon the discharge of such duties not to become a member of the System. Elected officials who are not fulltime employees and who earn nine thousand dollars annually, or less, may exercise an option not to become members of the system.
SECTION 9-1-520. Certain members of General Assembly may elect to remain members of System; contributions.
Members of the General Assembly who have been members of the South Carolina Retirement System for at least ten years may elect to remain a member of the System within one year following termination of service in the General Assembly and shall make yearly contributions to the System in an amount equivalent to contributions payable by active members of the General Assembly.
SECTION 9-1-530. Certain former legislators may elect to remain members following termination of service; contributions; members must establish service and qualify for allowance on or before December 31, 1965.
Members of the General Assembly who have been members of the South Carolina Retirement System and a member of the General Assembly for at least eight years may elect to remain a member of the System within one year following termination of service in the General Assembly and shall make yearly contributions to the System in an amount equivalent to contributions payable by active members of the General Assembly. Such members may establish such service and qualify for a retirement allowance from the Retirement System provided they do so on or before December 31, 1965.
SECTION 9-1-540. Certain constitutional officers and members of General Assembly may elect, prior to December 31, 1965, to return to System.
Any constitutional officer who has been a member of the South Carolina Retirement System and who has at least ten years of creditable service either as a constitutional officer or as a member of the General Assembly, or a combination of both under the System and who has separated prior to May 28, 1965 may elect to come under the provisions hereof; provided, he makes such election on or before December 31, 1965, and has not withdrawn his contributions from the System. Such constitutional officer shall make yearly contributions to the System in an amount equivalent to contributions payable by active members of the General Assembly.
SECTION 9-1-550. Option of certain public school employees.
Any teacher or employee employed in connection with the public school pupil transportation system or in connection with any program or activity defined by the Board as being of a nonpermanent nature may exercise an option not to become a member of the System, if such option is exercised within thirty days after entering upon the discharge of his duties in such employment.
SECTION 9-1-560. Option of day laborers.
Day laborers may exercise an option not to become members of the System, provided they file notice thereof within thirty days after beginning work as such day laborers.
SECTION 9-1-570. Option of State employees required to become members of Federal Railroad Retirement System.
Any person who becomes an employee of the State and, because of the nature of his employment, is required to become a member of the Federal Railroad Retirement System, may elect to become, or not to become, a member of the South Carolina Retirement System, provided that such option is exercised within thirty days after he enters upon the discharge of the duties of such position.
SECTION 9-1-580. Option of certain hospital employees.
(A) Any persons employed by a hospital, which is an employer under the system by application, in the capacity of a physician, nursing service personnel, technicians, housekeeping personnel, dietary personnel, and laundry personnel may elect not to become members of the South Carolina Retirement System, if this option is exercised within thirty days after they enter upon the discharge of their duties. The option provided for in this section is irrevocable.
(B) If for any reason, a determination is made that a person who exercised the option provided for in subsection (A) is entitled to any benefit provided pursuant to this title, the cost to establish service credit must be calculated pursuant to Section 9-1-1140(A). This calculation must be based on the person's current salary or career highest fiscal year salary for any period of time the person was employed in a position that otherwise would have been covered by membership in the system, regardless of whether the person requests to purchase all of the eligible service credit. The calculated cost must be paid solely by the person's employer, the person, or any combination of these.
(C) For purposes of this section, "physician" means a person who is licensed to practice medicine or osteopathy in this State in accordance with Chapter 47, Title 40.
SECTION 9-1-610. Determination of who is teacher or employee.
In all cases of doubt, the Board shall determine whether any person is a teacher or employee for the purposes of the System.
SECTION 9-1-620. Effect on members, beneficiaries, their widows or other dependents, of other statutes.
Subject to the provisions of Chapter 5 of this Title, no other provisions of law in any other statute which provides wholly or partly at the expense of the State for annuities, pensions or retirement benefits for teachers or employees of the State, their widows or other dependents, shall apply to members or beneficiaries of the System, their widows or other dependents.
SECTION 9-1-630. Certain persons may withdraw from System.
The Director of the South Carolina Retirement System is authorized to permit any member of the System who has joined through error or misunderstanding to withdraw from the System.
SECTION 9-1-640. Employers and members divided into two classes; change from Class One to Class Two.
Notwithstanding any other provisions of law governing the System, effective July 1, 1964, there shall be two classes of participating employers and two classes of members. Class One employers shall include all employers who irrevocably elect, by written notification to the Board not later than December 31, 1964, to remain, and to have members in their employ remain, under the provisions of the System as in effect on June 30, 1964. Class Two employers shall include all employers who irrevocably elect, by written notification to the Board not later than December 31, 1964, to participate, and to have members in their employ participate, under the provisions of the System as amended effective July 1, 1964. Any such notification shall become effective for all purposes as of July 1, 1964. Failure by any employer to file such notification shall be deemed an irrevocable election by the employer to be a Class One employer. In any event, the State shall be a Class Two employer. Members in the employ of a Class One employer shall be Class One members, and members in the employ of a Class Two employer shall be Class Two members. Any employer becoming such on or after July 1, 1964 shall be a Class Two employer. In the event that a member shall transfer, without break in membership, from one class to another, the Board shall determine his benefit upon retirement in an equitable manner by uniform rules consistent herewith.
Notwithstanding the foregoing, any Class One employer may elect to become a Class Two employer and have employees in its employ participate under the provisions of the System as amended effective July 1, 1964; provided, that such employer and each and every such member shall make such additional contributions to the System, plus regular interest, as would have been required had such employer become a Class Two employer as of July 1, 1964.
Effective July 1, 1976, or any subsequent July first, a Class One employer may elect Class Two coverage on July 1, 1976, or as of July first of any year thereafter. It is mandatory for each Class One employee of any such employer to participate in Class Two coverage from the effective date of the employer election. Upon service retirement, a member shall receive a service retirement allowance equal to the sum of his benefit computed by the Class One formula for service credited under Class One membership and his benefit computed by the Class Two formula for service credited under Class Two membership. A Class One member may convert Class One service to Class Two by paying into the System two and one-half percent of his earnable compensation, or the average of the highest twelve consecutive quarters, whichever is greater, for each year prorated for periods of less than one year. A member who elects to convert from Class One to Class Two must convert all such service for which eligible.
SECTION 9-1-650. Continuation of membership in correlated systems.
As used in this section, "correlated system" shall mean one or more of the following:
(1) South Carolina Retirement System;
(2) South Carolina Police Officers' Retirement System;
(3) Retirement System for members of the General Assembly of the State of South Carolina.
If a member of any correlated system ceases to occupy a position covered under the System and if, within the protective period and under such conditions as are set forth in the correlated system for continuation of membership therein, he accepts a position covered by another correlated system, he shall notify the Director of each System of the employment, and his membership in the first System must be continued so long as his membership in the other System continues. Service credited to the member under the provisions of the first System must be considered service credits for the purpose of determining eligibility for benefits, but not the amount thereof, under the other System. Any benefit under any one of the correlated systems must be computed solely on the basis of service and contributions credited under that System, and must be payable at such times and subject to such age and service conditions as are set forth therein, except the average final salary under either the South Carolina Retirement System or the Police Officers Retirement System may be used for the benefit calculation under both systems for consecutive earned service credit. A member shall not be eligible to receive retirement payments so long as he is employed in a position covered by the South Carolina Retirement System or the South Carolina Police Officers Retirement System.
SECTION 9-1-660. Firemen eligible for Police Officers Retirement System; benefits.
Any county, municipality or other political subdivision of the State and any agency or department thereof which has firemen it employs covered under the South Carolina Retirement System may become an employer and have such firemen covered under the South Carolina Police Officers Retirement System by applying for admission to the System on July 1, 1976, or any subsequent July first. A majority of the persons then employed as firemen by the prospective employer must elect irrevocably to become members of the South Carolina Police Officers Retirement System as of the requested date of admission.
