Code of Laws - Title 9 - Chapter 1 - South Carolina Retirement System

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South Carolina Code of Laws
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Title 9 - Retirement Systems

CHAPTER 1

South Carolina Retirement System

ARTICLE 1

General Provisions

ARTICLE 3

Administration

ARTICLE 5

Membership in System

ARTICLE 7

Creditable Service

ARTICLE 9

Three Funds and Collections for Funds

ARTICLE 11

Management of Funds

ARTICLE 13

Retirement and Retirement Benefits

Editor's Note

2008 Act No. 311, Section 55, provides as follows:

"Upon the effective date of this act, Regulations 19-900 through 19-997 of the South Carolina Code of Regulations shall have no application whatsoever to the operation of Title 9 of the 1976 Code."

SECTION 9-1-1510.Retirement of members at age 60 or after 28 years' service.

(A) A Class One or Class Two member may retire upon written application to the system setting forth at what time, no more than ninety days before nor more than six months after the execution and filing of the application, the member desires to be retired, if the member at the time specified for the member's service retirement has:

(1) five or more years of earned service;

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

(3) separated from service.

(B) A Class Three member may retire upon written application to the system setting forth at what time, no more than ninety days before nor more than six months after the execution and filing of the application, the member desires to be retired, if the member at the time specified for the member's service retirement has:

(1) eight or more years of earned service;

(2) attained the age of sixty years or satisfied the rule of ninety requirement; and

(3) separated from service.

(C) A member who is an elected official whose annual compensation is less than the earnings limitation pursuant to Section 9-1-1790 and who is otherwise eligible for service retirement may retire for purposes of this section without a break in service.

HISTORY: 1962 Code Section 61-101; 1952 Code Section 61-101; 1945 (44) 212; 1949 (46) 424; 1975 (59) 154; 1989 Act No. 85, Section 1, eff May 17, 1989; 2001 Act No. 1, Part II, Section 2A2, eff January 1, 2001; 2012 Act No. 278, Pt I, Section 8, eff July 1, 2012.

SECTION 9-1-1515.Early retirement.

(A) In addition to other types of retirement provided by this chapter, a Class One or Class Two member may elect early retirement if the member:

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

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

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

(4) has separated from service.

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 twenty-eight.

(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 twenty-eight 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 twenty-eight 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 board.

HISTORY: 1990 Act No. 559, Section 1, eff July 1, 1990; 1999 Act No. 100, Part II, Section 52, eff July 1, 1999; 2001 Act No. 1, Part II, Section 2A3, eff January 1, 2001; 2012 Act No. 278, Pt I, Section 9, Pt IV, Subpt 2, Section 43, eff July 1, 2012.

SECTION 9-1-1540.Disability retirement.

(A) Upon the application of a member in service or of the member's employer that is received by the system before January 1, 2014, a member in service on or after July 1, 1970, who has the earned service required pursuant to Section 9-1-1510 for the member's class, or a contributing member who is disabled as a result of an injury arising out of and in the course of the performance of the member's 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 system, 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. For purposes of this section, a member is considered to be in service on the date the application is filed if the member is not retired and the last day the member was employed by a covered employer in the system occurred not more than ninety days prior to the date of filing.

The South Carolina Retirement System may contract with the Department of Vocational Rehabilitation to evaluate the medical evidence submitted with the disability application relative to the job being performed and make recommendations to the system. The system may approve a disability retirement subject to the member participating in vocational rehabilitation with the Department of Vocational Rehabilitation. Upon determination by the department that a member retired on disability is able to reenter the job market and work is available, the retirement system may adjust the benefit paid by the system in accordance with Sections 9-1-1580, 9-1-1590, 9-9-60, and 9-11-90.

(B)(1) Upon the application of a member in service or of the member's employer received by the system after December 31, 2013, a member in service who has the earned service required for the member's class pursuant to Section 9-1-1510, or who is disabled as a result of an injury arising out of and in the course of the performance of the member's duties regardless of length of membership, may be retired by the board if the member is determined to be disabled pursuant to subsection (B)(2) of this section. For purposes of this section, a member is considered to be in service on the date the application is filed if the last day the member was employed by a covered employer in the system occurred not more than one year before the date of filing and, if the member has retired on a service retirement allowance, the member's date of retirement occurred not more than one year before the date of filing.

