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Current Status Bill Number:View additional legislative information at the LPITS web site.3885 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19990408 Primary Sponsor:J. Smith All Sponsors:J. Smith, T. Brown, Simrill, Moody-Lawrence, Seithel, Quinn, Allen, Bailey, Bales, Battle, Bowers, Breeland, G. Brown, Cobb-Hunter, Davenport, Delleney, Gourdine, Govan, Harris, Harrison, Hayes, J. Hines, Inabinett, Jennings, Kennedy, Klauber, Lee, Lloyd, Lourie, Mack, Maddox, McCraw, McGee, M. McLeod, W. McLeod, Miller, J.H. Neal, Neilson, Ott, Parks, Phillips, Rutherford, Scott, F. Smith, Townsend, Walker, Wilder and Wilkes Drafted Document Number:l:\council\bills\kgh\15503sd99.doc Residing Body:House Current Committee:Ways and Means Committee 30 HWM Subject:Retirement System, optional retirement of twenty-five years, creditable service at twenty-eight years; Early Retirement History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ House 19990408 Introduced, read first time, 30 HWM referred to Committee Versions of This Bill
TO AMEND SECTIONS 9-1-1510 AND 9-1-1550, BOTH AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SERVICE RETIREMENT UNDER THE SOUTH CAROLINA RETIREMENT SYSTEM, SO AS TO REDUCE FROM THIRTY TO TWENTY-EIGHT THE YEARS OF CREDITABLE SERVICE REQUIRED TO RETIRE AT ANY AGE WITHOUT PENALTY; TO AMEND SECTIONS 9-1-1515, 9-1-1660, AND 9-1-1770, AS AMENDED, AND 9-1-1850, AS AMENDED, RELATING TO EARLY RETIREMENT OPTIONS, ELECTION OF A BENEFIT ON THE INSERVICE DEATH OF A MEMBER, AND AMOUNTS DUE ESTATES OF DECEASED MEMBERS UNDER THE GROUP LIFE INSURANCE PLAN, SO AS TO PROVIDE THAT THE ELECTION OF A MEMBER WITH TWENTY-FIVE YEARS CREDITED SERVICE TO BUY SUFFICIENT CREDIT FOR SERVICE RETIREMENT APPLIES TO THE SOUTH CAROLINA RETIREMENT SYSTEM, UPDATE THE BENEFIT ELECTION OPTION ON THE INSERVICE DEATH OF A MEMBER TO REFLECT OTHER CHANGES SINCE ORIGINAL ENACTMENT, AND TO CONFORM THESE OPTIONS AND BENEFITS TO SERVICE RETIREMENT AFTER TWENTY-EIGHT YEARS CREDITABLE SERVICE AT ANY AGE WITHOUT PENALTY AS PROVIDED IN THIS ACT; TO AMEND SECTIONS 9-1-1810 AND 9-11-310, RELATING TO THE ANNUAL COST OF LIVING ADJUSTMENT AUTHORIZED FOR RETIREES AND BENEFICIARIES UNDER THE SOUTH CAROLINA RETIREMENT SYSTEM AND THE SOUTH CAROLINA POLICE OFFICERS' RETIREMENT SYSTEM AND THE METHOD OF CALCULATING THE ADJUSTMENT, SO AS TO MAKE MANDATORY THE PAYMENT OF AMOUNTS UP TO ONE PERCENT CALCULATED UNDER THE ADJUSTMENT FORMULA, AND TO DELETE OBSOLETE PROVISIONS, AND TO CONFORM IN BOTH SECTIONS REFERENCES TO THE CONSUMER PRICE INDEX USED IN CALCULATING THE COST OF LIVING ADJUSTMENT; AND TO AMEND SECTION 9-1-1220, AS AMENDED, RELATING TO EMPLOYER CONTRIBUTIONS TO THE SOUTH CAROLINA RETIREMENT SYSTEM, SO AS TO INCREASE THE EMPLOYER CONTRIBUTION RATE BY ONE AND ONE-HALF PERCENT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 9-1-1220 of the 1976 Code, as last amended by Act 189 of 1989, is further amended by adding at the end:
"Effective January 1, 2000, the State Budget and Control Board shall increase the employer contribution rate for the South Carolina Retirement System by one and one-half percent."
SECTION 2. The first paragraph of Section 9-1-1510 of the 1976 Code is amended to read:
"Any A member may retire upon written application to the board system setting forth at what time, not more than ninety days prior before nor more than six months subsequent to after the execution and filing thereof of the application, he desires to be retired, if such the member at the time so specified for his service retirement shall have has attained the age of sixty years or shall have has thirty twenty-eight or more years of creditable service and shall have has separated from service and, if the time so specified is subsequent to after the date of application, notwithstanding that, during such the period of notification, he may have separated from service."
SECTION 3. Section 9-1-1515 of the 1976 Code, as added by Act 559 of 1990, is amended to read:
"Section 9-1-1515. (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.
(B) The benefits for a member electing early retirement 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 twenty-eight.
(C) A member who elects early retirement under this section is ineligible to receive any cost-of-living increase provided by law to retirees until the second July first after the date the member attains age sixty; or the second July first after the date the member would have thirty twenty-eight years' creditable service had he not retired, whichever is earlier.