Any fireman who is a member of the South Carolina Retirement System and who becomes a member of the South Carolina Police Officers Retirement System as provided in this section shall be continued as a member under the provisions of the South Carolina Retirement System so long as his membership in the South Carolina Police Officers Retirement System continues. Service credited to the member under the provisions of the South Carolina Police Officers Retirement System shall be considered for the purpose of determining eligibility for benefits but not the amount thereof under the South Carolina Retirement System. Any benefit under either one of these two correlated systems shall be computed solely on the basis of service and contributions credited under that System, but in determining the member's average final compensation, his compensation received during credited service under both Systems shall be taken into account. Such benefits shall be payable at such times and subject to such age and service conditions as provided under the respective Systems; provided, however, a member shall not be eligible to receive retirement payments so long as he is employed in a position covered by the South Carolina Retirement System or the South Carolina Police Officers Retirement System. Notwithstanding the above, the disability retirement benefit shall only be paid from and based on the benefit provisions of the System to which the member is contributing at the time of disability and shall be based on the total of his credited service under both Systems. The amount of accumulated contributions of such disabled member which is credited to his account under the System to which he is not contributing at the time of disability, shall be transferred to the System from which his disability retirement benefit shall be paid.
For the purposes of this section, "fireman" shall mean any person who receives his salary from an employer and who is required by the terms of his employment, either by election or appointment, to give his time to prevention and control of property destruction by fire. No fireman shall be eligible under this section unless his employer certifies to the System that his service as a fireman will require at least one thousand, six hundred hours per year of active duty and that his salary for such service will be at least two thousand dollars per year.
SECTION 9-1-670. Members eligible for membership in South Carolina State Employees Credit Union.
Notwithstanding any other provision of law, any person who is eligible to participate in the South Carolina Retirement System shall also be eligible for membership in the South Carolina State Employees Credit Union.
ARTICLE 7.
CREDITABLE SERVICE
SECTION 9-1-810. Claims for prior service.
Under rules and regulations adopted by the Board, each member who was a teacher or employee at any time prior to July 1, 1945, and who became a member on or before December 31, 1966, was required to file a detailed statement of all service as a teacher or employee rendered by him prior to July 1, 1945, for which he claimed credit.
SECTION 9-1-820. Verification of service claimed; determination of compensation paid during period of prior service.
Subject to the restrictions herein contained and to such other rules and regulations as the Board may adopt, the Board verified or, if such verifications have not been completed, shall verify, as soon as practicable after the filing of such statements under Section 9-1-810, the service therein claimed. In lieu of a determination of the actual compensation of a member that was received during such period of prior service the Board may use for the purpose of the System the compensation rates which, if they had progressed with the rates of salary increase shown in the tables as prescribed in 9-1-250, would have resulted in the same average earnable compensation of the member for five years immediately preceding July 1, 1945 as the records show the member actually received.
SECTION 9-1-830. Prior service certificates.
Upon verification of such statements of service, the Board issued or shall issue prior service certificates certifying to each member the period of service prior to July 1, 1945 with which the member was credited on the basis of his statement of service. So long as membership continues a prior service certificate shall be final and conclusive for retirement purposes as to such service. When membership ceases, such prior service certificate shall become void. Should the teacher or employee again become a member such teacher or employee shall enter the System as a teacher or employee not entitled to prior service credit except as provided in Section 9-1-1590.
SECTION 9-1-840. What constitutes one year of service.
The Board shall fix and determine by appropriate rules and regulations how much service in any year is equivalent to one year of service, but in no case shall more than one year of service be creditable for all services in one year. Service rendered for the regular school year in any district shall be equivalent to one year's service.
SECTIONS 9-1-850, 9-1-860. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTIONS 9-1-850, 9-1-860. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
ARTICLE 9.
THREE FUNDS AND COLLECTIONS FOR FUNDS
SECTION 9-1-1010. Assets to be credited to employee annuity savings fund and employer annuity accumulation fund.
All of the assets of the System are credited, according to the purpose for which they are held, to two bookkeeping accounts, hereinafter referred to as "funds". The accounts are referred to as the employee annuity savings fund and the employer annuity accumulation fund.
SECTION 9-1-1020. Employee annuity savings fund; deductions from compensation of members of System; employer to pay required member contributions on earnings after July 1, 1982; tax treatment; funding; retirement treatment.
The employee annuity savings fund shall be the account in which shall be recorded the contributions deducted from the earnable compensation of members to provide for their employee annuities. Each employer shall cause to be deducted from the compensation of each member on each and every payroll of such employer for each and every payroll period four percent of his earnable compensation. With respect to each member who is eligible for coverage under the Social Security Act in accordance with the agreement entered into during 1955 in accordance with the provisions of Chapter 7 of this Title; however, such deduction shall, commencing with the first day of the period of service with respect to which such agreement is effective, be at the rate of three percent of the part of his earnable compensation not in excess of four thousand eight hundred dollars, plus five percent of the part of his earnable compensation in excess of four thousand eight hundred dollars. In the case of any member so eligible and receiving compensation from two or more employers, such deductions may be adjusted under such rules as the Board may establish so as to be as nearly equivalent as practicable to the deductions which would have been made had the member received all of such compensation from one employer. In determining the amount earnable by a member in a payroll period, the Board may consider the rate of annual earnable compensation of such member on the first day of the payroll period as continuing throughout such payroll period and it may omit deduction from earnable compensation for any period less than a full payroll period if a teacher or employee was not a member on the first day of the payroll period.
Each employer shall certify to the Board on each and every payroll or in such other manner as the Board may prescribe the amounts to be deducted and such amounts shall be deducted and, when deducted, shall be credited to said employee annuity savings fund, to the individual accounts of the members from whose compensation the deductions were made.
The rates of the deductions, without regard to a member's coverage under the Social Security Act, must be the percentage of earnable compensation as provided in the following schedule:
Class One Class Two
Before July 1, 2005 5 6
July 1, 2005 through
June 30, 2006 5.25 6.25
After June 30, 2006 5.50 6.50"
Each department and political subdivision shall pick up the employee contributions required by this section for all compensation paid on or after July 1, 1982, and the contributions so picked up shall be treated as employer contributions in determining federal tax treatment under the United States Internal Revenue Code. For this purpose, each department and political subdivision is deemed to have taken formal action on or before January 1, 2009, to provide that the contributions on behalf of its employees, although designated as employer contributions, shall be paid by the employer in lieu of employee contributions. The department and political subdivision shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The department and political subdivision may pick up these contributions by a reduction in the cash salary of the employee.
The employee, however, must not be given the option of choosing to receive the contributed amount of the pick ups directly instead of having them paid by the employer to the retirement system. Employee contributions picked up shall be treated for all purposes of this section in the same manner and to the extent as employee contributions made prior to the date picked up.
Payments for unused sick leave, single special payments at retirement, bonus and incentive-type payments, or any other payments not considered a part of the regular salary base are not compensation for which contributions are deductible. Contributions are deductible on up to and including forty-five days' termination pay for unused annual leave. If a member has received termination pay for unused annual leave on more than one occasion, contributions are deductible on up to and including forty-five days' termination pay for unused annual leave for each termination payment for unused annual leave received by the member. However, only an amount up to and including forty-five days' pay for unused annual leave from the member's last termination payment shall be included in a member's average final compensation calculation.
SECTION 9-1-1030. Deductions must be made although compensation is thereby reduced below legal minimum; consent to deductions.
The deductions provided for in Section 9-1-1020 shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deduction made and provided for in said section and shall receipt for his full compensation, and payment of such compensation less such deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by such person during the period covered by such payments, except as to the benefits provided hereunder.
SECTION 9-1-1040. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-1050. Employer annuity accumulation fund; contributions shall be paid by employers.
The employer annuity accumulation fund shall be the account:
(1) In which shall be recorded the reserves on all employee annuities in force and against which shall be charged all employee annuities and all benefits in lieu of employee annuities;
(2) In which must be recorded all reserves for the payment of all employer annuities and other benefits payable from contributions made by employers and against which is charged all employer annuities and other benefits on account of members with prior service credit; and
(3) In which shall be recorded the reserves on all employer annuities granted to members not entitled to prior service credit and against which such employer annuities and benefits in lieu thereof shall be charged.
There shall be paid to the System and credited to the employer annuity accumulation fund contributions by the employers in an amount equal to a certain percentage of the earnable compensation of each member employed by each employer to be known as the "normal contribution" and an additional amount equal to a percentage of such earnable compensation to be known as the "accrued liability contribution." The rate per cent of such contributions shall be fixed on the basis of the liabilities of the system as shown by actuarial valuation.
