Bill 951

                    Current Status

Bill Number:               951
Ratification Number:       475
Act Number                 407
Introducing Body:          Senate
Subject:                   Employee annuity savings fund

(A407, R475, S951)

AN ACT TO AMEND SECTION 9-1-1170, AS AMENDED, AND SECTIONS 9-1-1010, 9-1-1050, 9-1-1100, 9-1-1110, 9-1-1130 AND 9-1-1810, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SOUTH CAROLINA RETIREMENT SYSTEM AND TO ADD SECTIONS 9-1-1820 AND 9-1-1830, SO AS TO CREATE A SPECIAL FUND TO ADMINISTER THE COST OF LIVING INCREASE FOR RETIRED MEMBERS AND BENEFICIARIES OF THE SYSTEM AND TO INCREASE THE EMPLOYER RATE OF CONTRIBUTION.

Be it enacted by the General Assembly of the State of South Carolina:

Employee annuity savings fund

Section 1. Section 9-1-1010 of the 1976 Code is amended to read:

"Section 9-1-1010. All of the assets of the System shall be credited, according to the purpose for which they are held, to three bookkeeping accounts, hereinafter referred to as 'funds'. The accounts shall be referred to as the employee annuity savings fund, the employer annuity accumulation fund and the post-retirement increase special fund."

Reserves

Section 2. Item (2) of Section 9-1-1050 of the 1976 Code is amended to read:

"(2) In which shall be recorded all reserves for the payment of all employee annuities and other benefits, with the exception of those benefits provided after June 30, 1981, in accordance with Sections 9-1-1810 and 9-1-1820, payable from contributions made by employers and against which shall be charged all employer annuities and other benefits on account of members with prior service credit; and".

Annuity and benefits

Section 3. Section 9-1-1100 of the 1976 Code is amended to read:

"Section 9-1-1100. All employer annuities, and benefits in lieu thereof, with the exception of those provided after June 30, 1981, in accordance with Sections 9-1-1810 and 9-1-1820, shall be paid from the employer annuity accumulation fund."

Maintenance of reserves

Section 4. Section 9-1-1110 of the 1976 Code is amended to read:

"Section 9-1-1110. 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, with the exception of those provided after June 30, 1981, in accordance with Sections 9-1-1810 and 9-1-1820, are hereby made obligations of the employer annuity accumulation fund. All income, interest and dividends derived from deposits and investments authorized hereunder except as otherwise provided in Section 9-1-1130 shall be used for the payment of such obligations of the fund."

Monies to be credited to special fund

Section 5. Section 9-1-1130 of the 1976 Code is amended by adding at the end:

"After June 30, 1981, the Board shall credit a portion of all interest and dividends earned on the invested assets of the System to the post-retirement increase special fund. Such portion shall be the percentage of invested assets of the System represented by the invested assets to the credit of the post-retirement increase special fund."

Board to prepare and certify statement

Section 6. Item (1) of Section 9-1-1170 of the 1976 Code is amended to read:

"(1) Upon the basis of each actuarial valuation provided herein the Board shall annually prepare and certify to each employer a statement of the total amount payable by such employer for the ensuing fiscal year to the employer annuity accumulation fund and to the post-retirement increase special fund and such amount shall be handled and disbursed in accordance with the usual appropriations;

Determination of retirement allowances

Section 7. Section 9-1-1810 of the 1976 Code is amended to read:

"Section 9-1-1810. As of the end of each calendar year commencing with the year ending December 31, 1969, the increase in the ratio of the Consumer Price Index to such Index as of December 31, 1968, or the most recent December thirty-first subsequent thereto as of which an increase in retirement allowances was granted, shall be determined, and if such increase equals or exceeds three percent, the retirement allowance, inclusive of the supplemental allowances payable under the provisions of Sections 9-1-1910, 9-1-1920 and 9-1-1930, of each beneficiary in receipt of an allowance as of December 31, 1968, or the most recent December thirty-first subsequent thereto as of which an increase was granted, shall be increased by four percent. Such increase in retirement allowances shall commence the July first immediately following the December thirty-first that such increase in ratio was determined. Any such increase in allowances after June 30, 1981, shall become effective only if sufficient assets are available in the post-retirement increase special fund created under Section 9-1-1820 to meet that year's required payment. Any increase in allowance granted hereunder shall be included in the determination of any subsequent increases, irrespective of any subsequent decrease in the Consumer Price Index.

The allowance of a surviving annuitant of a beneficiary whose allowance is increased under this section shall, when and if payable, be increased by the same percent.

For purposes of this section, 'Consumer Price Index' shall mean the Consumer Price Index for Wage Earners and Clerical Workers, as published by the United States Department of Labor, Bureau of Labor Statistics."

Post-retirement allowances

Section 8. The 1976 Code is amended by adding:

"Section 9-1-1820. The post-retirement increase special fund is hereby created which shall be the account in which shall be recorded all employer contributions earmarked for the fund and against which shall be charged, commencing with the July 1, 1981, monthly payment, all post-retirement increases in allowances granted pursuant to Section 9-1-1810 subsequent to June 30, 1981."

Further

Section 9. The 1976 Code is amended by adding:

"Section 9-1-1830. Starting July 1, 1981, there shall be paid to the System, and credited to the post-retirement increase special fund, contributions by the employers in an amount equal to two-tenths of one percent of the earnable compensation of each member employed by each employer. In addition, the State Budget and Control Board shall, on the recommendation of the actuary, transfer a portion of such monies as are received pursuant to Section 9-1-1050 that are available from time to time due to actuarial gains in the System if such transfers do not adversely affect the funding status of the System."

Time effective

Section 10. This act shall take effect upon approval by the Governor.