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Current Status Bill Number:View additional legislative information at the LPITS web site.484 Ratification Number:55 Act Number:54 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:20010322 Primary Sponsor:Finance Committee SF 06 All Sponsors:Finance Committee Drafted Document Number:l:\council\bills\bbm\10122htc01.doc Date Bill Passed both Bodies:20010425 Date of Last Amendment:20010425 Governor's Action:S Date of Governor's Action:20010529 Subject:Optional Retirement Program for Teachers, etc.; extended to public state employees including college, universities, tech History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ ------ 20010611 Act No. A54 ------ 20010529 Signed by Governor ------ 20010523 Ratified R55 Senate 20010425 Ordered enrolled for ratification House 20010425 Receded from its amendments Senate 20010424 Non-concurrence in House amendment House 20010419 Read third time, returned to Senate with amendment House 20010418 Amended, read second time House 20010411 Debate adjourned until Tuesday, 20010417 House 20010405 Introduced, read first time, placed on Calendar without reference Senate 20010404 Read third time, sent to House Senate 20010327 Read second time, notice of general amendments ------ 20010326 Scrivener's error corrected Senate 20010322 Introduced, read first time, placed on Calendar without reference Versions of This Bill Revised on March 22, 2001 - Word format Revised on March 26, 2001 - Word format Revised on April 5, 2001 - Word format Revised on April 18, 2001 - Word format
(A54, R55, S484)
AN ACT TO AMEND SECTION 9-17-40, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO EMPLOYER CONTRIBUTIONS UNDER THE OPTIONAL RETIREMENT PROGRAM FOR PUBLICLY-SUPPORTED FOUR-YEAR AND POSTGRADUATE INSTITUTIONS OF HIGHER EDUCATION, SO AS TO INCREASE THE MINIMUM CONTRIBUTION FROM FOUR AND ONE QUARTER PERCENT OF COMPENSATION TO FIVE PERCENT OF COMPENSATION; TO AMEND CHAPTER 20, TITLE 9, RELATING TO THE OPTIONAL RETIREMENT PROGRAM FOR TEACHERS AND SCHOOL ADMINISTRATORS, SO AS TO EXTEND ELIGIBILITY IN THAT PROGRAM TO EMPLOYEES OF THE STATE, INCLUDING EMPLOYEES OF TWO AND FOUR-YEAR STATE SUPPORTED INSTITUTIONS OF HIGHER EDUCATION, AND TECHNICAL COLLEGES; AND TO REPEAL, EFFECTIVE JULY 1, 2002, THE OPTIONAL RETIREMENT PROGRAM FOR PUBLICLY-SUPPORTED FOUR-YEAR AND POSTGRADUATE INSTITUTIONS OF HIGHER EDUCATION.
Be it enacted by the General Assembly of the State of South Carolina:
Contribution increased
SECTION 1. Section 9-17-40 of the 1976 Code, as last amended by Act 419 of 1998, is further amended to read:
"Section 9-17-40. Each participant shall contribute monthly to the program the same amount which he would be required to contribute to the South Carolina Retirement System if he were a member of that system. Participant contributions may be made by payroll deduction, by a reduction in salary, or by employer pick up in accordance with any applicable provisions of the United States Internal Revenue Code. Each participating institution shall contribute on behalf of each participant the same amount it would be required to contribute to the South Carolina Retirement System if the participant were a member of that system. Each participating institution shall remit to the designated companies, for application to participants' contracts, an amount equal to the participant's contribution plus that percentage of each participating institution's contribution which would have been used to fund all retirement system benefits for future service if the participants had been members of the retirement system, but the participating institution's contribution may not be less than five percent of compensation. The participating institution shall remit the remainder of its required contribution to the retirement system."
State optional retirement program
SECTION 2. Chapter 20, Title 9 of the 1976 Code is amended to read:
Section 9-20-10. As used in this chapter:
(1) 'Employer' means:
(a) a school district which receives funding from the State from the annual appropriation to the Department of Education for Aid to School Districts - Employer Contributions in the annual general appropriations act;
(b) a four-year and postgraduate institution of higher education supported and under the control of the State;
(c) a technical college supported and under the control of the State;
(d) the State or any of its departments, agencies, bureaus, commissions, and institutions, provided that such entity does not meet the definition of item (1)(a), (b), or (c) of this section.
(2) 'Eligible employee' means:
(a) a person hired on or after July 1, 2001, by an employer as defined in Section 9-20-10(1)(a) to fill a permanent full-time position; or
(b) a person hired on or after July 1, 2002, by an employer as defined in Section 9-20-10(1)(b), (c), or (d) to fill a permanent full-time position; or
(c) a person employed by an employer as defined in Section 9-20-10(1) who, as of June 30, 2001, was a participant of the Optional Retirement Program for Teachers and School Administrators or who, as of June 30, 2002, was a participant of the Optional Retirement Program for Publicly-Supported Four-Year and Postgraduate Institutions of Higher Education.
(3) 'Participant' means an eligible employee who participates in the optional retirement program provided by this chapter.