SECTION 9-1-1060. Normal contribution rate.
On the basis of regular interest and of such mortality and other tables as shall be adopted by the Board, the actuary engaged by the Board to make each annual valuation during the period over which the accrued liability contribution is payable, immediately after making such valuation, shall determine the uniform and constant percentage of the earnable compensation of the average new entrant throughout his entire period of active service which would be sufficient to provide for the payment of any employer annuity payable on his account. The rate per cent so determined shall be known as the "normal contribution rate." After the accrued liability contribution has ceased to be payable, the normal contribution rate shall be the rate per cent of the earnable compensation of all members obtained by deducting from the total liabilities of the employer annuity accumulation fund the amount of the funds in hand to the credit of that account and dividing the remainder by one per cent of the present value of the prospective future earnable compensation of all members as computed on the basis of the mortality and service tables adopted by the Board and regular interest. The normal rate of contribution shall be determined by the actuary after each valuation.
The rate per cent determined immediately after the first valuation by the actuary engaged by the Board as the rate per cent of the total annual earnable compensation of all members which is equivalent to four per cent of the amount of the total employer annuity liability on account of all members and beneficiaries which is not dischargeable by the aforesaid normal contribution made on account of such members during the remainder of their active service shall be known as the "accrued liability contribution rate." Such rate shall be increased on the basis of subsequent valuations if benefits are increased over those included in the valuation on the basis of which the original accrued liability contribution rate was determined. Upon certification by the actuary engaged by the Board that the accrued liability contribution rate may be reduced without impairing the System, the Board may cause the accrued liability contribution rate to be reduced.
SECTION 9-1-1080. Minimum contributions to employer annuity accumulation fund.
The total amount payable in each year by each employer for credit to the employer annuity accumulation fund shall not be less than the sum of the rate per cent known as the normal contribution rate and the accrued liability contribution rate of the total earnable compensation of all members during the preceding year. Subject to the provisions of Section 9-1-1070, the amount of each annual accrued liability contribution shall be at least three per cent greater than the preceding annual accrued liability payment, and the aggregate payment by employers shall be sufficient, when combined with the amount in the fund, to provide the employer annuities and other benefits payable out of the fund during the year then current.
SECTION 9-1-1090. Discontinuance of accrued liability contribution.
The accrued liability contribution shall be discontinued as soon as the accumulated reserve in the employer annuity accumulation fund shall equal the present value, as actuarially computed and approved by the Board, of the total liability of such fund less the present value, computed on the basis of the normal contribution rate then in force, of the prospective normal contributions to be received on account of all persons who are at the time members.
SECTION 9-1-1100. Employer annuities and benefits to be paid from employer annuity accumulation fund.
All employer annuities, and benefits in lieu thereof, must be paid from the employer annuity accumulation fund.
SECTION 9-1-1110. Obligations of employer annuity accumulation fund.
The maintenance of employee annuity reserves and employer annuity reserves as provided for hereunder and regular interest creditable to the various funds as provided in this article and the payment of all annuities, retirement allowances, refunds, and other benefits granted hereunder, are made obligations of the employer annuity accumulation fund. All income, interest, and dividends derived from deposits and investments authorized hereunder must be used for payment of the obligations of the fund.
SECTION 9-1-1120. Transfer between funds on return of retired employee to active service.
Should any beneficiary be restored to active service and again become a member under the provisions of Section 9-1-1590, his employee annuity reserve shall be transferred from the employer annuity accumulation fund to the employee annuity savings fund and credited to his individual account therein.
SECTION 9-1-1130. Earnings to be credited to employer annuity accumulation fund.
All interest and dividends earned on the invested assets of the System must be credited to the employer annuity accumulation fund. The Board shall credit regular interest to the individual accounts of members in the employee annuity savings fund and shall transfer the amounts of the credits from the employer annuity accumulation fund. Any interest credited to the individual account of a member in the employee annuity savings fund and not payable to him under the provisions of Section 9-1-1650 upon his ceasing to be a teacher or employee except by death or retirement must be transferred from the fund to the employer annuity accumulation fund.
SECTION 9-1-1135. Interest on member accounts.
Interest shall be credited to the account of each member once each year as of June thirtieth, on the basis of the balance in the account of each member as of the previous June thirtieth. Upon the death, retirement, or termination of a member, interest shall be figured to the end of the month immediately preceding the date of refund or retirement, interest being based on the balance in such member's account as of the June thirtieth immediately preceding the date of refund or retirement.
SECTION 9-1-1140. Establishing service credits by making payments into system; career highest fiscal year salary; credits during absences; employer payments; rules and regulations; credits for unused sick leave.
(A) An active member may establish service credit for any period of paid public service by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated. A member may not establish credit for a period of public service for which the member also may receive a retirement benefit from another defined benefit retirement plan. A member may not establish service credit for public service to the extent such service purchase would violate Section 415 or any other provision of the Internal Revenue Code.
(B) An active member may establish service credit for any period of paid educational service by making a payment to the system determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated. A member may not establish credit for a period of educational service for which the member also may receive a retirement benefit from another defined benefit retirement plan. A member may not establish service credit for educational service to the extent such service purchase would violate Section 415 or any other provision of the Internal Revenue Code.
(C) An active member may establish up to six years of service credit for any period of military service, if the member was discharged or separated from military service under conditions other than dishonorable, by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated.
(D) An active member on an approved leave of absence from an employer that participates in the system who returns to covered employment within four years may purchase service credit for the period of the approved leave, but may not purchase more than two years of service credit for each separate leave period, by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated.
(E) An active member who has five or more years of earned service credit may establish up to five years of nonqualified service by making a payment to the system to be determined by the board, but not less than thirty-five percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated.
(F) An active member may establish service credit for any period of service in which the member participated in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education, by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the system or in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education. Periods of less than a year must be prorated. A member may not establish credit for a period of service for which the member also may receive a retirement benefit from another defined benefit retirement plan. A member may not establish service credit under this subsection to the extent such service purchase would violate Section 415 or any other provision of the Internal Revenue Code. Service purchased under this subsection is 'earned service' and counts toward the required five or more years of earned service necessary for benefit eligibility. Compensation earned for periods purchased under this subsection while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education shall be treated as earnable compensation and shall be used in calculating a member's average final compensation. A member purchasing service under this subsection who has funds invested in a TIAA Traditional account under a TIAA-CREF Retirement Annuity contract shall be eligible to make a plan to plan transfer in accordance with the terms of that contract.
(G) An active member who previously withdrew contributions from the system may reestablish the service credited to the member at the time of the withdrawal of contributions by repaying the amount of the contributions previously withdrawn, plus regular interest from the date of the withdrawal to the date of repayment to the system.
(H) An active member establishing retirement credit pursuant to this chapter may establish that credit b
As used in this chapter, unless a different meaning is plainly required by the context:
(1) "Accumulated contribution" means the sum of all the amounts deducted from the compensation of a member and credited to the members individual account in the employee annuity savings fund, together with regular interest on the account, as provided in Article 9 of this chapter.
(2) "Active member" means an employee who is compensated by an employer participating in the system and who is making regular retirement contributions to the system.
(3) "Actuarial equivalent" means a benefit of equal value when computed upon the basis of mortality tables adopted by the board and regular interest.
(4) "Average final compensation" with respect to those members retiring on or after July 1, 1986, means the average annual earnable compensation of a member during the twelve consecutive quarters of his creditable service on which regular contributions as a member were made to the system producing the highest such average; a quarter means a period January through March, April through June, July through September, or October through December. An amount up to and including forty-five days' termination pay for unused annual leave at retirement may be added to the average final compensation. Average final compensation for an elected official may be calculated as the average annual earnable compensation for the thirty-six consecutive months before the expiration of the elected official's term of office.
(5) "Beneficiary" means a person in receipt of a pension, an annuity, a retirement allowance or other benefit provided under the system.
(6) "Board" means the State Budget and Control Board which shall act under the provisions of this chapter through its Division of Retirement Systems.
