Bill 476

                    Current Status

Bill Number:               476
Ratification Number:       311
Act Number:                309
Introducing Body:          Senate
Subject:                   Assets of the post-retirement increase
                           special fund transferred to the employer
                           annuity accumulation fund

(A309, R311, S476)

AN ACT TO AMEND SECTIONS 9-1-1010, 9-1-1050, 9-1-1100, 9-1-1110, 9-1-1130, 9-1-1170 AND 9-1-1810, ALL AS AMENDED, AND 9-1-1830, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE SOUTH CAROLINA RETIREMENT SYSTEM, SO AS TO TRANSFER THE ASSETS OF THE POST-RETIREMENT INCREASE SPECIAL FUND TO THE EMPLOYER ANNUITY ACCUMULATION FUND; AND TO REPEAL SECTION 9-1-1820 RELATING TO THE POST-RETIREMENT INCREASE SPECIAL FUND.

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

Assets of System

SECTION 1. Section 9-1-1010 of the 1976 Code, as last amended by Act 407 of 1980, is further amended to read:

"Section 9-1-1010. All of the assets of the System are credited, according to the purpose for which they are held, to two bookkeeping accounts, hereinafter referred to as 'funds'. The accounts are referred to as the employee annuity savings fund and the employer annuity accumulation fund."

Reserves

SECTION 2. Item (2) of Section 9-1-1050 of the 1976 Code, as last amended by Act 407 of 1980, is further amended to read:

"(2) In which must be recorded all reserves for the payment of all employer annuities and other benefits payable from contributions made by employers and against which is charged all employer annuities and other benefits on account of members with prior service credit; and".

Benefits paid from employer annuity

accumulation fund

SECTION 3. Section 9-1-1100 of the 1976 Code, as last amended by Act 407 of 1980, is further amended to read:

"Section 9-1-1100. All employer annuities, and benefits in lieu thereof, must be paid from the employer annuity accumulation fund."

Maintenance of reserves

SECTION 4. Section 9-1-1110 of the 1976 Code, as last amended by Act 407 of 1980, is further amended to read:

"Section 9-1-1110. The maintenance of employee annuity reserves and employer annuity reserves as provided for hereunder and regular interest creditable to the various funds as provided in this article and the payment of all annuities, retirement allowances, refunds, and other benefits granted hereunder, are made obligations of the employer annuity accumulation fund. All income, interest, and dividends derived from deposits and investments authorized hereunder must be used for payment of the obligations of the fund."

Earned interest and dividends

SECTION 5. Section 9-1-1130 of the 1976 Code, as last amended by Act 407 of 1980, is further amended to read:

"Section 9-1-1130. All interest and dividends earned on the invested assets of the System must be credited to the employer annuity accumulation fund. The Board shall credit regular interest to the individual accounts of members in the employee annuity savings fund and shall transfer the amounts of the credits from the employer annuity accumulation fund. Any interest credited to the individual account of a member in the employee annuity savings fund and not payable to him under the provisions of Section

9-1-1650 upon his ceasing to be a teacher or employee except by death or retirement must be transferred from the fund to the employer annuity accumulation fund."

Annual statement required

SECTION 6. Item (1) of Section 9-1-1170 of the 1976 Code, as last amended by Act 407 of 1980, is further amended to read:

"(1) Upon the basis of each actuarial valuation provided herein the Board shall annually prepare and certify to each employer a statement of the total amount payable by the employer for the ensuing fiscal year to the employer annuity accumulation fund and this amount must be handled and disbursed in accordance with the usual appropriations;".

Consumer Price Index to be used

SECTION 7. Section 9-1-1810 of the 1976 Code, as last amended by Act 382 of 1984, is further 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 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 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 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 effective only if the additional liabilities on account of the increase in allowances do not require an increase in the total employer rate of contribution. Any increase in allowance granted hereunder 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."

Contributions

SECTION 8. Section 9-1-1830 of the 1976 Code, as added by Act 407 of 1980, is amended to read:

"Section 9-1-1830. Starting July 1, 1981, there must be paid to the System, and credited to the post-retirement increase special fund, contributions by the employers in an amount equal to two-tenths of one percent of the earnable compensation of each member employed by each employer. In addition, the State Budget and Control Board shall, on the recommendation

of the actuary, transfer a portion of the monies as are received pursuant to Section 9-1-1050 that are available due to actuarial gains in the System if the transfers do not adversely affect the funding status of the System. Starting July 1, 1986, all contributions previously credited to the post-retirement increase special fund must be diverted and credited to the employer annuity accumulation fund."

Assets of fund

SECTION 9. Any assets of the post-retirement increase special fund remaining as of

June 30, 1986, are to be transferred to the employer annuity accumulation fund.

Repeal

SECTION 10. Section 9-1-1820 of the 1976 Code is repealed.

Time effective

SECTION 11. This act shall take effect upon approval by the Governor.