South Carolina General Assembly
113th Session, 1999-2000

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Bill 4706


Indicates Matter Stricken
Indicates New Matter


                    Current Status

Bill Number:                      4706
Type of Legislation:              General Bill GB
Introducing Body:                 House
Introduced Date:                  20000229
Primary Sponsor:                  Allison
All Sponsors:                     Allison, Riser and Kelley
Drafted Document Number:          l:\council\bills\bbm\9215htc00.doc
Companion Bill Number:            1204
Residing Body:                    House
Current Committee:                Ways and Means Committee 30 HWM
Subject:                          Retirement System, S.C.; Police Officers; 
                                  Retirement Systems and Pensions; Benefits, 
                                  service credit revised


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
------  20000303  Companion Bill No. 1204
House   20000229  Introduced, read first time,           30 HWM
                  referred to Committee


              Versions of This Bill

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(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A BILL

TO AMEND SECTIONS 9-1-10, AS AMENDED, 9-1-470, AS AMENDED, 9-1-1140, AS AMENDED, 9-1-1510, AS AMENDED, 9-1-1515, AS AMENDED, 9-1-1540, 9-1-1550, AS AMENDED, 9-1-1650, AS AMENDED, 9-1-1660, AND 9-1-1910, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO DEFINITIONS, MEMBERSHIP BY EMPLOYERS, PURCHASE OF SERVICE CREDIT, SERVICE RETIREMENT ELIGIBILITY AND EARLY RETIREMENT, DISABILITY RETIREMENT AND DISABILITY RETIREMENT ALLOWANCES, WITHDRAWAL OF CONTRIBUTIONS BY MEMBER AND PROVISIONS FOR BENEFICIARIES WHEN A MEMBER DIES IN SERVICE, AND THE MINIMUM BENEFIT FOR PURPOSES OF THE SOUTH CAROLINA RETIREMENT SYSTEM, SO AS TO REVISE AND PROVIDE ADDITIONAL DEFINITIONS, CORRECT CROSS-REFERENCES, CLARIFY THAT A PREREQUISITE FOR ANY BENEFIT IS AT LEAST FIVE YEARS OF EARNED SERVICE, TO REVISE ELIGIBILITY REQUIREMENTS AND PAYMENT AMOUNTS REQUIRED TO ESTABLISH SERVICE CREDIT FOR SERVICE OUTSIDE OF THE VARIOUS STATE RETIREMENT SYSTEMS AND DELETE THE LUMP SUM PURCHASE TO OFFSET A REDUCTION FOR EARLY RETIREMENT AND TO AMEND SECTIONS 9-11-10, AS AMENDED, 9-11-40, AS AMENDED, 9-11-50, AS AMENDED, 9-11-60, AS AMENDED, 9-11-70, AS AMENDED, 9-11-80, AS AMENDED, 9-11-130, 9-11-210, AS AMENDED, 9-11-220, AND 9-11-310, RELATING TO DEFINITIONS, MEMBERSHIP OF EMPLOYERS AND EMPLOYEES, CREDITED SERVICE, SERVICE RETIREMENT ELIGIBILITY AND RETIREMENT ALLOWANCES, DISABILITY RETIREMENT, PROVISIONS FOR BENEFICIARIES WHEN A MEMBER DIES IN SERVICE, EMPLOYER AND EMPLOYEE CONTRIBUTIONS, AND THE COST OF LIVING ADJUSTMENT, FOR PURPOSES OF THE SOUTH CAROLINA POLICE OFFICERS RETIREMENT SYSTEM, SO AS TO REVISE AND PROVIDE ADDITIONAL DEFINITIONS, CORRECT CROSS REFERENCES, CLARIFY THAT A PREREQUISITE FOR ANY BENEFIT IS AT LEAST FIVE YEARS OF EARNED SERVICE, TO REVISE ELIGIBILITY REQUIREMENTS AND PAYMENT AMOUNTS REQUIRED TO ESTABLISH SERVICE CREDIT FOR SERVICE OUTSIDE OF THE VARIOUS STATE RETIREMENT SYSTEMS, AND CONFORM THE COST OF LIVING DEFINITION UNDER THIS SYSTEM TO THE DEFINITIONS USED IN THE SOUTH CAROLINA RETIREMENT SYSTEM, AND TO REPEAL SECTIONS 9-1-80, 9-1-440, 9-1-500, 9-1-850, 9-1-860, 9-1-1040, 9-1-1150, 9-1-1530, 9-1-1535, 9-1-1700, 9-1-1710, 9-1-1720, 9-1-1730, 9-1-1850, 9-1-1860, 9-11-55, 9-11-325, AND 9-11-330 ALL RELATING TO THE SOUTH CAROLINA RETIREMENT SYSTEM OR THE SOUTH CAROLINA POLICE OFFICERS RETIREMENT SYSTEM, AND ALL MADE OBSOLETE BY THE PROVISIONS OF THIS ACT.