(2) A member whose application for disability retirement benefits was received by the system after December 31, 2013, is considered disabled if the member qualifies for the payment of Social Security disability benefits and is eligible for benefits pursuant to this section upon proof of the disability, provided that the date of disability established by the Social Security Administration falls within one year after the last day the member was employed by a covered employer in the system. The member shall submit to the retirement system the Social Security Award Notice certifying the date of entitlement for disability benefits as issued by the Social Security Administration. Upon final approval by the system, disability benefits become effective on the date of entitlement as established by the Social Security Administration or the day after the member's last day on the payroll of a covered employer, whichever is later.

HISTORY: 1962 Code Section 61-104; 1952 Code Section 61-104; 1945 (44) 212; 1949 (46) 424; 1970 (56) 1939; 1979 Act No. 102 Section 1; 1982 Act No. 466 Part II Section 23A; 1985 Act No. 74 Section 1; 1986 Act No. 529, Section 6, eff June 18, 1986; 2000 Act No. 387, Part II, Section 67D, eff January 1, 2001; 2010 Act No. 162, Section 1, eff May 12, 2010; 2012 Act No. 278, Pt I, Section 10.A, eff July 1, 2012; 2018 Act No. 221 (H.4698), Section 2.A, eff May 18, 2018.

Editor's Note

2018 Act No. 221, Section 2.D, provides as follows:

"D. This SECTION takes effect upon approval by the Governor and applies to members who retire after December 31, 2016. A member whose one year deadline has expired or will expire in less than ninety days from the date of the Governor's approval has ninety days from the Governor's approval of this act to file an application for disability retirement."

Effect of Amendment

2018 Act No. 221, Section 2.A, in (B)(1), in the second sentence, substituted "one year" for "ninety days" in two places.

SECTION 9-1-1545.Election between service retirement and disability retirement; receipt of service retirement pending approval of disability retirement.

A member may submit an application for service retirement and disability retirement. If the member qualifies for service retirement before the application for disability retirement is approved, the member, upon his request, may begin receiving service retirement benefits immediately. If the application for retirement disability is subsequently approved, the member may choose either the service retirement plan or the disability retirement plan.

HISTORY: 1988 Act No. 658, Part II, Section 12, eff June 8, 1988.

SECTION 9-1-1550.Service retirement allowances.

(A) Upon retirement from service on or after July 1, 1964, a Class One member shall receive a service retirement allowance which shall consist of:

(1) an employee annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his retirement; and

(2) an employer annuity equal to the employee annuity allowable at the age of sixty-five years or at age of retirement, whichever is less, computed on the basis of contributions made prior to the age of sixty-five years; and

(3) if he has a prior service certificate in full force and effect, an additional employer annuity which must be equal to the employee annuity which would have been provided at age sixty-five or at age of retirement, whichever is less, by twice the contributions which he would have made during his entire period of prior service had the system been in operation and had he contributed thereunder during such entire period.

Upon retirement from service after December 31, 2000, a Class One member shall receive a service retirement allowance computed as follows: If the member's service retirement date occurs on or after his sixty-fifth birthday, or after he has completed twenty-eight or more years of creditable service, the allowance must be equal to one and forty-five hundredths percent of his average final compensation multiplied by the number of years of his creditable service.

If the member's service retirement date occurs before his sixty-fifth birthday and before he completes twenty-eight years of creditable service, his service retirement allowance is computed as above, but is reduced by five-twelfths of one percent thereof for each month by which his retirement date precedes the first day of the month, prorated for periods less than a month, coincident with or next following his sixty-fifth birthday.

Notwithstanding the foregoing provisions, any Class One member who retires on or after July 1, 1976, shall receive not less than the benefit provided under the formula in effect before July 1, 1976.