(7) "Creditable service" means a member's earned service, prior service, and purchased service.
(8) "Earnable compensation" means the full rate of the compensation that would be payable to a member if the member worked the member's full normal working time; when compensation includes maintenance, fees, and other things of value the board shall fix the value of that part of the compensation not paid in money directly by the employer.
(9) "Earned service" means:
(a) paid employment as a teacher or employee of an employer participating in the system where the teacher or employee makes regular retirement contributions to the system; or
(b) service rendered while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four Year and Postgraduate Institutions of Higher Education that has been purchased pursuant to Section 9-1-1140(F); or
(c) service earned as a participant in the system, the South Carolina Police Officers Retirement System, the Retirement System for Members of the General Assembly, or the Retirement System for Judges and Solicitors that is transferred to or purchased in the system.
(10) "Educational service" means paid service as a classroom teacher in a public, private, or sectarian school providing elementary or secondary education, kindergarten through grade twelve.
(11) "Employee" means:
(a) to the extent compensated by this State, an employee, agent, or officer of the State or any of its departments, bureaus, and institutions, other than the public schools, whether the employee is elected, appointed, or employed;
(b) the president, dean, professor, or teacher or any other person employed in any college, university, or educational institution of higher learning supported by and under the control of the State;
(c) an employee, agent, or officer of a county, municipality, or school district, or an agency or department of any of these, which has been admitted to the system under the provisions of Section 9-1-470, to the extent the employee, agent, or officer is compensated for services from public funds;
(d) an employee of the extension service and any other employee a part of whose salary or wage is paid by the federal government if the federal funds from which the salary or wage is paid before disbursement become state funds;
(e) an employee of a service organization, the membership of which is composed solely of persons eligible to be teachers or employees as defined by this section, if the compensation received by the employees of the service organization is provided from monies paid by the members as dues or otherwise, or from funds derived from public sources and if the employee contributions prescribed by this title are paid from the funds of the service organization;
(f) an employee of an alcohol and drug abuse planning agency authorized to receive funds pursuant to Section 61-12-20;
(g) an employee of a local council on aging or other governmental agency providing aging services funded by the Office on Aging, Office of the Lieutenant Governor.
"Employee" does not include supreme and circuit court judges, any person whose services are remunerated solely by per diem payments, or any person employed by a school, college, or university at which the person is enrolled as a student or otherwise regularly attending classes for academic credit unless the person is employed as a school bus driver and is paid by the same school district in which the person is enrolled in school. In determining student status, the system may consider the guidelines of the Social Security Administration regarding student services and other criteria the system uniformly prescribes.
(12) "Employee annuity" means annual payments for life derived from the accumulated contributions of a member.
(13) "Employee annuity reserve" means the present value of all payments to be made on account of an employee annuity or benefit in lieu of the employee annuity, computed on the basis of mortality tables adopted by the board and regular interest.
(14) "Employer" means this State, a county board of education, a district board of trustees, the board of trustees or other managing board of a state-supported college or educational institution, or any other agency of this State by which a teacher or employee is paid; the term "employer" also includes a county, municipality, or other political subdivision of the State, or an agency or department of any of these, which has been admitted to the system under the provisions of Section 9-1-470, a service organization referred to in item (11)(e) of this section, an alcohol and drug abuse planning agency authorized to receive funds pursuant to Section 61-12-20, and a local council on aging or other governmental agency providing aging services funded by the Office on Aging, Office of the Lieutenant Governor.
(15) "Employer annuity" means annual payments for life derived from money provided by the employer.
(16)"Employer annuity reserve" means the present value of all payments to be made on account of an employer annuity or benefit in lieu of the employee annuity, computed on the basis of mortality tables adopted by the board and regular interest.
(17) [Reserved]
(18) "Member" means a teacher or employee included in the membership of the system as provided in Article 5 of this chapter.
(19) "Military service" means:
(a) service in the United States Army, United States Navy, United States Marine Corps, United States Air Force, or United States Coast Guard;
(b) service in the select reserve of the Army Reserve, Naval Reserve, Marine Corps Reserve, Air Force Reserve, or the Coast Guard Reserve, and
(c) service as a member of the Army National Guard or Air National Guard of this or any other state.
(20) "Nonqualified service" means purchased service other than public service, educational service, military service, leave of absence, and reestablishment of withdrawals.
(21) "Prior service" means service rendered as a teacher or employee before July 1, 1945, for which credit is allowable under Article 7 of this chapter.
(22) "Public school" means a school conducted within this State under the authority and supervision of a duly elected or appointed school district board of trustees.
(23) "Public service" means service as an employee of the government of the United States, a state or political subdivision of the United States, or an agency or instrumentality of any of these. "Public service" does not include "educational service" or "military service" as defined in this section. "Public service" does include paid service rendered as an employee of a postsecondary public technical college or public junior college, or a public four-year or postgraduate institution of higher education, while the member was a student at that institution.
(24) "Purchased service" means service credit purchased by an active member while an employee of an employer participating in the system.
(25) "Regular interest" means interest compounded annually at a rate determined by the board in accordance with Section 9-1-280.
(26) "Retirement" means the withdrawal from active service with a retirement allowance granted under the system.
(27) "Retirement allowance" means the sum of the employer annuity and the employee annuity or any optional benefit payable in lieu of the annuity.
(28) "Retirement system" or "system" means the South Carolina Retirement System established under Section 9-1-20.
(29) "State" or "this State" means the State of South Carolina;
(30) "Teacher" means a classroom teacher employed in the public schools supported by this State as determined by the board.
SECTION 9-1-20. South Carolina Retirement System created; System shall have powers and privileges of corporation; purposes of System.
A retirement system is hereby established and placed under the management of the State Budget and Control Board for the purpose of providing retirement allowances and other benefits for teachers and employees of the State and political subdivisions or agencies or departments thereof. The System so created shall have the power and privileges of a corporation and shall be known as the South Carolina Retirement System, and by such name all of its business shall be transacted, all of its funds invested and all of its cash, securities and other property held.
SECTION 9-1-30. Property of System exempt from taxation.
All property owned or acquired by the Retirement System for the purposes of this chapter shall be exempt from all taxes imposed by the State or any political subdivision thereof.
SECTION 9-1-40. Penalties for making false statement or record.
Any person who shall knowingly make any false statement or shall falsify or permit to be falsified any record of the System in any attempt to defraud the System as a result of such act shall be guilty of a misdemeanor and, on conviction thereof by any court of competent jurisdiction, shall be punished by a fine not exceeding five hundred dollars or imprisonment in the county jail not exceeding twelve months, or both such fine and imprisonment at the discretion of the court.
SECTION 9-1-50. Reservation of right to revise System to conform to changes in Federal Social Security Act.
The State hereby reserves the right, in case the Federal Social Security Act be so amended that the members or beneficiaries of the System can be included in the old age and survivors insurance plan provided for in said Federal Act, to revise the System upon a fair and equitable basis so that the members or beneficiaries of the System may be included under the provisions of said Federal Act.
SECTION 9-1-60. Implementation of "cafeteria" plan.
(A) The System may develop and implement a program for the administration of a flexible benefits or "cafeteria" plan as defined by Section 125 of the Internal Revenue Code of 1986 for all employees covered by the health and dental insurance plan administered by the System. The plan may not decrease contributions paid to or benefits paid by the System.
The South Carolina Department of Highways and Public Transportation is herewith authorized to continue its independent cafeteria or flexible benefits pilot plan and to modify and implement the plan to accomplish maximum available benefits under Internal Revenue Section 125, until such time as the Comptroller General can convert Department of Transportation employees into the state cafeteria plan.
(B) Political subdivisions may develop and implement a program for the administration of a flexible benefits or "cafeteria" plan as defined by Section 125 of the Internal Revenue Code of 1986, as amended, for their employees. The plan may not decrease contributions paid to or benefits paid by the system. For political subdivisions that also participate in the plan adopted pursuant to subsection (A) of this section, any separate cafeteria plan adopted pursuant to this subsection may provide benefits in addition to, but shall not include, the specific types of benefits provided to employees under the plan adopted pursuant to subsection (A) of this section.