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

SECTION 1. Section 9-1-10 of the 1976 Code, as last amended by Act 317 of 1998, is further amended to read:

"Section 9-1-10. The following words and phrases as used in this chapter, unless a different meaning is plainly required by the context, shall have the following meanings:

(1) "Retirement System" or "System" shall mean the South Carolina Retirement System established under SECTION 9-1-20;

(2) "Public school" shall mean any day school conducted within the State under the authority and supervision of a duly elected or appointed city, district or county school board;

(3) "Teacher" shall mean any teacher, helping teacher, attendance teacher, librarian, principal, supervisor, superintendent of public schools, superintendent of public instruction, county superintendent of education, person employed in the office of a county superintendent of education, bus driver and any other person employed in the public schools supported by the State, counties and school districts;

(4) "Employee" means:

(a) to the extent he is compensated by the 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, a 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 agent or officer of a county, municipality, or school district, or an agency or department thereof, which has been admitted to the system under the provisions of Section 9-1-470, to the extent he 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 organizations 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; and

(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, Department of Health and Human Services.

"Employee" does not include supreme and circuit court judges 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 those factors provided pursuant to Section 9-1-440;

(5) "Employer" means the State, a county board of education, a district board of trustees, a city board of education, the board of trustees or other managing board of a state-supported college or educational institution, or any other agency of the 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 thereof, which has been admitted to the system under the provisions of Section 9-1-470, a service organization referred to in paragraph (4) 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, Department of Health and Human Services;

(6) "Member" shall mean any teacher or employee included in the membership of the System as provided in Article 5 of this chapter and for the purpose of establishing additional service it shall mean in service;

(7) "Board" shall mean the State Budget and Control Board which shall act under the provisions of this chapter through its division of personnel administration;

(8) "Medical Board" shall mean the board of physicians provided for in SECTION 9-1-220;

(9) "Service" shall mean service as a teacher or employee rendered to and paid for by an employer;

(10) "Prior service" shall mean service rendered as a teacher or employee prior to the date of membership for which credit is allowable under Article 7 of this chapter;

(11) "Membership service" shall mean service as a teacher or employee rendered while a member of the System;

(12) "Creditable service" shall mean prior service plus membership service for which credit is allowable as provided in Article 7 of this chapter;

(13) "Beneficiary" shall mean any person in receipt of a pension, an annuity, a retirement allowance or other benefit provided under the System;

(14) "Regular interest" shall mean interest compounded annually at such rate as shall be determined by the Board in accordance with SECTION 9-1-280;

(15) "Accumulated contribution" shall mean the sum of all the amounts deducted from the compensation of a member and credited to his individual account in the employee annuity savings fund, together with regular interest thereon, as provided in Article 9 of this chapter;

(16) "Earnable compensation" shall mean the full rate of the compensation that would be payable to a teacher or employee if he worked for his 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;

(17) "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 prior to the expiration of his term of office;

(18) "Employee annuity" shall mean annual payments for life derived from the accumulated contributions of a member;

(19) "Employer annuity" shall mean annual payments for life derived from money provided by the employer;

(20) "Retirement allowance" shall mean the sum of the employer annuity and the employee annuity or any optional benefit payable in lieu thereof;

(21) "Retirement" shall mean the withdrawal from active service with a retirement allowance granted under the System;

(22) "Employee annuity reserve" shall mean the present value of all payments to be made on account of an employee annuity or benefit in lieu thereof, computed on the basis of such mortality tables as shall be adopted by the Board and regular interest;

(23) "Employer annuity reserve" shall mean the present value of all payments to be made on account of an employer annuity or benefit in lieu thereof, computed upon the basis of such mortality tables as shall be adopted by the Board and regular interest; and

(24) "Actuarial equivalent" shall mean a benefit of equal value when computed upon the basis of such mortality tables as shall be adopted by the Board and regular interest.

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 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.

(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, a 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 organizations 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, Department of Health and Human Services.

'Employee' does not include supreme and circuit court judges 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, Department of Health and Human Services.

(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) 'Medical board' means the board of physicians provided for in Section 9-1-220.

(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.

(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 2. Section 9-1-470 of the 1976 Code, as amended by Act 555 of 1988, is further amended to read:

"Section 9-1-470. Any A county, municipality, or other political subdivision of the State, any an agency or department of them, including a school board, any a service organization as defined in Section 9-1-10(4) 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, may, 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 3. Section 9-1-1140 of the 1976 Code, as last amended by Act 439 of 1988, is further amended to read:

"Section 9-1-1140. Subject to the approval of the Board, any member who is on leave of absence on account of military service or for any other purpose which might tend to increase the efficiency of the services of the member to his employer may make monthly contributions to the System on the basis of the earnable compensation of such member at the time such leave of absence was granted. Any person on leave of absence in the armed forces of the United States who would otherwise have qualified for prior service credit is entitled to prior service credit if he returns to the service of teaching or any other employment covered by or coming within the meaning hereof within a period of two years after he has been honorably discharged. Employees under current employment by the State are eligible to establish credit for previous employment with the regional councils of government if the period is not covered by another retirement plan and payment is rendered in accordance with Section 9-1-440.

A period of time up to one year for each pregnancy not to exceed a total of three years service credit may be established for maternity leave provided the member pays the full actuarial cost as determined by the board. However, the payment must not be less than twelve percent of the annual salary at the time of purchase or the average of the three highest consecutive fiscal years of salary at the time of purchase, whichever is greater, for a year of credit prorated for periods less than a year. To be eligible for maternity leave credit an employee must not be absent from work for a period greater than two years for each pregnancy.