(B) Upon retirement from service after December 31, 2000, a Class Two member shall receive a service retirement allowance computed as follows:

(1) If the member's service retirement date occurs on or after his sixty- fifth birthday or after he has completed twenty-eight or more years of creditable service, the allowance must be equal to one and eighty-two hundredths percent of his average final compensation, multiplied by the number of years of his creditable service.

(2) If the member's service retirement date occurs before his sixty-fifth birthday and before he completes the twenty-eight years of creditable service, his service retirement allowance is computed as in item (1) above but is reduced by five-twelfths of one percent thereof for each month, prorated for periods less than a month, by which his retirement date precedes the first day of the month coincident with or next following his sixty-fifth birthday.

(3) Notwithstanding the foregoing provisions, a Class Two member whose creditable service began before July 1, 1964, shall receive not less than the benefit provided by subsection (A) of this section.

(C) Upon retirement from service after June 30, 2012, a Class Three member shall receive a service retirement allowance computed as follows:

(1) If the member's service retirement date occurs on or after his sixty-fifth birthday or if the member has satisfied the rule of ninety requirement, the allowance must be equal to one and eighty-two hundredths percent of the member's average final compensation, multiplied by the number of years of the member's creditable service.

(2) If the member's service retirement date occurs before his sixty-fifth birthday and before he satisfies the rule of ninety requirement the member's service retirement allowance is computed as in item (1) of this subsection but is reduced by five-twelfths of one percent thereof for each month, prorated for periods less than a month, by which his retirement date precedes the first day of the month coincident with or next following his sixty-fifth birthday.

HISTORY: 1962 Code Section 61-105; 1952 Code Section 61-105; 1945 (44) 212; 1949 (46) 424; 1955 (49) 38, 153; 1964 (53) 1843; 1965 (54) 622; 1966 (54) 2009; 1969 (56) 259; 1972 (57) 2443; 1975 (59) 154; 1976 Act No. 587 Section 2; 1979 Act No. 16 Section 1; 1984 Act No. 384, Sections 1, 2; 1988 Act No. 475, Section 1, eff July 1, 1988; 1989 Act No. 189, Part II, Section 60B, eff July 1, 1989 (became law without the Governor's signature); 2001 Act No. 1, Part II, Section 2A4, eff January 1, 2001; 2012 Act No. 278, Pt I, Section 11, eff July 1, 2012.

SECTION 9-1-1560.Allowances upon retirement for disability.

(A) Except as provided in subsection (E) of this section, upon retirement for disability on or after July 1, 1976, a Class One member shall receive a service retirement allowance if he has attained the age of sixty-five years. Otherwise he shall receive a disability retirement allowance which shall be computed as follows:

(1) Such allowance shall be equal to the service retirement allowance which would have been payable had he continued in service to age sixty-five based on the average final compensation, minus the actuarial equivalent of the contribution the member would have made during such continued service, with an interest rate of four percent per annum.

(2) Notwithstanding the foregoing provisions, any Class One member whose creditable service commenced prior to July 1, 1976, shall receive not less than the benefit which would have been provided by the provisions of this section in effect immediately prior to July 1, 1976.

(B) Except as provided in subsection (E) of this section, upon retirement for disability on or after May 19, 1973, a Class Two member shall receive a service retirement allowance if he has attained the age of sixty-five years. Otherwise he shall receive a disability retirement allowance which shall be computed as follows:

(1) Such allowance shall be equal to the service retirement allowance which would have been payable had he continued in service to age sixty-five based on the average final compensation, minus the actuarial equivalent of the contribution the member would have made during such continued service, with an interest rate of four percent per annum.

(2) Notwithstanding the foregoing provisions, any Class Two member whose creditable service commenced prior to July 1, 1964, shall receive not less than the benefit provided by subsection (A) of this section.

(C) Except as provided in subsection (E) of this section, employees retired on disability subsequent to July 1, 1982, must have their benefits recalculated in accordance with the provisions of item (1) of subsection (A) and item (2) of subsection (B).