(C) An employer or coalition of employers working in concert may develop and implement a program for the administration of a flexible benefits or "cafeteria" plan as defined by Section 125 of the Internal Revenue Code of 1986, as amended, for their employees. The plan may not decrease contributions paid to or benefits paid by the system. For employers or coalition of employers working in concert, that also participate in the plan adopted pursuant to subsection (A) of this section, any separate cafeteria plan adopted pursuant to this subsection may provide benefits in addition to, but shall not include, the specific types of benefits provided to employees under the plan adopted pursuant to subsection (A) of this section.
SECTION 9-1-70. Repealed by 1990 Act No. 458, Section 2, eff May 3, 1990.
SECTION 9-1-80. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-100. Payments to beneficiaries may include payments to persons, trustees, and estates.
Payments made to beneficiaries pursuant to the provisions of this chapter may include payments to a person or persons, trustees, and estates.
ARTICLE 3.
ADMINISTRATION
SECTION 9-1-210. State Budget and Control Board shall administer System.
The general administration and responsibility for the proper operation of the System and for making effective the provisions hereof are hereby vested in the State Budget and Control Board.
SECTION 9-1-220. Repealed by 2005 Act No. 153, Pt. III Section 5, eff July 1, 2005.
SECTION 9-1-230. Authority to engage actuarial and other services.
The Board shall engage such actuarial and other services as shall be required to transact the business of the System.
SECTION 9-1-240. Appointment and duties of actuary.
The Board shall designate an actuary who shall be the technical adviser of the Board on matters regarding the operation of the System and shall perform such other duties as are required in connection therewith.
SECTION 9-1-250. Investigation and valuation by actuary every five years.
At least once in each five-year period, the first of which began in 1947, the actuary shall make an actuarial investigation into the mortality, service and compensation experience of the members and beneficiaries of the System and shall make a valuation of the contingent assets and liabilities of the System and the Board, after taking into account the results of such investigations and valuations, shall adopt for the System such mortality, service and other tables as shall be deemed necessary.
SECTION 9-1-260. Annual valuation by actuary.
On the basis of regular interest and tables last adopted by the Board the actuary shall make an annual valuation of the contingent assets and liabilities of the System.
SECTION 9-1-270. Board shall keep actuarial data in convenient form.
The Board shall keep in convenient form such data as shall be necessary for actuarial valuation of the contingent assets and liabilities of the System and for checking the experience of the System.
SECTION 9-1-280. Board shall determine interest rate; base rate established.
The Board shall determine from time to time the rate of regular interest for use in all calculations, with the rate of four per cent per annum applicable unless heretofore or hereafter changed by the Board.
SECTION 9-1-290. Rules and regulations.
Subject to the limitations hereof, the Board shall, from time to time, establish rules and regulations for the administration of the System and for the transaction of business. The Board shall also, from time to time, in its discretion, adopt rules and regulations to prevent injustices and inequalities which might otherwise arise in the administration of the System.
SECTION 9-1-300. Records and reports.
The Board shall keep a record of all its proceedings under this chapter, which shall be open to public inspection. It shall publish annually a report showing the fiscal transactions of the System for the preceding year, the amount of the accumulated cash and securities of the System and the last balance sheet showing the financial condition of the System by means of an actuarial valuation of the contingent assets and liabilities of the System.
SECTION 9-1-310. Administrative costs of retirement systems funded from interest earnings; allocation of costs.
The administrative cost of the South Carolina Retirement System, the South Carolina Police Officers Retirement System, the Retirement System for Members of the General Assembly of the State of South Carolina, the Retirement System for Judges and Solicitors of the State of South Carolina, and the National Guard Retirement System must be funded from the interest earnings of the above systems. The allocation of the administrative costs of the systems must be made by the State Budget and Control Board and must be based upon a proration of the cost in proportion to the assets that each system bears to the total assets of all of the systems for the most recently completed fiscal year.
SECTION 9-1-320. Confidentiality of member records.
All records of all active, retired, and inactive members maintained by the South Carolina Retirement Systems are classified as confidential records. These records are exempt from the disclosure requirements of Chapter 4 of Title 30, and shall not be disclosed to third parties, except where authorized by the member or where requested by state and federal authorities, and then only at the sole discretion of the director of the South Carolina Retirement Systems.
ARTICLE 5.
MEMBERSHIP IN SYSTEM
SECTION 9-1-410. Membership generally.
The membership of the System shall be composed as provided in this article.
SECTION 9-1-420. Certain persons employed after December 31, 1948, are automatically members of System.
All persons who have or shall become teachers or employees after December 31, 1948, except those specifically excluded under Section 9-1-450 or those as to whom membership is optional under Sections 9-1-510 to 9-1-560, have become or shall become members of the System as a condition of their employment.
SECTION 9-1-425. Contributing member of system.
Notwithstanding any other provision of law, a contributing member of the System shall remain a contributing member while under employment to an employer covered by the System.
SECTION 9-1-430. Special provision for certain persons employed between April 26, 1945 and December 31, 1966.
All persons who were teachers or State, county or municipal employees on April 26, 1945, or who became such after this date but on or before December 31, 1966, except those specifically excluded under Section 9-1-450 and the persons permitted to exercise the option under Sections 9-1-510 to 9-1-560, became members as of July 1, 1945, or as of the date of last employment, if later, unless on or before December 31, 1948, they filed with the Board on a form prescribed by the Board a notice of their election not to be covered in the membership of the System and a duly executed waiver of all present and prospective benefits which would otherwise inure to them on account of their participation in the System.
SECTION 9-1-440. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-450. Members of other agency or departmental retirement plans.
Notwithstanding any provisions to the contrary, any teacher or employee who was a member of any other retirement plan or fund in operation on April 26, 1945 under sponsorship of any governmental agency or department shall not be entitled to membership in the System unless on or before July 1, 1946 any such teacher or employee indicated by a notice filed with the Board on a form prescribed by the Board his individual election and choice to participate in the System. If a majority of the members of any such retirement plan or fund so voted all members of that retirement plan or fund became eligible to participate in the System and became members of the System unless within thirty days next succeeding a date named by the Board they elected not to become members.
SECTION 9-1-460. Discontinuance of certain local plans or funds.
If the majority of the members of a retirement or pension plan or fund voted to enter the System in the manner described in Section 9-1-450, the local plan or fund was discontinued and the payment of all pensions to members on the pension roll as of the date of discontinuance became and is an obligation of the city, county or other unit in which the plan or fund was operated and shall be continued and paid by such city, county or other unit.
SECTION 9-1-470. Political subdivisions may apply for admission to System as employers.
A county, municipality, or other political subdivision of the State, an agency or department of them, including a school board, a service organization as defined in Section 9-1-10(11)(e), and any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, in its discretion, may become an employer by applying to the board for admission to the system and by complying with the requirements and the regulations of the board.
SECTION 9-1-480. Employees of political subdivisions as members.
All persons, except those specifically excluded in Sections 9-1-450 and 9-1-490 and the persons permitted to exercise the option under Sections 9-1-510 to 9-1-560, who are employed by any county, municipality, or other political subdivision or agency or department of them, any eligible service organization, or any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, after the admission of the county, municipality, or other subdivision, agency, or department of them, service organization, or any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, into the System under the provisions of this section, shall become members of the System as a condition of their employment. All persons, except those specifically excluded in Section 9-1-450 and persons permitted to exercise the option under Sections 9-1-510 to 9-1-560, who are employed by any county, municipality, or other political subdivision or agency or department of them, by any eligible service organization, or any nonprofit corporation created under the provisions of Chapter 35 of Title 33, for the purpose of supplying water and sewer, at the date of the admission of the county, municipality, or other subdivision or agency or department, or eligible service organization, or any nonprofit corporation created under the provisions of Chapter 35, Title 33, for the purpose of supplying water and sewer, into the System under the provisions of this section become members on the date of the admission, unless within a period of six months next following the admission they have filed with the Board on a form prescribed by the Board a notice of their election not to be covered in the membership and a duly executed waiver of all present and prospective benefits which would otherwise inure to them on account of their participation in the System.
SECTION 9-1-490. Firemen and peace officers.
A person employed by the State or by any county, municipality or other political subdivision in the capacity of a fireman or a peace officer shall not be required to participate in the Retirement System if such person is or becomes a member of any fireman's pension fund or plan which may be established or created pursuant to law or the police insurance and annuity fund.