Any member with two or more years of creditable service shall receive additional creditable service for the period of his military service at the rate of one year of military service for each one year of his creditable service excluding any period of creditable military service, as long as he was discharged or separated from the military service under conditions other than dishonorable, and as long as he pays to the system, by a single payment before his retirement or death or by another method of payment as may be prescribed from time to time by the board, all payments to the system he would have been required to make for the period to be so credited had he been employed in the position he held immediately before the commencement of his military leave during the period of the military service, together with the regular interest which would have been credited thereon from the date the contributions would have been made to the date of payment. In the case of a member whose military service was rendered before his employment by an employer the payments by the member, as described in the foregoing sentence, must be determined on the basis of his earnable compensation at the time he first became a member of the system. The required employer contribution must be assumed by the member's current employer. No member may receive credit for more than six years of military service. Active military duty performed subsequent to December 31, 1975, may not be considered creditable service. Active military duty includes service in the national guard; provided, however, that to establish creditable service for national guard service, the member must pay the actuarial cost as determined by the board, but the payment may not be less than twelve percent of the member's earnable compensation at the time of payment, or the average of the three highest consecutive fiscal years of compensation at the time of payment, whichever is greater, for each year of service prorated for periods of less than one year. The prohibition on duplication of benefits applicable to credit established for federal employment also applies to credit established for service in the national guard and national guard service may not be established for periods of service credited or creditable in any retirement system provided in this title. Any former employee of the United States employed in this State by an employer covered by the system, and who is currently a contributing member, may elect to receive prior service credit for service rendered as an employee of the United States upon his paying into the system the actuarial cost as determined by the board. The member payment may not be less than twelve percent of the earnable compensation, or the average of the three highest consecutive fiscal years of compensation at the time of payment, whichever is greater, for each year of service prorated for periods of less than one year. A member who elects to receive creditable service for federal employment may establish a portion of the service on a one-time basis. This service may not exceed the total creditable service, exclusive of federal service, which he would have if he remained in service until completion of the eligibility requirements for an unreduced service retirement allowance. In no event may any benefits payable under the system duplicate benefits being paid under any retirement system for the same period of service.

A member who leaves covered employment to attend undergraduate or graduate school and returns to covered employment within ninety days after the member's last date of enrollment may establish up to two years' retirement credit by paying the actuarial cost as determined by the board. However, the member contribution must not be less than twelve percent of current salary or the average of the three highest consecutive fiscal years, whichever is greater, for each year prorated for periods of less than a year.

Merchant marine seamen who served in active ocean-going service from December 7, 1941, to August 15, 1947, and civil service crew members aboard United States Army Transport Service and Naval Transportation Service vessels in ocean-going service in foreign waters during the same period may establish their period of service as creditable service in the manner that military service is established as creditable service pursuant to this section.

Previous service of a member as an employee of a redevelopment commission created by the governing body of a municipality in this State may be established as creditable service upon payment of an amount determined as provided pursuant to Section 9-1-440.

At retirement, after March 31, 1991, a member shall receive credit for not more than ninety days of his unused sick leave at no cost to the member. The leave must be credited at a rate where twenty days of unused sick leave equals one month of service. This additional service credit may not be used to qualify for retirement.

(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. 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 retirement plan.

(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. 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 retirement plan.

(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. 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 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. 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. Periods of less than a year must be prorated.

(F) 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.

(G) An active member establishing retirement credit pursuant to this chapter may establish that credit by means of payroll deducted installment payments. Interest must be paid on the unpaid balance of the amount due at the rate of the prime rate plus two percent a year.

(H) An employer, at its discretion, may pay to the system all or a portion of the cost for an employee's purchase of service credit under this chapter. Any amounts paid by the employer under this subsection for all purposes must be treated as employer contributions.

(I) Service credit purchased under this section, other than earned service previously withdrawn and reestablished, is not 'earned service' and does not count toward the required five or more years of earned service necessary for benefit eligibility.

(J) A member may purchase each type of service under this section once each fiscal year.

(K) The board shall promulgate regulations and prescribe rules and policies, as necessary, to implement the service purchase provisions of this chapter.

(L) At retirement, after March 31, 1991, a member shall receive credit for not more than ninety days of his unused sick leave from the member's last employer at no cost to the member. The leave must be credited at a rate where twenty days of unused sick leave equals one month of service. This additional service credit may not be used to qualify for retirement."

SECTION 4. 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 no more than ninety days prior six months before nor more than six months subsequent to ninety days after the execution and filing thereof of the application, he the member desires to be retired, if such the member at the time so specified for his the member's service retirement has: shall have attained the age of sixty years or shall have thirty or more years of creditable service and shall have separated from service and, if the time so specified is subsequent to the date of application, notwithstanding that, during such period of notification, he may have separated from service.

(1) five or more years of earned service;

(2) attained the age of sixty years or has thirty or more years of creditable service; and

(3) separated from service."

SECTION 5. Section 9-1-1515 of the 1976 Code, as last amended by Act 100 of 1999, is further amended to read:

"Section 9-1-1515. (A) In addition to other types of retirement provided by this chapter, a member may elect early retirement if the member:

(1) has five or more years of earned service;

(2) who has attained the age of fifty-five years; and who

(3) has at least twenty-five years of creditable service; and

(4) has separated from 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, the member's 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. However, a member's early retirement allowance is not reduced if the member pays into the system, in a lump sum payment before the member's retirement, an amount equal to twenty percent of the member's earnable compensation or the average of the member's twelve highest consecutive fiscal quarters of compensation at the time of payment, whichever is greater, prorated for periods less than one year for each year of creditable service less than thirty. The member's retirement must occur not more than ninety days after the date of the payment.

