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TO ESTABLISH THE STATE RETIREMENT PLAN FOR NONSTATE EMPLOYEES AND TO PROVIDE THAT EVERY RESIDENT OF SOUTH CAROLINA WHO FILES AN INCOME TAX RETURN MAY PARTICIPATE IN THE PLAN; TO DIRECT THE STATE RETIREMENT SYSTEM TO ADMINISTER THE FUND, TO PROHIBIT COMINGLING OF THE FUNDS IN THE STATE EMPLOYEES RETIREMENT FUND WITH THE NONEMPLOYEE RETIREMENT FUNDS, AND TO REQUIRE BOTH SYSTEMS TO OPERATE INDEPENDENTLY OF EACH OTHER; TO REQUIRE EACH PERSON PARTICIPATING IN THE PLAN TO CONTRIBUTE TEN PERCENT OF THEIR INCOME, AS SHOWN ON THEIR W-2 FORM, WHICH WOULD BE WITHHELD FROM THE PERSON'S PAY CHECK; TO PROVIDE THAT SUCH CONTRIBUTIONS ARE TAX DEDUCTIBLE BUT NOT TAX DEDUCTIBLE FROM THEIR FEDERAL RETURN; TO AUTHORIZE PARTICIPANTS TO OPT OUT OR IN FOR ONE CALENDAR YEAR AT A TIME AND TO PROVIDE THAT A PARTICIPANT COULD NOT WITHDRAW FROM THE PLAN UNTIL THEY WERE ENTITLED TO RECEIVE SOCIAL SECURITY; AND TO PROVIDE THAT THE SAME FEDERAL EARNING LIMITS APPLY TO PARTICIPANTS BETWEEN THE AGES OF SIXTY-TWO AND SIXTY-FIVE.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. (A) There is established the State Retirement Plan for Nonstate Employees, which must be administered by the State Retirement System. Funds in this plan must not be comingled with funds in the State Retirement System, and both systems must operate independently of each other. Every resident of South Carolina who files an income tax return may participate in the plan by contributing to the plan ten percent of their income, as shown on their W-2 form, which must be withheld from the individual's paycheck. These contributions are tax deductible but not tax deductible from their federal return.
(B) Participants may opt out or in for one calendar year at a time and may not withdraw from the plan until they are entitled to receive Social Security retirement benefits. The same federal earning limits apply to participants in the plan between the ages of sixty-two and sixty-five.
SECTION 2. This act takes effect upon approval by the Governor.
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