SECTION 9-1-500. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-510. Option of employees and teachers receiving $100 or less a month; legislators, and certain elected officials.
All employees and teachers having a monthly compensation from public funds of one hundred dollars or less and members of the General Assembly may exercise the option within thirty days after entering upon the discharge of such duties not to become a member of the System. Elected officials who are not fulltime employees and who earn nine thousand dollars annually, or less, may exercise an option not to become members of the system.
SECTION 9-1-520. Certain members of General Assembly may elect to remain members of System; contributions.
Members of the General Assembly who have been members of the South Carolina Retirement System for at least ten years may elect to remain a member of the System within one year following termination of service in the General Assembly and shall make yearly contributions to the System in an amount equivalent to contributions payable by active members of the General Assembly.
SECTION 9-1-530. Certain former legislators may elect to remain members following termination of service; contributions; members must establish service and qualify for allowance on or before December 31, 1965.
Members of the General Assembly who have been members of the South Carolina Retirement System and a member of the General Assembly for at least eight years may elect to remain a member of the System within one year following termination of service in the General Assembly and shall make yearly contributions to the System in an amount equivalent to contributions payable by active members of the General Assembly. Such members may establish such service and qualify for a retirement allowance from the Retirement System provided they do so on or before December 31, 1965.
SECTION 9-1-540. Certain constitutional officers and members of General Assembly may elect, prior to December 31, 1965, to return to System.
Any constitutional officer who has been a member of the South Carolina Retirement System and who has at least ten years of creditable service either as a constitutional officer or as a member of the General Assembly, or a combination of both under the System and who has separated prior to May 28, 1965 may elect to come under the provisions hereof; provided, he makes such election on or before December 31, 1965, and has not withdrawn his contributions from the System. Such constitutional officer shall make yearly contributions to the System in an amount equivalent to contributions payable by active members of the General Assembly.
SECTION 9-1-550. Option of certain public school employees.
Any teacher or employee employed in connection with the public school pupil transportation system or in connection with any program or activity defined by the Board as being of a nonpermanent nature may exercise an option not to become a member of the System, if such option is exercised within thirty days after entering upon the discharge of his duties in such employment.
SECTION 9-1-560. Option of day laborers.
Day laborers may exercise an option not to become members of the System, provided they file notice thereof within thirty days after beginning work as such day laborers.
SECTION 9-1-570. Option of State employees required to become members of Federal Railroad Retirement System.
Any person who becomes an employee of the State and, because of the nature of his employment, is required to become a member of the Federal Railroad Retirement System, may elect to become, or not to become, a member of the South Carolina Retirement System, provided that such option is exercised within thirty days after he enters upon the discharge of the duties of such position.
SECTION 9-1-580. Option of certain hospital employees.
(A) Any persons employed by a hospital, which is an employer under the system by application, in the capacity of a physician, nursing service personnel, technicians, housekeeping personnel, dietary personnel, and laundry personnel may elect not to become members of the South Carolina Retirement System, if this option is exercised within thirty days after they enter upon the discharge of their duties. The option provided for in this section is irrevocable.
(B) If for any reason, a determination is made that a person who exercised the option provided for in subsection (A) is entitled to any benefit provided pursuant to this title, the cost to establish service credit must be calculated pursuant to Section 9-1-1140(A). This calculation must be based on the person's current salary or career highest fiscal year salary for any period of time the person was employed in a position that otherwise would have been covered by membership in the system, regardless of whether the person requests to purchase all of the eligible service credit. The calculated cost must be paid solely by the person's employer, the person, or any combination of these.
(C) For purposes of this section, "physician" means a person who is licensed to practice medicine or osteopathy in this State in accordance with Chapter 47, Title 40.
SECTION 9-1-610. Determination of who is teacher or employee.
In all cases of doubt, the Board shall determine whether any person is a teacher or employee for the purposes of the System.
SECTION 9-1-620. Effect on members, beneficiaries, their widows or other dependents, of other statutes.
Subject to the provisions of Chapter 5 of this Title, no other provisions of law in any other statute which provides wholly or partly at the expense of the State for annuities, pensions or retirement benefits for teachers or employees of the State, their widows or other dependents, shall apply to members or beneficiaries of the System, their widows or other dependents.
SECTION 9-1-630. Certain persons may withdraw from System.
The Director of the South Carolina Retirement System is authorized to permit any member of the System who has joined through error or misunderstanding to withdraw from the System.
SECTION 9-1-640. Employers and members divided into two classes; change from Class One to Class Two.
Notwithstanding any other provisions of law governing the System, effective July 1, 1964, there shall be two classes of participating employers and two classes of members. Class One employers shall include all employers who irrevocably elect, by written notification to the Board not later than December 31, 1964, to remain, and to have members in their employ remain, under the provisions of the System as in effect on June 30, 1964. Class Two employers shall include all employers who irrevocably elect, by written notification to the Board not later than December 31, 1964, to participate, and to have members in their employ participate, under the provisions of the System as amended effective July 1, 1964. Any such notification shall become effective for all purposes as of July 1, 1964. Failure by any employer to file such notification shall be deemed an irrevocable election by the employer to be a Class One employer. In any event, the State shall be a Class Two employer. Members in the employ of a Class One employer shall be Class One members, and members in the employ of a Class Two employer shall be Class Two members. Any employer becoming such on or after July 1, 1964 shall be a Class Two employer. In the event that a member shall transfer, without break in membership, from one class to another, the Board shall determine his benefit upon retirement in an equitable manner by uniform rules consistent herewith.
Notwithstanding the foregoing, any Class One employer may elect to become a Class Two employer and have employees in its employ participate under the provisions of the System as amended effective July 1, 1964; provided, that such employer and each and every such member shall make such additional contributions to the System, plus regular interest, as would have been required had such employer become a Class Two employer as of July 1, 1964.
Effective July 1, 1976, or any subsequent July first, a Class One employer may elect Class Two coverage on July 1, 1976, or as of July first of any year thereafter. It is mandatory for each Class One employee of any such employer to participate in Class Two coverage from the effective date of the employer election. Upon service retirement, a member shall receive a service retirement allowance equal to the sum of his benefit computed by the Class One formula for service credited under Class One membership and his benefit computed by the Class Two formula for service credited under Class Two membership. A Class One member may convert Class One service to Class Two by paying into the System two and one-half percent of his earnable compensation, or the average of the highest twelve consecutive quarters, whichever is greater, for each year prorated for periods of less than one year. A member who elects to convert from Class One to Class Two must convert all such service for which eligible.
SECTION 9-1-650. Continuation of membership in correlated systems.
As used in this section, "correlated system" shall mean one or more of the following:
(1) South Carolina Retirement System;
(2) South Carolina Police Officers' Retirement System;
(3) Retirement System for members of the General Assembly of the State of South Carolina.
If a member of any correlated system ceases to occupy a position covered under the System and if, within the protective period and under such conditions as are set forth in the correlated system for continuation of membership therein, he accepts a position covered by another correlated system, he shall notify the Director of each System of the employment, and his membership in the first System must be continued so long as his membership in the other System continues. Service credited to the member under the provisions of the first System must be considered service credits for the purpose of determining eligibility for benefits, but not the amount thereof, under the other System. Any benefit under any one of the correlated systems must be computed solely on the basis of service and contributions credited under that System, and must be payable at such times and subject to such age and service conditions as are set forth therein, except the average final salary under either the South Carolina Retirement System or the Police Officers Retirement System may be used for the benefit calculation under both systems for consecutive earned service credit. A member shall not be eligible to receive retirement payments so long as he is employed in a position covered by the South Carolina Retirement System or the South Carolina Police Officers Retirement System.
SECTION 9-1-660. Firemen eligible for Police Officers Retirement System; benefits.
Any county, municipality or other political subdivision of the State and any agency or department thereof which has firemen it employs covered under the South Carolina Retirement System may become an employer and have such firemen covered under the South Carolina Police Officers Retirement System by applying for admission to the System on July 1, 1976, or any subsequent July first. A majority of the persons then employed as firemen by the prospective employer must elect irrevocably to become members of the South Carolina Police Officers Retirement System as of the requested date of admission.