(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 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 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 6. The first paragraph of Section 9-1-1540 of the 1976 Code is amended to read:

"Upon the application of a member in service or of his employer, any a member in service on or after July 1, 1970, who has had five or more years of creditable earned service or any a contributing member who is disabled as a result of an injury arising out of and in the course of the performance of his duties regardless of length of membership on or after July 1, 1985, may be retired by the board not less than thirty days and not more than nine months next following the date of filing the application on a disability retirement allowance if the medical board, after a medical examination of the member, certifies that the member is mentally or physically incapacitated for the further performance of duty, that the incapacity is likely to be permanent, and that the member should be retired."

SECTION 7. Section 9-1-1550 of the 1976 Code, as last amended by Act 189 of 1989, is further amended by deleting subsection (C) which reads:

"(C) Any teacher or employee as defined in Section 9-1-10(3) and (4) who was a nonmember of the South Carolina Retirement System and who had attained age seventy-two prior to July 1, 1964, and who at the time of separation from service had rendered twenty or more years of employment which would otherwise have been considered creditable service under the terms of the South Carolina Retirement Act may establish such service and qualify for a retirement allowance from the retirement system provided he does so on or before December 31, 1965.

(1) The employee and employer contributions which would have been made had such service been rendered as a member shall be paid at the then prevailing rates paid by other employees and employers of the South Carolina Retirement System.

(2) The retirement allowance provided by this section shall become effective as of the first day of the month in which such service is established."

SECTION 8. The first paragraph of Section 9-1-1650 of the 1976 Code is amended to read:

"Should If a member cease ceases to be a teacher or employee except by death or retirement, he shall the member must be paid within six months after his the member's demand therefor for payment, but not less than ninety days after ceasing to be a teacher or employee, the sum of his the member's contributions and the accumulated regular interest thereon on the contributions. If such the member has five or more years of creditable earned service and elects, prior to before the time his the member's membership would otherwise terminate, elects to leave his these contributions in the system, he shall the member, unless and until such these contributions are paid to him as provided by this section prior to before the attainment of age sixty, remain remains a member of the system and shall be is entitled to receive a deferred retirement allowance commencing beginning at age sixty computed as a service retirement allowance in accordance with Section 9-1-1550. Provided, that the The employee annuity shall must be the actuarial equivalent at age sixty of the member's contributions with such the interest credits thereon on the contributions, if any, as shall be allowed by the board. Should If a member die dies before retirement, the amount of his the member's accumulated contributions shall must be paid to his the member's estate or to such the person as he shall have the member nominated by written designation, duly acknowledged and filed with the board."

SECTION 9. Section 9-1-1660 of the 1976 Code is amended to read:

"Section 9-1-1660. (1)(A) The person nominated by a member to receive the full amount of his the member's accumulated contributions in the event of his death if the member dies before retirement may, if such the member:

(1) has five or more years of earned service;

(2) dies while in service; and

(3) has either attained the age after the attainment of age sixty-five sixty years or after the accumulation of has accumulated fifteen years or more 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 the member's 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 years' credit is assumed to be sixty years of age.

(2)(B) Any A person otherwise eligible under subsection (1) (A) of this section to elect to receive an allowance who has attained age sixty-five or after the accumulation of thirty years of creditable service or after the attainment of age sixty with twenty 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, may make the election provided for in subsection (1) (A). The monthly payments under Option 2 to the person date from the time of the repayment of the accumulated contributions to the system."

SECTION 10. The first paragraph of Section 9-1-1910 of the 1976 Code is amended to read:

"Any person who has retired or may retire under the provisions of the South Carolina Retirement Act while in service as such teacher or employee, and A member with five or more years of earned service, eligible for service retirement, who has twenty or more years of creditable service shall must be paid from the general fund of the State, a monthly sum in addition to the retirement allowance he may receive under the act, due the member under this chapter sufficient to provide him the member a minimum eighty dollars per a month, plus one dollar per a month for each completed year of creditable service in excess of twenty years. Provided, however, that should such If the teacher or employee elect elects to receive a reduced retirement allowance as provided in the act this chapter, he shall the teacher or employee must be paid under the provisions of this section only such the amount as would be paid under the section had he the teacher or employee not elected such the optional allowance."

SECTION 11. Section 9-11-10 of the 1976 Code, as last amended by Act 72 of 1999, is further amended to read:

"Section 9-11-10. The following words and phrases as used in this article, unless a different meaning is plainly required by the context, shall have the following meanings:

(1) "System" shall mean the South Carolina Police Officers Retirement System.

(2) "State" shall mean the State of South Carolina.

(3) "Board" shall mean the State Budget and Control Board.

(4) "Medical board" shall mean the board provided for in SECTION 9-11-30(2).

(5) "Employer" shall mean (a) the State, (b) any political subdivision, agency or department of the State which employs police officers and which shall have been admitted to the System as provided in SECTION 9-11-40 and (c) any service organization, the membership of which is composed solely of persons eligible to be members as defined by this section, if the compensation received by the employees of such service organizations shall be provided from moneys paid by the members as dues, or otherwise, or from funds derived from public sources and if the contributions prescribed by this Title shall be paid from the funds of the service organization.

