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H. 4719
STATUS INFORMATION
General Bill
Sponsors: Rep. Cooper
Document Path: l:\council\bills\ggs\22435htc04.doc
Introduced in the House on February 10, 2004
Currently residing in the House Committee on Ways and Means
Summary: TERI program, unused leave
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 2/10/2004 House Introduced and read first time HJ-7 2/10/2004 House Referred to Committee on Ways and Means HJ-8
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND SECTION 8-11-620, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO LUMP SUM PAYMENTS FOR UNUSED ANNUAL LEAVE TO STATE EMPLOYEES ON TERMINATION OR RETIREMENT FROM STATE EMPLOYMENT, SO AS TO POSTPONE THE PAYMENT FOR EMPLOYEES PARTICIPATING IN THE TEACHER AND EMPLOYEE RETENTION INCENTIVE PROGRAM (TERI) UNTIL THE EMPLOYEE LEAVES STATE EMPLOYMENT, AND TO AMEND SECTION 9-1-2210, RELATING TO THE TERI PROGRAM, SO AS TO PROVIDE THAT UNUSED LEAVE IS NOT ADDED IN THE CALCULATION OF THE AVERAGE FINAL COMPENSATION USED IN THE DETERMINATION OF THE RETIREMENT BENEFITS OF AN EMPLOYEE ENTERING INTO THE TERI PROGRAM, TO PROVIDE FOR THE INCLUSION OF THE PAYMENT OF THE ALLOWABLE AMOUNT OF THE UNUSED LEAVE IN A RECALCULATION OF AVERAGE FINAL COMPENSATION AND A REDETERMINATION OF THE BENEFIT AMOUNT WHEN THE TERI PROGRAM PARTICIPANT TERMINATES TERI PROGRAM PARTICIPATION, AND TO PROVIDE FOR A SIMILAR RECALCULATION AND REDETERMINATION FOR A BENEFIT PAID TO THE SURVIVOR OF A DECEASED TERI PARTICIPANT WHEN THAT PARTICIPANT HAD ELECTED A SURVIVOR BENEFIT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 8-11-620(A) of the 1976 Code, as amended by Act 356 of 2002, is further amended to read:
"(A)(1) Upon termination from state employment, an employee may take both annual leave and a lump-sum payment for unused leave, but in no event shall such this combination may not exceed forty-five days in a calendar year except as provided for in Section 8-11-610. If an employee dies, his the employee's legal representative shall be is entitled to a lump-sum payment for his the employee's unused leave, not to exceed forty-five working days, except as provided for in Section 8-11-610.
(2) Upon retirement from state employment or upon the death of an employee if the member does not elect to participate in the Teacher and Employee Retention Incentive Program, a lump-sum payment will be made must be paid for unused leave, not to exceed forty-five days, unless a higher maximum is approved under the provisions of pursuant to Section 8-11-610, and without regard to the earned leave taken during the calendar year in which the employee retires.
(3) Upon retirement from state employment, if the employee participates in the Teacher and Employee Retention Incentive Program, the employee shall not receive payment for unused annual leave until the employee terminates from state employment and ends participation in the Teacher and Employee Retention Incentive Program. Upon termination of state employment and participation in the Teacher and Employee Retention Incentive Program, a lump-sum must be paid for unused leave, not to exceed forty-five days, unless a higher maximum is approved pursuant to Section 8-11-610, and without regard to the earned leave taken during the calendar year in which the employee retires."
SECTION 2. Section 9-1-2210 of the 1976 Code, as added by Act 1 of 2001, is amended to read:
"Section 9-1-2210. (A) An active contributing member who is eligible for service retirement under this chapter and complies with the requirements of this article may elect to participate in the Teacher and Employee Retention Incentive Program (program). A member electing to participate in the program retires for purposes of the system, and the member's normal retirement benefit is calculated on the basis of the member's average final compensation and service credit at the time the program period begins. The program participant shall agree to continue employment with an employer participating in the system for a program period, not to exceed five years. The member shall notify the system before the beginning of the program period. Participation in the program does not guarantee employment for the specified program period.
(B) After June 30, 2004, and notwithstanding the provisions of Section 9-1-10(4), a payment for unused annual leave is not included in calculating a member's deferred program benefit during the program period. The member's average final compensation for the purpose of calculating the deferred program retirement benefit must be solely the average of the member's highest twelve consecutive quarters of earnable compensation at the time the member enters the program. During the specified program period, receipt of the member's normal retirement benefit is deferred. The member's deferred monthly program benefit must be placed in the system's trust fund on behalf of the member. No interest is paid on the member's deferred monthly program benefit placed in the system's trust fund during the specified program period.