Any fireman who is a member of the South Carolina Retirement System and who becomes a member of the South Carolina Police Officers Retirement System as provided in this section shall be continued as a member under the provisions of the South Carolina Retirement System so long as his membership in the South Carolina Police Officers Retirement System continues. Service credited to the member under the provisions of the South Carolina Police Officers Retirement System shall be considered for the purpose of determining eligibility for benefits but not the amount thereof under the South Carolina Retirement System. Any benefit under either one of these two correlated systems shall be computed solely on the basis of service and contributions credited under that System, but in determining the member's average final compensation, his compensation received during credited service under both Systems shall be taken into account. Such benefits shall be payable at such times and subject to such age and service conditions as provided under the respective Systems; provided, however, a member shall not be eligible to receive retirement payments so long as he is employed in a position covered by the South Carolina Retirement System or the South Carolina Police Officers Retirement System. Notwithstanding the above, the disability retirement benefit shall only be paid from and based on the benefit provisions of the System to which the member is contributing at the time of disability and shall be based on the total of his credited service under both Systems. The amount of accumulated contributions of such disabled member which is credited to his account under the System to which he is not contributing at the time of disability, shall be transferred to the System from which his disability retirement benefit shall be paid.
For the purposes of this section, "fireman" shall mean any person who receives his salary from an employer and who is required by the terms of his employment, either by election or appointment, to give his time to prevention and control of property destruction by fire. No fireman shall be eligible under this section unless his employer certifies to the System that his service as a fireman will require at least one thousand, six hundred hours per year of active duty and that his salary for such service will be at least two thousand dollars per year.
SECTION 9-1-670. Members eligible for membership in South Carolina State Employees Credit Union.
Notwithstanding any other provision of law, any person who is eligible to participate in the South Carolina Retirement System shall also be eligible for membership in the South Carolina State Employees Credit Union.
ARTICLE 7.
CREDITABLE SERVICE
SECTION 9-1-810. Claims for prior service.
Under rules and regulations adopted by the Board, each member who was a teacher or employee at any time prior to July 1, 1945, and who became a member on or before December 31, 1966, was required to file a detailed statement of all service as a teacher or employee rendered by him prior to July 1, 1945, for which he claimed credit.
SECTION 9-1-820. Verification of service claimed; determination of compensation paid during period of prior service.
Subject to the restrictions herein contained and to such other rules and regulations as the Board may adopt, the Board verified or, if such verifications have not been completed, shall verify, as soon as practicable after the filing of such statements under Section 9-1-810, the service therein claimed. In lieu of a determination of the actual compensation of a member that was received during such period of prior service the Board may use for the purpose of the System the compensation rates which, if they had progressed with the rates of salary increase shown in the tables as prescribed in 9-1-250, would have resulted in the same average earnable compensation of the member for five years immediately preceding July 1, 1945 as the records show the member actually received.
SECTION 9-1-830. Prior service certificates.
Upon verification of such statements of service, the Board issued or shall issue prior service certificates certifying to each member the period of service prior to July 1, 1945 with which the member was credited on the basis of his statement of service. So long as membership continues a prior service certificate shall be final and conclusive for retirement purposes as to such service. When membership ceases, such prior service certificate shall become void. Should the teacher or employee again become a member such teacher or employee shall enter the System as a teacher or employee not entitled to prior service credit except as provided in Section 9-1-1590.
SECTION 9-1-840. What constitutes one year of service.
The Board shall fix and determine by appropriate rules and regulations how much service in any year is equivalent to one year of service, but in no case shall more than one year of service be creditable for all services in one year. Service rendered for the regular school year in any district shall be equivalent to one year's service.
SECTIONS 9-1-850, 9-1-860. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTIONS 9-1-850, 9-1-860. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
ARTICLE 9.
THREE FUNDS AND COLLECTIONS FOR FUNDS
SECTION 9-1-1010. Assets to be credited to employee annuity savings fund and employer annuity accumulation fund.
All of the assets of the System are credited, according to the purpose for which they are held, to two bookkeeping accounts, hereinafter referred to as "funds". The accounts are referred to as the employee annuity savings fund and the employer annuity accumulation fund.
SECTION 9-1-1020. Employee annuity savings fund; deductions from compensation of members of System; employer to pay required member contributions on earnings after July 1, 1982; tax treatment; funding; retirement treatment.
The employee annuity savings fund shall be the account in which shall be recorded the contributions deducted from the earnable compensation of members to provide for their employee annuities. Each employer shall cause to be deducted from the compensation of each member on each and every payroll of such employer for each and every payroll period four percent of his earnable compensation. With respect to each member who is eligible for coverage under the Social Security Act in accordance with the agreement entered into during 1955 in accordance with the provisions of Chapter 7 of this Title; however, such deduction shall, commencing with the first day of the period of service with respect to which such agreement is effective, be at the rate of three percent of the part of his earnable compensation not in excess of four thousand eight hundred dollars, plus five percent of the part of his earnable compensation in excess of four thousand eight hundred dollars. In the case of any member so eligible and receiving compensation from two or more employers, such deductions may be adjusted under such rules as the Board may establish so as to be as nearly equivalent as practicable to the deductions which would have been made had the member received all of such compensation from one employer. In determining the amount earnable by a member in a payroll period, the Board may consider the rate of annual earnable compensation of such member on the first day of the payroll period as continuing throughout such payroll period and it may omit deduction from earnable compensation for any period less than a full payroll period if a teacher or employee was not a member on the first day of the payroll period.
Each employer shall certify to the Board on each and every payroll or in such other manner as the Board may prescribe the amounts to be deducted and such amounts shall be deducted and, when deducted, shall be credited to said employee annuity savings fund, to the individual accounts of the members from whose compensation the deductions were made.
The rates of the deductions, without regard to a member's coverage under the Social Security Act, must be the percentage of earnable compensation as provided in the following schedule:
Class One Class Two
Before July 1, 2005 5 6
July 1, 2005 through
June 30, 2006 5.25 6.25
After June 30, 2006 5.50 6.50"
Each department and political subdivision shall pick up the employee contributions required by this section for all compensation paid on or after July 1, 1982, and the contributions so picked up shall be treated as employer contributions in determining federal tax treatment under the United States Internal Revenue Code. For this purpose, each department and political subdivision is deemed to have taken formal action on or before January 1, 2009, to provide that the contributions on behalf of its employees, although designated as employer contributions, shall be paid by the employer in lieu of employee contributions. The department and political subdivision shall pay these employee contributions from the same source of funds which is used in paying earnings to the employee. The department and political subdivision may pick up these contributions by a reduction in the cash salary of the employee.
The employee, however, must not be given the option of choosing to receive the contributed amount of the pick ups directly instead of having them paid by the employer to the retirement system. Employee contributions picked up shall be treated for all purposes of this section in the same manner and to the extent as employee contributions made prior to the date picked up.
Payments for unused sick leave, single special payments at retirement, bonus and incentive-type payments, or any other payments not considered a part of the regular salary base are not compensation for which contributions are deductible. Contributions are deductible on up to and including forty-five days' termination pay for unused annual leave. If a member has received termination pay for unused annual leave on more than one occasion, contributions are deductible on up to and including forty-five days' termination pay for unused annual leave for each termination payment for unused annual leave received by the member. However, only an amount up to and including forty-five days' pay for unused annual leave from the member's last termination payment shall be included in a member's average final compensation calculation.
SECTION 9-1-1030. Deductions must be made although compensation is thereby reduced below legal minimum; consent to deductions.
The deductions provided for in Section 9-1-1020 shall be made notwithstanding that the minimum compensation provided for by law for any member shall be reduced thereby. Every member shall be deemed to consent and agree to the deduction made and provided for in said section and shall receipt for his full compensation, and payment of such compensation less such deduction shall be a full and complete discharge and acquittance of all claims and demands whatsoever for the services rendered by such person during the period covered by such payments, except as to the benefits provided hereunder.
SECTION 9-1-1040. Repealed by 2000 Act No. 387, Part II, Section 67R, eff January 1, 2001.
SECTION 9-1-1050. Employer annuity accumulation fund; contributions shall be paid by employers.