(6) "Police officer" means a person who receives his salary from an employer and who is:

(a) required by the terms of his employment, either by election or appointment, to give his time to the preservation of public order, the protection of life and property, and the detection of crimes in the State;

(b) an employee after January 1, 2000, of the South Carolina Department of Corrections or the Department of Juvenile Justice and by the terms of his employment is a peace officer as defined by Section 24-1-280.

Notwithstanding prior duties performed by a person who is a police officer as defined in this item, the provisions of Section 9-11-40(9) apply to a person who is or who becomes a member of the Police Officers Retirement System.

(7) "Member" shall mean any police officer included in the membership of the System, as provided in SECTION 9-11-40 and for the purpose of establishing additional service credit it shall mean in service.

(8) "Service" shall mean service as a police officer rendered to any employer.

(9) "Credited service" shall mean service for which credit is allowable as provided in SECTION 9-11-50.

(10) "Supplemental Allowance Program" shall mean the Supplemental Allowance Program established under the System as of July 1, 1966 and as in effect on June 30, 1974.

(11) "Class Two service" shall mean credited service subsequent to June 30, 1974 as a Class Two member, as defined in subsection (7) of SECTION 9-11-40, and credited service prior to July 1, 1974, or date of membership, if later, with respect to which contributions shall have been made by a member, or on his behalf, under the Supplemental Allowance Program or pursuant to subsection (2), (3), (4) or (10) of SECTION 9-11-210.

(12) "Class One service" shall mean credited service which is not Class Two service.

(13) "Compensation" shall mean the total remuneration paid to a police officer for service rendered to an employer for his 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.

(14) "Average final compensation after July 1, 1986" means the average annual 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 prior to the expiration of his term of office.

(15) "Retirement allowance" shall mean monthly payments for life under the System payable as provided in SECTION 9-11-160.

(16) "Beneficiary" shall mean any person in receipt of a retirement allowance or other benefit as provided by the System.

(17) "Other fund" shall mean (a) the South Carolina Retirement System or (b) the Police Insurance and Annuity Fund of the State of South Carolina.

(18) "Aggregate contributions" shall mean the sum of all the amounts deducted from the compensation of a member and credited to his individual account in the System, including any amounts transferred from another fund to the System as provided in SECTION 9-11-210(6).

(19) "Regular interest" shall mean interest compounded annually at such rate or rates as shall be determined for a particular purpose by the Board in accordance with SECTION 9-11-30.

(20) "Accumulated contributions" shall mean a member's aggregate contributions, together with regular interest thereon, including regular interest on contributions paid to the System by an employer in lieu of contributions by the member under the Supplemental Allowance Program on account of credited service rendered prior to his date of participation in said Program.

(21) "Aggregate additional contributions" shall mean the sum of all the contributions made by a member pursuant to SECTION 9-11-210 as in effect prior to July 1, 1974 and any amounts transferred from another fund which are treated as additional contributions pursuant to SECTION 9-11-210 as in effect prior to July 1, 1974 or SECTION 9-11-210(6) as amended as of said date.

(22) "Accumulated additional contributions" shall mean a member's aggregate additional contributions, together with regular interest thereon.

(23) "Actuarial equivalent" shall mean a benefit of equal value when computed on the basis of the tables and regular interest rate last adopted by the Board, as provided in SECTION 9-11-30.

(24) "Date of establishment" shall mean July 1, 1962.

As used in this chapter, unless a different meaning is plainly required by the context:

(1) 'Accumulated additional contributions' means a member's aggregate additional contributions, together with regular interest on the contributions.

(2) 'Accumulated contributions' means the sum of all the amounts deducted from the compensation of a member and credited to the member's individual account in the employee annuity savings fund, together with regular interest on the account, as provided in this chapter.

(3) 'Active member' means a member who is compensated by an employer participating in the system and who is making regular retirement contributions to the system.

(4) 'Actuarial equivalent' means a benefit of equal value when computed on the basis of the tables and regular interest rate last adopted by the board, as provided in Section 9-11-30.

(5) 'Aggregate additional contributions' means the sum of all the contributions made by a member pursuant to Section 9-11-210 in effect before July 1, 1974, and any amounts transferred from another fund which are treated as additional contributions pursuant to Section 9-11-210 in effect before July 1, 1974, or Section 9-11-210(6) as amended as of that date.

(6) 'Aggregate contributions' means the sum of all the amounts deducted from the compensation of a member and credited to the member's individual account in the system, including any amounts transferred from another fund to the system as provided in Section 9-11-210(6).

(7) 'Average final compensation after July 1, 1986' means the average annual compensation of a member during the twelve consecutive quarters of the member's creditable service on which regular contributions as a member were made to the system producing the highest 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 prior to the expiration of his term of office.

(8) 'Beneficiary' means a person in receipt of a retirement allowance or other benefit provided by the system.

(9) 'Board' means the State Budget and Control Board acting through its Division of Retirement Systems.

(10) 'Class one service' means credited service which is not class two service.

(11) 'Class two service' means credited service after June 30, 1974, as a class two member, as defined in subsection (7) of Section 9-11-40, and credited service before July 1, 1974, or date of membership, if later, with respect to which contributions have been made by a member, or on the member's behalf, under the supplemental allowance program or pursuant to subsection (2), (3), or (10) of Section 9-11-210.