(D)(1) Except as provided in item (2) of this subsection, a member who elects early retirement under this section is not covered by the State Insurance Benefits Plan until the earlier of:
(a) the date the member attains age sixty, or
(b) the date the member would have thirty twenty-eight years' creditable service had he not retired.
(2) A member taking early retirement may maintain coverage under the State Insurance Benefits Plan until the date his coverage is reinstated pursuant to item (1) of this subsection by paying the total premium cost, including the employer's contribution, in the manner provided by the Division of Insurance Services of the State Budget and Control Board."
SECTION 4. Subsections (A) and (B) of Section 9-1-1550 of the 1976 Code, as last amended by Act 189 of 1989, are further amended to read:
"(A) Upon retirement from service on or after July 1, 1964, a Class One member shall receive a service retirement allowance which shall consist of:
(1) An employee annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his retirement; and
(2) An employer annuity equal to the employee annuity allowable at the age of sixty-five years or at age of retirement, whichever is less, computed on the basis of contributions made prior to the age of sixty-five years; and
(3) If he has a prior service certificate in full force and effect, an additional employer annuity which must be equal to the employee annuity which would have been provided at age sixty-five or at age of retirement, whichever is less, by twice the contributions which he would have made during his entire period of prior service had the system been in operation and had he contributed thereunder during such entire period.
Upon retirement from service on or after July 1, 1989 1999, a Class One member shall receive a service retirement allowance computed as follows: If the member's service retirement date occurs on or after his sixty-fifth birthday, or after he has completed thirty twenty-eight or more years of creditable service, the allowance must be equal to one and forty-five hundredths percent of his average final compensation multiplied by the number of years of his creditable service.
If the member's service retirement date occurs before his sixty-fifth birthday and before he completes thirty twenty-eight years of creditable service, his service retirement allowance is computed as above, but is reduced by five-twelfths of one percent thereof for each month by which his retirement date precedes the first day of the month, prorated for periods less than a month, coincident with or next following his sixty-fifth birthday.
Notwithstanding the foregoing provisions, any Class One member who retires on or subsequent to July 1, 1976, shall receive not less than the benefit provided under the formula in effect before July 1, 1976.
(B) Upon retirement from service on or after July 1, 1989 1999, a Class Two member shall receive a service retirement allowance computed as follows:
(1) If the member's service retirement date occurs on or after his sixty-fifth birthday or after he has completed thirty twenty-eight or more years of creditable service, the allowance must be equal to one and eighty-two hundredths percent of his average final compensation, multiplied by the number of years of his creditable service.
(2) If the member's service retirement date occurs before his sixty-fifth birthday and before he completes the thirty twenty-eight years of creditable service, his service retirement allowance is computed as in item (1) above but is reduced by five-twelfths of one percent thereof for each month, prorated for periods less than a month, by which his retirement date precedes the first day of the month coincident with or next following his sixty-fifth birthday.
(3) Notwithstanding the foregoing provisions, a Class Two member whose creditable service began before July 1, 1964, shall receive not less than the benefit provided by subsection (A) of this section."
SECTION 5. Section 9-1-1660 of the 1976 Code is amended to read:
"Section 9-1-1660. (1) The person nominated by a member to receive the full amount of his accumulated contributions in the event of his death before retirement may, if such the member dies after the attainment of age sixty-five sixty or after the accumulation of fifteen years of creditable service and death occurs in service, elect to receive in lieu of the accumulated contributions an allowance for life in the same amount as if the deceased member had retired at the time of his death and had named the person as beneficiary under an election of Option 2 of Section 9-1-1620. For purposes of the benefit calculation, a member under age sixty with less than thirty twenty-eight years' credit is assumed to be sixty years of age.
(2) Any A person otherwise eligible under subsection (1) of this section to elect to receive an allowance who has attained age sixty-five sixty or after the accumulation of thirty twenty-eight years of creditable service or after the attainment of age sixty with twenty fifteen or more years of creditable service but who has received a refund of the member's accumulated contributions under Section 9-1-1650 may, upon repayment of the refund to the system in a single sum, make the election provided for in subsection (1). The monthly payments under Option 2 to the person date from the time of the repayment of the accumulated contributions to the system."
SECTION 6. The last paragraph of Section 9-1-1770 of the 1976 Code, as last amended by Act 412 of 1990, is further amended to read:
"Upon the death of a retired member on or after July 1, 1985 after 1999, there must be paid to the designated beneficiary or beneficiaries, if living at the time of the retired member's death, otherwise to the retired member's estate, a death benefit of one thousand dollars if the retired member had ten years of creditable service but less than twenty years, two thousand dollars if the retired member had twenty years of creditable service but less than thirty twenty-eight, and three thousand dollars if the retired member had at least thirty twenty-eight years of creditable service at the time of retirement, provided the retired member's most recent employer prior to retirement is covered by the Group Life Insurance Program."