Section 9-20-20. The South Carolina Retirement System shall establish the State Optional Retirement Program (State ORP), a defined contribution plan, for eligible employees defined in Section 9-20-10(2). An employee is not eligible to participate in the State ORP unless the employee is eligible for membership in the South Carolina Retirement System. The following retirement and death benefit payment options may be provided for a participant in the State ORP: annuities, lump-sum distributions, partial distributions, or periodic withdrawals, whether through individual annuity contracts or mutual funds or individual certificates issued for group annuity contracts, fixed, or variable in nature, or a combination of them. Eligibility is determined solely by the South Carolina Retirement System.
Section 9-20-30. The South Carolina Retirement System shall provide for the administration of the State Optional Retirement Program under this chapter. The director acting on behalf of the South Carolina Retirement System shall designate no fewer than four companies to provide annuity contracts, mutual fund accounts, or similar investment products offered through state or national banking institutions, or a combination of them, under the program. In making the designation, selection criteria must include:
(1) the nature and extent of the rights and benefits to be provided by the contracts or accounts, or both, of participants and their beneficiaries;
(2) the relation of the rights and benefits to the amount of contributions to be made;
(3) the suitability of these rights and benefits to the needs of the participants;
(4) the ability and experience of the designated companies in providing suitable rights and benefits under the contracts or accounts, or both;
(5) the ability and experience of the designated companies to provide suitable education and investment options.
Companies participating in the optional retirement program for publicly-supported four-year and postgraduate institutions of higher education as of July 1, 2002, or the optional retirement program for teachers and school administrators as of July 1, 2001, may continue to participate in this program and this participation is governed by their existing contracts.
Section 9-20-40. (A) All eligible employees hired by an employer on or after July 1, 2001, shall elect either to join the South Carolina Retirement System or to participate in the State ORP under this chapter within sixty days after entry into service. If an eligible employee fails to make the initial election within the required time, the employee is considered to have elected membership in the South Carolina Retirement System. An election made pursuant to this section must be made in writing and filed with the retirement system and the appropriate officer of the employee's participating employer and is effective on the date of employment. An eligible employee electing to participate in the State ORP assumes all investment risk. The election to participate in the State ORP is irrevocable except that an eligible employee who participates in the State ORP may irrevocably elect to join the South Carolina Retirement System during the fifth calendar year after initial enrollment in the State ORP under this chapter. The optional retirement participant must make this election to participate in the South Carolina Retirement System during the months of January, February, or March of the fifth calendar year after the employee's initial enrollment in the State ORP, or failing to make the election within the allotted time, the employee is considered to have irrevocably elected to participate in the State ORP. Upon joining the South Carolina Retirement System, the employee may establish credit in the system for service earned while participating in the State ORP by making a payment to the system in an amount determined by the board. For purposes of this subsection, the date of initial enrollment in the State ORP for employees who previously participated in the Optional Retirement Program for Teachers and School Administrators or the Optional Retirement Program for Publicly-Supported Four-Year and Postgraduate Institutions of Higher Education is the date of initial enrollment in these programs.
(B) All participants in the Optional Retirement Program for Teachers and School Administrators on July 1, 2001, and the Optional Retirement Program for Publicly-Supported Four-Year and Postgraduate Institutions of Higher Education on July 1, 2002, thereafter are participants in the State ORP.
Section 9-20-50. Each participant shall contribute monthly to the program the same amount he would be required to contribute to the South Carolina Retirement System if the participant were a member of that system. Participant contributions must be made by employer pick up in accordance with Section 9-1-1160(B) and any applicable provisions of the Internal Revenue Code of 1986. Each employer shall contribute on behalf of each participant five percent of compensation. Deductions must not be made from this five percent contribution. Each employer shall remit to the designated companies, for application to participants' contracts or accounts, or both, an amount equal to the participant's contribution plus the employer's contribution in accordance with the guidelines established by the Internal Revenue Service for payroll tax remittance. The employer shall remit to the retirement system two and fifty-five hundredths percent of the employee's compensation in accordance with the guidelines established for remitting retirement contributions to the South Carolina Retirement System. The South Carolina Retirement System may retain from this employer contribution an amount as determined by the director to defray any reasonable expenses incurred in performing services regarding the plan. These services may include, but are not limited to:
(1) participant education regarding the merits and risks associated with selection of defined contribution plans versus defined benefit plans;
(2) on-going investment education, where appropriate;
(3) recordkeeping; and
(4) monitoring contract compliance.
Section 9-20-60. (A) Group life insurance benefits may be paid by the State for service rendered while participating in the State ORP under the same requirements set out for participants in the South Carolina Retirement System's defined benefit plan pursuant to Section 9-1-1770. However, a postretirement group life insurance benefit must not be paid by the State for service rendered while participating in the State ORP. Employers shall remit the same contribution for the group life insurance benefit that employers would have contributed had the eligible employee chosen to be a member of the South Carolina Retirement System.
(B) Except for the group life insurance benefit set out in Section 9-20-60(A) and except as authorized in Section 9-20-40, retirement benefits must not be paid by the State for service rendered while participating in the State ORP, the former Optional Retirement Program for Teachers and School Administrators, or the former Optional Retirement Program for Publicly-Supported Four-Year and Postgraduate Institutions of Higher Education."
Repealed
SECTION 3. Chapter 17, Title 9 of the 1976 Code is repealed effective July 1, 2002.
Time effective
SECTION 4. Except where otherwise stated, this act takes effect July 1, 2001.
Ratified the 23rd day of May, 2001.
Approved the 29th day of May, 2001.
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