(12) 'Compensation' means the total remuneration paid to a police officer for service rendered to an employer for his 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.

(13) 'Credited service' means a member's earned service and purchased service.

(14) 'Date of establishment' means July 1, 1962.

(15) 'Earned service' means the paid employment of a member of the system with an employer participating in the system where the member makes regular retirement contributions to the system.

(16) '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.

(17) 'Employer' means:

(a) the State;

(b) a political subdivision, agency, or department of the State which employs police officers and which has been admitted to the system as provided in Section 9-11-40; and

(c) a service organization, the membership of which is composed solely of persons eligible to be members 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 contributions prescribed by this chapter are to be paid from the funds of the service organization.

(18) 'Medical board' means the board provided for in Section 9-11-30(2).

(19) 'Member' means a person included in the membership of the system, as provided in this chapter.

(20) '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.

(21) 'Nonqualified service' means purchased service other than public service, educational service, military service, leave of absence, and reestablishment of withdrawals.

(22) 'Other fund' means:

(a) the South Carolina Retirement System; or

(b) the Police Insurance and Annuity Fund of the State of South Carolina.

(23) 'Police officer' means a person who receives his salary from an employer and who is:

(a) required by the terms of his employment, either by election or appointment, to give his time to the preservation of public order, the protection of life and property, and the detection of crimes in this State; or

(b) an employee after January 1, 2000, of the South Carolina Department of Corrections or the South Carolina Department of Juvenile Justice who, by the terms of his employment, is a peace officer as defined by Section 24-1-280.

Notwithstanding prior duties performed by a person who is a police officer as defined in this item, the provisions of Section 9-11-40(9) apply to a person who is or who becomes a member of the Police Officers Retirement System.

(24) 'Public Service' means service as an employee of the government of the United States, any state or political subdivision of the United States, or any agency or instrumentality of any of these. The term 'public service' does not include 'educational service' or 'military service' as defined in this section.

(25) 'Purchased service' means service credit purchased by an active member while an employee of an employer participating in the system.

(26) 'Regular interest' means interest compounded annually at the rate or rates determined for a particular purpose by the board in accordance with Section 9-11-30.

(27) 'Retirement allowance' means monthly payments for life under the system payable as provided in Section 9-11-160.

(28) 'State' means the State of South Carolina.

(29) 'Supplemental allowance program' means the supplemental allowance program established under the system as of July 1, 1966, and as in effect on June 30, 1974.

(30) 'System' means the South Carolina Police Officers Retirement System."

SECTION 12. A. Items (a) and (d) of Section 9-11-40(1) of the 1976 Code are amended to read:

"(a) Any A county, municipality, or other political subdivision of the State, and any an agency or department thereof of a political subdivision or any a service organization referred to in item (5) of Section 9-11-10 9-11-10(17)(c) may, in its discretion, may become an employer by applying to the board for admission to the system and by complying with the requirements hereof of this section and the rules and regulations of the board. Such The application shall must set forth the requested date of admission, which shall must be the January first, or the April first, or the July first, or the October first next following receipt by the board of such the application, except that in the case of any applications so received prior to before January 1, 1963, the requested date of admission may be July 1, 1962.

(d) Any An employer whose requested date of admission is on or after July 1, 1974, shall agree to make contributions on account of all service prior to before the date of admission rendered by members in its employ who make contributions with respect to such service as provided in Section 9-11-210(4)."

B. Section 9-11-40(4) of the 1976 Code is amended to read:

"(4) All persons who become employed as police officers by the State or other employer after the employer's date of admission to the system under the provisions of this section shall must become members, as a condition of their employment.

Notwithstanding the foregoing provisions of this subsection, no person shall become a member on or after July 1, 1963 unless his employer certifies to the system that his service as a police officer will require requires at least one thousand six hundred hours per a year of active duty and that his the person's salary for such the service will be is at least two thousand dollars per a year. If in any year subsequent to such after this certification the member does not render at least one thousand six hundred hours of active duty as a police officer, or if he the member does not receive at least two thousand dollars in salary, his membership shall cease ceases and the provisions of Sections 9-11-50(2) and Section 9-11-100 shall apply."

C. The fifth paragraph of Section 9-11-40(10) of the 1976 Code is amended to read:

"Notwithstanding the foregoing provisions of this subsection, no fireman shall become a member on or after July 1, 1976, unless his the member's employer certifies to the system that his service as a fireman will require requires at least one thousand, six hundred hours per a year of active duty and that his the member's salary for such the service will be is at least two thousand dollars per a year. If in any year subsequent to such after this certification the member does not render at least one thousand, six hundred hours of active duty as a fireman, or if he the member does not receive at least two thousand dollars in salary, his membership shall cease ceases and the provisions of Sections 9-11-50(2) and Section 9-11-100 of the 1976 Code shall apply."