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 the index as of December 31, 1968, or the most recent prior December thirty-first subsequent thereto as of which an increase in retirement allowances was granted, must be determined, and if the 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, must be increased by four percent. If the increase in the index is less than three percent, the retirement allowance, inclusive of supplemental allowances, all as determined above, must be increased by a percentage equal to the increase in the index. The increase in retirement allowances shall commence commences the July first immediately following the December thirty-first that the increase in ratio was determined. Beginning with the calendar year ending December 31, 1981, and all increases in retirement allowances must be granted to these beneficiaries in receipt of a retirement allowance on July first immediately preceding the effective date of the increase. Any increase in allowances after the first five increases shall become is effective only if the additional liabilities, on account because of the increase in allowances, do not require an increase in the total employer rate of contribution except that any increase of up to and including one percent must be paid. Any increase in allowance granted hereunder pursuant to this section must 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 must, when and if payable, be increased by the same percent.
For purposes of this section, 'Consumer Price Index' means the Consumer Price Index for Wage Earners and Clerical Workers, as published by the United States Department of Labor, Bureau of Labor Statistics."
SECTION 8. Section 9-1-1850 of the 1976 Code, as last amended by Act 420 of 1994, is further amended to read:
"Section 9-1-1850. (A)(1) A member who has at least twenty-five years of creditable service in any retirement the system provided in this title chapter may elect to receive up to five three years of additional service credit as though the additional service credit were rendered by the member as an employee or member by paying into the member's retirement system South Carolina Retirement System the amount provided in this item. The required amount is determined by multiplying the member's current salary or the highest fiscal year salary in the member's work career, whichever is greater, by the percentage provided in this item and multiplying the result by the number of years credited, prorated for periods less than one year. The applicable percentage of salary to calculate the payment allowed pursuant to this subsection is as follows:
Years to be Credited Percentage of Salary
(a) not more than one year 58 percent
(b) over one year but not more than two years 54 percent for each year
(c) over two years but not more than three years 50 percent for each year
(d) over three years, but not more than four years 46 percent for each year
(e) over four years 42 percent for each year
(2) The member also shall pay the employer and employee cost for health and dental insurance for a time period equal to the period of service credit purchased, or until the date the member attains age sixty, at which time the member becomes eligible for employer-paid health and dental insurance.
(3) Any service credit purchased under this subsection qualifies the member for retirement, and the member must retire within ninety days after the purchase.
(B) As an alternative to the option provided in subsection (A), the member, if he has at least twenty-five years of creditable service, may elect to receive up to five three years of additional service credit as though the additional service credit were rendered by him as an employee or member upon paying into his retirement system, during the ensuing number of years he wishes to purchase in the manner the Comptroller General shall direct, the employer and employee contributions that would be due for the position that he presently holds at the salary level in effect during those years. If the position is consolidated or eliminated after the member's retirement, he shall pay the employer and employee contributions during the remaining required years at a level equal to what these contributions were for the position before its consolidation or elimination. The member also shall pay the employer and employee cost for health and dental insurance in effect during the ensuing years the member wishes to purchase. The additional service credit qualifies the member for retirement, and the member must retire within ninety days subsequent to electing the option provided by subsection (B). The salary level of the position the member presently holds, during the ensuing years the member pays the employer and employee contributions, is attributable to the member for purposes determining the member's average final compensation.
The retirement benefits of the member shall not commence until the time benefits would have been paid when the member had completed thirty twenty-eight years of service."
SECTION 9. Section 9-11-310 of the 1976 Code is amended to read:
"Section 9-11-310. As of the end of each calendar year commencing with the year ending December 31, 1974, the increase in the ratio of the Consumer Price Index to such the index as of December 31, 1973, or the most recent prior December thirty-first subsequent thereto as of which an increase in retirement allowances was granted, must be determined, and if the increase equals or exceeds three percent, the retirement allowance, exclusive of any part thereof derived from accumulated additional contributions, of each beneficiary in receipt of an allowance as of December 31, 1973, or the most recent December thirty-first subsequent thereto as of which an increase was granted, must be increased by four percent. If the increase in the index is less than three percent, the retirement allowances, as determined above, must be increased by a percentage equal to the increase in the index. The increase in retirement allowances must commence commences the July first immediately following the December thirty-first that the increase in ratio was determined.
Beginning with the calendar year ending December 31, 1981, all All increases in retirement allowances must be granted to those beneficiaries in receipt of a retirement allowance on July first immediately preceding the effective date of the increase. The increase in allowances after the first five such increases shall become becomes effective only if the additional liabilities on account of the increase in allowances do not require an increase in the employer rate of contribution except that any increase of up to and including one percent must be paid. Any increase in allowance granted hereunder pursuant to this section is permanent, irrespective of any subsequent decrease in the Consumer Price Index, and must be included in determining any subsequent increase.
The allowance of a surviving annuitant of a beneficiary whose allowance is increased under this section, must, when and if payable, must be increased by the same percent.
For purposes of this section, 'Consumer Price Index' means the Consumer Price Index (all items United States city average), for Wage Earners and Clerical Workers as published by the United States Department of Labor, Bureau of Labor Statistics."
SECTION 10. Upon approval by the Governor, this act takes effect January 1, 2000.
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