(C) During the specified program period, the employer shall pay to the system the employer contribution for active members prescribed by law with respect to any program participant it employs, regardless of whether the program participant is a full-time or part-time employee, or a temporary or permanent employee. If an employer who is obligated to the system pursuant to this subsection fails to pay the amount due, as determined by the system, the amount must be deducted from any funds payable to the employer by the State.
(D) A program participant is retired from the retirement system as of the beginning of the program period. A program participant makes no further employee contributions to the system except for contributions on payments for unused annual leave made at the time of termination from the program or upon member's death, accrues no service credit during the program period, and is not eligible to receive group life insurance benefits or disability retirement benefits. Accrued annual leave and sick leave used in any manner in the calculation of the program participant's retirement benefit is deducted from the amount of such sick leave accrued by the participant.
(E) A program participant is retired for retirement benefit purposes only. For employment purposes, a program participant is considered to be an active employee, retaining all other rights and benefits of an active employee and is not subject to the earnings limitation of Section 9-1-1790 during the program period.
(F) Upon termination of employment either during or at the end of the program period, the member must receive the balance in the member's program account by electing one of the following distribution alternatives:
(1) a lump-sum distribution, paying appropriate taxes; or
(2) to the extent permitted under law, a tax sheltered rollover into an eligible plan.
For members who began participation in the program before July 1, 2004, the member also must receive the previously determined normal retirement benefits based upon the member's average final compensation and service credit at the time the program period began, plus any applicable cost of living increases declared during the program period. The program participant is thereafter subject to the earnings limitation of Section 9-1-1790.
Upon termination of employment of members who began participation in the program after June 30, 2004, the Retirement Systems shall recalculate the average final compensation of the member to determine the benefit the member receives after participation in the program. The average final compensation calculated at the commencement of the program must be increased by: an amount up to and including forty-five days' termination pay for unused annual leave received by the member at termination of employment, divided by three. The member's benefit after participation in the program must be calculated in accordance with Section 9-1-1550, utilizing the recalculated average final compensation determined in this subsection, and the member's service credit, including sick leave, as of the date member began participation in the program, plus any cost of living increases declared during the program period with respect to the amount of the member's deferred program benefit. The program participant is thereafter subject to the earnings limitation of Section 9-1-1790.
(G) If a program participant dies during the specified program period, the member's designated beneficiary must receive the balance in the member's program account by electing one of the following distribution alternatives:
(1) a lump-sum distribution, paying appropriate taxes; or
(2) to the extent permitted under law, a tax sheltered rollover into an eligible plan.
In accordance with the form of system benefit selected by the member at the time the program commenced, the member's designated beneficiary must receive either a survivor benefit or a refund of contributions from the member's system account.
If a program participant who began participation in the program before July 1, 2004, elected either Option B or Option C under Section 9-1-1620, the average final compensation calculated when the member commenced the program must be used in determining the survivor benefit.
If a program participant who began participation in the program after June 30, 2004 elected a survivor option, then the survivor shall receive a survivor benefit based on a recalculated average final compensation. The average final compensation calculated at the commencement of the program must be increased by: an amount up to and including forty-five days' termination pay for unused annual leave received by the member's legal representative at the member's death, divided by three. The survivor benefit must be calculated in accordance with Section 9-1-1550, utilizing the recalculated average final compensation determined in this subsection, and the member's service credit, including sick leave, as of the date member began participation in the program, plus any cost of living increases declared during the program period with respect to the amount of the member's deferred program benefit.
(H) If a program participant fails to terminate employment with an employer participating in the retirement system within one month after the end of the specified program period, the member must receive the previously determined normal retirement benefits based upon the member's average final compensation and service credit at the time the program began, plus any applicable cost of living increases declared during the program period. The program participant is thereafter subject to the earnings limitation of Section 9-1-1790. The program participant also must receive the balance in the member's program account by selecting one of the following alternatives:
(1) a lump-sum distribution, paying appropriate taxes; or
(2) to the extent permitted under law, a tax sheltered rollover into an eligible plan. A program participant must terminate employment no later than the fifth annual anniversary of the date the member commenced participation in the program.
(I) A member is not eligible to participate in the program if the member has participated previously in and received a benefit under this program or any other state retirement system."
SECTION 3. This act takes effect upon approval by the Governor.
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