SECTION 13. Section 9-11-50 of the 1976 Code, as last amended by Act 439 of 1998, is further amended to read:

"Section 9-11-50. (1) The credited service of a member shall include all service as a police officer rendered to an employer since he last became a member and in respect of which he made contributions to the System. It shall also include, in the case of a member (a) who became such on or before June 30, 1963, or who became such as of July 1, 1962 pursuant to subsection (1) (b) or (1) (c) of SECTION 9-11-40, and (b) who remained a member continuously thereafter until his death or his retirement under the System and (c) who was, immediately prior to his becoming a member, a participant in another fund, service which was credited to him under such other fund; provided that within two months of the date of his membership he shall have caused the amount of his full contributions made under such other fund in respect of such service to be transferred to the System. In addition, in the case of any other member who becomes a member when first eligible and continues as a member until his death or his retirement, credited service shall also include all service prior to his date of membership for which contributions are made as provided in SECTION 9-11-210(4) or SECTION 9-11-210(10) and SECTION 9-11-220(2).

(2) When membership ceases for any reason other than death or retirement, the service credited to the member shall be cancelled and, should the police officer again become a member, he shall enter the System as a police officer not entitled to credit for previous service, unless he repays his accumulated contributions previously withdrawn as provided in subsection (3) of this section.

(3) Any person employed as a police officer whose membership in the System was contingent on his own election and who elected not to become a member of the System may apply for and be admitted to membership. Anything herein contained to the contrary notwithstanding, the credited service of any such person shall include service rendered to an employer since he was first eligible to become a member; provided that he shall pay to the System, by a single payment prior to his retirement or death, the contributions specified in SECTION 9-11-210(4) with respect to the period of service since he first became eligible for membership. Any such member who makes such payment to establish credit for such service may also receive credit for service prior to his employer's date of participation in the System by making contributions pursuant to SECTION 9-11-210(4) on account of such service. Any former member who withdrew his contributions and has again become a member of the System may have the service credited to him under the System at the time he withdrew his contributions restored to him, provided he pays to the System, by a single payment prior to his retirement or death, the amount of the contributions previously withdrawn, together with the interest which would have been credited thereon had such contributions remained in the System to the date of his payment of such amount to the System.

(4) Any member with two or more years of credited service shall receive additional credited service for the period of his military service at the rate of one year of military service for each one year of his credited service excluding any period of credited military service, as long as he was discharged or separated from the military service under conditions other than dishonorable, and as long as he pays to the system, by a single payment before his retirement or death or by another method of payment as may be prescribed from time to time by the board, all payments to the system he would have been required to make for the period to be so credited had he been employed in the position he held immediately before the commencement of his military leave during the period of the military service, together with the regular interest which would have been credited thereon from the date the contributions would have been made to the date of payment. In the case of a member whose military service was rendered before his employment by an employer, the payments by the member, as described in the foregoing sentence, must be determined on the basis of his compensation at the time he first became a member of the system. The required employer contribution must be assumed by the member's current employer. However, no member may receive credit for more than six years of military service. Active military duty performed subsequent to December 31, 1975, may not be considered creditable service. Active military duty includes service in the national guard; provided, however, that to establish creditable service for national guard service, the member must pay the actuarial cost as determined by the board, but the payment may not be less than twelve percent of the member's earnable compensation at the time of payment, or the average of the three highest consecutive fiscal years of compensation at the time of payment, whichever is greater, for each year of service prorated for periods of less than one year. The prohibition on duplication of benefits applicable to credit established for federal employment as provided in subsection (6) of this section also applies to credit established for service in the national guard and national guard service may not be established for periods of service credited or creditable in any retirement system under this title.

(5) A period of time up to one year for each pregnancy not to exceed a total of three years of service credit may be established for maternity leave if the member pays the full actuarial cost as determined by the board. The payment must not be less than twelve percent of the annual salary at the time of purchase or the average of the three highest consecutive fiscal years of salary at the time of purchase, whichever is greater, for a year of credit prorated for periods less than a year. To be eligible for maternity leave credit an employee must not be absent from work for a period greater than two years for each pregnancy.

(6)(a) A former employee of the United States employed in this State by an employer covered by the system and who is currently a contributing member, may elect to receive prior service credit for service rendered as an employee of the United States upon his paying into the system the actuarial cost as determined by the board. The member payment must not be less than twelve percent of the earnable compensation, or the average of the three highest consecutive fiscal years of compensation at the time of payment, whichever is greater, for each year of service prorated for periods of less than one year. A member who elects to receive creditable service for federal employment may establish a portion of the service on a one-time basis. This service may not exceed the total creditable service, exclusive of federal service, which he would have if he remained in service until completion of the eligibility requirements for an unreduced service retirement allowance. In no event shall any benefits payable under the system duplicate benefits being paid under any retirement system for the same period of service.

(b) Merchant marine seamen who served in active ocean-going service from December 7, 1941, to August 15, 1947, and civil service crew members aboard United States Army Transport Service and Naval Transportation Service vessels in ocean-going service in foreign waters during the same period may establish their period of service as creditable service in the manner that military service is established as creditable service pursuant to this section.

(7) At retirement, after March 31, 1991, a member shall receive service credit for not more than ninety days of his unused sick leave at no cost to the member. The leave must be credited at a rate where twenty days of unused sick leave equals one month of service. This additional service credit may not be used to qualify for retirement.

(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. 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 retirement plan.

(B) An active member may establish service credit for any period of paid educational 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. 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 retirement plan.

(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. 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 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. 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. Periods of less than a year must be prorated.

(F) 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.

(G) An active member establishing retirement credit pursuant to this chapter may establish that credit by means of payroll deducted installment payments. Interest must be paid on the unpaid balance of the amount due at the rate of the prime rate plus two percent a year.