The employer annuity accumulation fund shall be the account:
(1) In which shall be recorded the reserves on all employee annuities in force and against which shall be charged all employee annuities and all benefits in lieu of employee annuities;
(2) In which must be recorded all reserves for the payment of all employer annuities and other benefits payable from contributions made by employers and against which is charged all employer annuities and other benefits on account of members with prior service credit; and
(3) In which shall be recorded the reserves on all employer annuities granted to members not entitled to prior service credit and against which such employer annuities and benefits in lieu thereof shall be charged.
There shall be paid to the System and credited to the employer annuity accumulation fund contributions by the employers in an amount equal to a certain percentage of the earnable compensation of each member employed by each employer to be known as the "normal contribution" and an additional amount equal to a percentage of such earnable compensation to be known as the "accrued liability contribution." The rate per cent of such contributions shall be fixed on the basis of the liabilities of the system as shown by actuarial valuation.
SECTION 9-1-1060. Normal contribution rate.
On the basis of regular interest and of such mortality and other tables as shall be adopted by the Board, the actuary engaged by the Board to make each annual valuation during the period over which the accrued liability contribution is payable, immediately after making such valuation, shall determine the uniform and constant percentage of the earnable compensation of the average new entrant throughout his entire period of active service which would be sufficient to provide for the payment of any employer annuity payable on his account. The rate per cent so determined shall be known as the "normal contribution rate." After the accrued liability contribution has ceased to be payable, the normal contribution rate shall be the rate per cent of the earnable compensation of all members obtained by deducting from the total liabilities of the employer annuity accumulation fund the amount of the funds in hand to the credit of that account and dividing the remainder by one per cent of the present value of the prospective future earnable compensation of all members as computed on the basis of the mortality and service tables adopted by the Board and regular interest. The normal rate of contribution shall be determined by the actuary after each valuation.
The rate per cent determined immediately after the first valuation by the actuary engaged by the Board as the rate per cent of the total annual earnable compensation of all members which is equivalent to four per cent of the amount of the total employer annuity liability on account of all members and beneficiaries which is not dischargeable by the aforesaid normal contribution made on account of such members during the remainder of their active service shall be known as the "accrued liability contribution rate." Such rate shall be increased on the basis of subsequent valuations if benefits are increased over those included in the valuation on the basis of which the original accrued liability contribution rate was determined. Upon certification by the actuary engaged by the Board that the accrued liability contribution rate may be reduced without impairing the System, the Board may cause the accrued liability contribution rate to be reduced.
SECTION 9-1-1080. Minimum contributions to employer annuity accumulation fund.
The total amount payable in each year by each employer for credit to the employer annuity accumulation fund shall not be less than the sum of the rate per cent known as the normal contribution rate and the accrued liability contribution rate of the total earnable compensation of all members during the preceding year. Subject to the provisions of Section 9-1-1070, the amount of each annual accrued liability contribution shall be at least three per cent greater than the preceding annual accrued liability payment, and the aggregate payment by employers shall be sufficient, when combined with the amount in the fund, to provide the employer annuities and other benefits payable out of the fund during the year then current.
SECTION 9-1-1090. Discontinuance of accrued liability contribution.
The accrued liability contribution shall be discontinued as soon as the accumulated reserve in the employer annuity accumulation fund shall equal the present value, as actuarially computed and approved by the Board, of the total liability of such fund less the present value, computed on the basis of the normal contribution rate then in force, of the prospective normal contributions to be received on account of all persons who are at the time members.
SECTION 9-1-1100. Employer annuities and benefits to be paid from employer annuity accumulation fund.
All employer annuities, and benefits in lieu thereof, must be paid from the employer annuity accumulation fund.
SECTION 9-1-1110. Obligations of employer annuity accumulation fund.
The maintenance of employee annuity reserves and employer annuity reserves as provided for hereunder and regular interest creditable to the various funds as provided in this article and the payment of all annuities, retirement allowances, refunds, and other benefits granted hereunder, are made obligations of the employer annuity accumulation fund. All income, interest, and dividends derived from deposits and investments authorized hereunder must be used for payment of the obligations of the fund.
SECTION 9-1-1120. Transfer between funds on return of retired employee to active service.
Should any beneficiary be restored to active service and again become a member under the provisions of Section 9-1-1590, his employee annuity reserve shall be transferred from the employer annuity accumulation fund to the employee annuity savings fund and credited to his individual account therein.
SECTION 9-1-1130. Earnings to be credited to employer annuity accumulation fund.
All interest and dividends earned on the invested assets of the System must be credited to the employer annuity accumulation fund. The Board shall credit regular interest to the individual accounts of members in the employee annuity savings fund and shall transfer the amounts of the credits from the employer annuity accumulation fund. Any interest credited to the individual account of a member in the employee annuity savings fund and not payable to him under the provisions of Section 9-1-1650 upon his ceasing to be a teacher or employee except by death or retirement must be transferred from the fund to the employer annuity accumulation fund.
SECTION 9-1-1135. Interest on member accounts.
Interest shall be credited to the account of each member once each year as of June thirtieth, on the basis of the balance in the account of each member as of the previous June thirtieth. Upon the death, retirement, or termination of a member, interest shall be figured to the end of the month immediately preceding the date of refund or retirement, interest being based on the balance in such member's account as of the June thirtieth immediately preceding the date of refund or retirement.
SECTION 9-1-1140. Establishing service credits by making payments into system; career highest fiscal year salary; credits during absences; employer payments; rules and regulations; credits for unused sick leave.
(A) An active member may establish service credit for any period of paid public service by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated. A member may not establish credit for a period of public service for which the member also may receive a retirement benefit from another defined benefit retirement plan. A member may not establish service credit for public service to the extent such service purchase would violate Section 415 or any other provision of the Internal Revenue Code.
(B) An active member may establish service credit for any period of paid educational service by making a payment to the system determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated. A member may not establish credit for a period of educational service for which the member also may receive a retirement benefit from another defined benefit retirement plan. A member may not establish service credit for educational service to the extent such service purchase would violate Section 415 or any other provision of the Internal Revenue Code.
(C) An active member may establish up to six years of service credit for any period of military service, if the member was discharged or separated from military service under conditions other than dishonorable, by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated.
(D) An active member on an approved leave of absence from an employer that participates in the system who returns to covered employment within four years may purchase service credit for the period of the approved leave, but may not purchase more than two years of service credit for each separate leave period, by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated.
(E) An active member who has five or more years of earned service credit may establish up to five years of nonqualified service by making a payment to the system to be determined by the board, but not less than thirty-five percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education if the member has purchased service rendered under any of these programs pursuant to subsection (F) of this section. Periods of less than a year must be prorated.
(F) An active member may establish service credit for any period of service in which the member participated in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education, by making a payment to the system to be determined by the board, but not less than sixteen percent of the member's current salary or career highest fiscal year salary, whichever is greater, for each year of credit purchased. A member's career highest fiscal year salary shall include the member's salary while participating in the system or in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education. Periods of less than a year must be prorated. A member may not establish credit for a period of service for which the member also may receive a retirement benefit from another defined benefit retirement plan. A member may not establish service credit under this subsection to the extent such service purchase would violate Section 415 or any other provision of the Internal Revenue Code. Service purchased under this subsection is 'earned service' and counts toward the required five or more years of earned service necessary for benefit eligibility. Compensation earned for periods purchased under this subsection while participating in the State Optional Retirement Program, the Optional Retirement Program for Teachers and School Administrators, or the Optional Retirement Program for Publicly Supported Four-Year and Postgraduate Institutions of Higher Education shall be treated as earnable compensation and shall be used in calculating a member's average final compensation. A member purchasing service under this subsection who has funds invested in a TIAA Traditional account under a TIAA-CREF Retirement Annuity contract shall be eligible to make a plan to plan transfer in accordance with the terms of that contract.
(G) An active member who previously withdrew contributions from the system may reestablish the service credited to the member at the time of the withdrawal of contributions by repaying the amount of the contributions previously withdrawn, plus regular interest from the date of the withdrawal to the date of repayment to the system.
(H) An active member establishing retirement credit pursuant to this chapter may establish that credit b
