S 0386 General Bill, By Anderson
 A BILL TO AMEND SECTION 9-1-1515, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO EARLY RETIREMENT UNDER THE SOUTH CAROLINA RETIREMENT SYSTEM, SO AS
 TO REVISE THE REQUIREMENTS AND ALLOW PERSONS WHO HAVE ATTAINED AGE FIFTY AND
 HAVE AT LEAST TWENTY-FIVE YEARS OF CREDITABLE SERVICE TO RETIRE WITHOUT
 PENALTY; TO AMEND SECTION 9-1-1020, AS AMENDED, RELATING TO EMPLOYEE
 CONTRIBUTIONS TO THE SOUTH CAROLINA RETIREMENT SYSTEM, SO AS TO RAISE THE
 CONTRIBUTION BY ONE AND THIRTY-EIGHT ONE HUNDREDTHS PERCENT; AND TO AMEND THE
 1976 CODE BY ADDING SECTION 1-11-760 SO AS TO REQUIRE THE STATE BUDGET AND
 CONTROL BOARD TO INCREASE EMPLOYEE-PAID PREMIUMS UNDER THE STATE HEALTH
 INSURANCE AND DENTAL PLANS IN AN AMOUNT SUFFICIENT TO OFFSET THE ADDITIONAL
 INSURANCE COSTS RESULTING FROM EARLY RETIREMENTS.

   01/21/99  Senate Introduced and read first time SJ-5
   01/21/99  Senate Referred to Committee on Finance SJ-5

TO AMEND SECTION 9-1-1515, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO EARLY RETIREMENT UNDER THE SOUTH CAROLINA RETIREMENT SYSTEM, SO AS TO REVISE THE REQUIREMENTS AND ALLOW PERSONS WHO HAVE ATTAINED AGE FIFTY AND HAVE AT LEAST TWENTY-FIVE YEARS OF CREDITABLE SERVICE TO RETIRE WITHOUT PENALTY; TO AMEND SECTION 9-1-1020, AS AMENDED, RELATING TO EMPLOYEE CONTRIBUTIONS TO THE SOUTH CAROLINA RETIREMENT SYSTEM, SO AS TO RAISE THE CONTRIBUTION BY ONE AND THIRTY-EIGHT ONE HUNDREDTHS PERCENT; AND TO AMEND THE 1976 CODE BY ADDING SECTION 1-11-760 SO AS TO REQUIRE THE STATE BUDGET AND CONTROL BOARD TO INCREASE EMPLOYEE-PAID PREMIUMS UNDER THE STATE HEALTH INSURANCE AND DENTAL PLANS IN AN AMOUNT SUFFICIENT TO OFFSET THE ADDITIONAL INSURANCE COSTS RESULTING FROM EARLY RETIREMENTS.

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

SECTION 1. Section 9-1-1515(A) and (B) of the 1976 Code, as added by Act 559 of 1990, is amended to read:

"(A) In addition to other types of retirement provided by this chapter, a member who has attained the age of fifty-five years and who has at least twenty-five years of creditable service may elect early retirement. A member electing early retirement shall apply in the manner provided in Section 9-1-1510. Notwithstanding the provisions of Sections 9-1-1510 and 9-1-1550, a member who has attained the age of fifty years and who has less than thirty but twenty-five or more years of creditable service may elect service retirement as provided in this section. A member electing service retirement must apply in the manner provided in Section 9-1-1510.

(B) The benefits for a member electing early retirement to retire under this section must be calculated in the manner provided in Section 9-1-1550, except that in lieu of any other reduction factor, his early retirement allowance is reduced by four percent a year, prorated for periods less than one year, for each year of creditable service less than thirty the case of a member retiring pursuant to this section, the reduction factor provided in that section does not apply."

SECTION 2. Section 9-1-1020 of the 1976 Code, as last amended by Act 475 of 1988, is further amended to read:

"Section 9-1-1020. 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, shall 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 that would have been made had if 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 the member on the first day of the payroll period as continuing throughout such the 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 the amounts shall certified must be deducted and, when deducted, shall must be credited to said the employee annuity savings fund, to the individual accounts of the members from whose compensation the deductions were made.

The rates of the deductions must be, without regard to a member's coverage under the Social Security Act, as follows: in the case of Class One members, five six and thirty-eight one hundredths percent of earnable compensation and, in the case of Class Two members, six seven and thirty-eight one hundredths percent of earnable compensation.

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 must be treated as employer contributions in determining federal tax treatment under the United States Internal Revenue Code; however, each department and political subdivision shall continue to withhold federal income taxes based upon these contributions until the Internal Revenue Service, or the federal courts, rule that, pursuant to Section 414(h) of the United States Internal Revenue Code, these contributions shall not be included as gross income of the employee until such time as they are distributed or made available. 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. Employee contributions picked up shall must 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 pay for unused annual leave."

SECTION 3. Article 5, Chapter 11, Title 1 of the 1976 Code is amended by adding:

"Section 1-11-760. In setting the rates of state employee contributions for state health and dental insurance programs, the State Budget and Control Board shall add an amount sufficient to offset in each fiscal year additional health and dental insurance costs incurred by the State as a result of retirements pursuant to Section 9-1-1515."

SECTION 4. This act takes effect July 1, 1999, and the amendment to Section 9-1-1515 of the 1976 Code contained in this act applies with respect to members of the South Carolina Retirement System retiring after June 30, 1999.