(H) An employer, at its discretion, may pay to the system all or a portion of the cost for an employee's purchase of service credit under this chapter. Amounts paid by the employer under this subsection for all purposes must be treated as employer contributions.

(I) Service credit purchased under this section, other than earned service previously withdrawn and reestablished, is not 'earned service' and does not count toward the required five or more years of earned service necessary for benefit eligibility.

(J) A member may purchase each type of service under this section once each fiscal year.

(K) At retirement, after March 31, 1991, a member shall receive credit for not more than ninety days of his unused sick leave from the member's last employer at no cost to the member. The leave must be credited at a rate where twenty days of unused sick leave equals one month of service. This additional service credit may not be used to qualify for retirement.

(L) The board shall promulgate regulations, and prescribe rules and policies, as necessary, to implement the service purchase provisions of this chapter."

SECTION 14. Subsections (1) and (3) of Section 9-11-60 of the 1976 Code, as last amended by Act 424 of 1988, are further amended to read:

"(1) A member may retire upon written application to the board system setting forth at what time, not no more than ninety days six months before nor more than six months subsequent to ninety days after the execution and filing of the application, he the member desires to be retired, if the member at the time specified for his the member's service retirement has:

(a) five or more years of earned service;

(b) attained the age of fifty-five years; and completed five or more years of credited service and has

(c) separated from service and, if the time specified is subsequent to the date of application, notwithstanding that, during the period of notification, he may have separated from service.

(3) Reserved. Any member who has completed five or more years of credited service but has not attained age fifty-five, upon written application to the governing or administering board of his retirement system, may retire on an early retirement allowance commencing upon his attainment of age fifty-five, as follows:

(a) If the member is less than fifty-five years of age and has at least twenty-five years of creditable service, he may elect to receive up to five years of additional service credit as though the additional service credit were rendered by him as an employee or member upon his paying into his retirement system the actuarial cost as determined by regulation promulgated by the governing or administering board of his retirement system, provided the actuarial cost is determined on the basis of current salary or the highest fiscal year salary in the work career, whichever is greater.

(b) 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, and any service credit purchased must qualify the member for retirement and the member must retire within ninety days subsequent to the purchase."

SECTION 15. Section 9-11-70(1) of the 1976 Code is amended to read:

"(1) Any A member in service who has completed five or more years of credited earned service but has not attained age fifty-five may, upon written application to the board, retire on an early retirement allowance commencing upon his attainment of beginning when the member attains age fifty-five."

SECTION 16. The first paragraph of Section 9-11-80(1) of the 1976 Code is amended to read:

"Upon On the application of a member in service or of his the member's employer, any a member who has five or more completed years of credited earned service or any contributing member who is disabled as a result of an injury arising out of and in the course of the performance of his the member's duties regardless of length of membership may be retired by the retirement board not less than thirty days and not more than nine months next following the date of filing the application on a disability retirement allowance if the medical board, after a medical examination of the member, certifies that the member is mentally or physically incapacitated for the further performance of duty, that the incapacity is likely to be permanent, and that the member should be retired."

SECTION 17. Section 9-11-130(1) of the 1976 Code is amended to read:

"(1) The person nominated by a member, pursuant to Section 9-11-110, to receive a lump sum amount in the event of his death if the member dies before retirement may, if the member: (a) has five or more years of earned service; (b) dies in service; and (c) has either attained age fifty-five or has accumulated dies after the attainment of age fifty-five or after the accumulation of fifteen years of creditable service and death occurs in service, elect to receive in lieu of the lump sum amount otherwise payable under item (a) of subsection (1) of Section 9-11-110(1)(a) 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 1 under Section 9-11-150. For purposes of the benefit calculation, a member under age fifty with less than thirty years' credit is assumed to be fifty years of age."

SECTION 18. Section 9-11-210(4) of the 1976 Code, as amended by Act 420 of 1994, is further amended to read:

"(4) A member who has rendered service before his date of membership which is not otherwise credited under the system may elect by written notice filed with the board at any time before retirement to establish credit for the service as Class One service in the case of a Class One member or as Class Two service in the case of a Class Two member. A member who makes this election shall make a special contribution to the system before retirement, determined as follows:

(a) In the case of a Class One member, the amount which would have resulted if the member had contributed twenty-one dollars during each month of the service for which credit is to be established and such contributions were accumulated at regular interest to the date of payment; or

(b) In the case of a Class Two member, six and one-half percent of the member's monthly rate of compensation at the time the contribution is made multiplied by the number of months of service for which credit is to be established. Reserved."

SECTION 19. Section 9-11-220(2)(a) of the 1976 Code is amended to read:

"(a) Reserved. If the special contribution is made pursuant to Section 9-11-210(2), the employer contribution shall be equal to such special contribution."

SECTION 20. The fourth paragraph of Section 9-11-310 of the 1976 Code is amended to read:

"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 21. Sections 9-1-80, 9-1-440, 9-1-500, 9-1-850, 9-1-860, 9-1-1040, 9-1-1150, 9-1-1530, 9-1-1535, 9-1-1700, 9-1-1710, 9-1-1720, 9-1-1730, 9-1-1850, 9-1-1860, 9-11-55, 9-11-325, and 9-11-330, all of the 1976 Code are repealed.

SECTION 22. This act takes effect July 1, 2001.

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