(D) Notwithstanding any other provision of this section, upon retirement for disability after October 15, 1992, at any age, a member must receive a disability retirement allowance equal to at least fifteen percent of his average final compensation.

(E)(1) Upon retirement for disability based on an application for disability benefits received by the system after December 31, 2013, a Class One member shall receive a disability retirement allowance equal to one and forty-five hundredths percent of his average final compensation multiplied by the number of years of his creditable service as of the date of retirement, without reduction because of commencement before the normal retirement date.

(2) Upon retirement for disability based on an application for disability benefits received by the system after December 31, 2013, a Class Two or Class Three member shall receive a disability retirement allowance equal to one and eighty-two hundredths percent of his average final compensation, multiplied by the number of years of his creditable service as of the date of retirement, without reduction because of commencement before the normal retirement date.

HISTORY: 1962 Code Section 61-106; 1952 Code Section 61-106; 1945 (44) 212; 1949 (46) 424; 1955 (49) 38; 1960 (51) 1524; 1964 (53) 1843; 1969 (56) 259; 1970 (56) 1939; 1973 (58) 262; 1976 Act No. 587 Section 3; 1981 Act No. 32, Section 1; 1983 Act No. 32 Sections 2-4; 1993 Act No. 166, Section 1, eff June 16, 1993; 2012 Act No. 278, Pt I, Section 10.B, eff July 1, 2012.

SECTION 9-1-1570.Reexamination of beneficiaries retired on account of disability; consequences of refusal to submit to reexamination.

(A) Once each year during the first five years following the retirement of a member on a disability retirement allowance and once in every three-year period thereafter the board may, and upon his application, require any disability beneficiary who has not yet attained the age of sixty-five years to undergo a medical examination to be made at the place of residence of the beneficiary or other place mutually agreed upon by a physician designated by the board. If any disability beneficiary who has not yet attained the age of sixty-five years refuses to submit to at least one medical examination in any such year by a physician designated by the board the member's disability retirement allowance may be discontinued until the member's withdrawal of refusal and if the member's refusal continues for one year, all the member's rights in and to the member's disability retirement allowance may be revoked by the board.

(B) A member who is retired on a disability retirement allowance based upon an application received by the system after December 31, 2013, and who has not yet attained the age of sixty-five years annually shall provide proof to the system that the member remains qualified for the receipt of Social Security disability benefits within thirty days of the anniversary of his retirement date. A member's disability retirement allowance ceases upon a determination by the Social Security Administration that the member is no longer entitled to Social Security disability benefits for any reason. If any disability beneficiary who has not yet attained the age of sixty-five years refuses to provide proof of disability required by the board, the member's disability retirement allowance must be discontinued until the member provides such proof. If a member's refusal to provide proof that the member remains qualified for Social Security disability benefits continues for one year, all of the member's rights in and to the member's disability retirement allowance pursuant to Section 9-1-1540 may be revoked by the board.

HISTORY: 1962 Code Section 61-107; 1952 Code Section 61-107; 1945 (44) 212; 1949 (46) 424; 1973 (58) 262; 1984 Act No. 383, Section 1; 2012 Act No. 278, Pt I, Section 10.C, eff July 1, 2012.

SECTION 9-1-1580.Effect of ability to engage in gainful occupation; change in amount of disability retirement allowance.

Should the system report and certify to the Board that the disability beneficiary is engaged in or is able to engage in a gainful occupation paying more than the difference between his retirement allowance and his average final compensation and should the Board concur in the report, then the amount of his disability retirement allowance must be reduced to an amount which, together with the amount earnable by him, equals the amount of his average final compensation. Should his earning capacity be later changed, the amount of his disability retirement allowance may be further modified. The new disability retirement allowance shall not exceed the amount of the disability retirement allowance originally granted nor an amount which, when added to the amount earnable by the beneficiary, equals the amount of his average final compensation.

The average final compensation may be increased up to ten percent annually to adjust for inflation.

If the disability retirement allowance is eliminated as a result of this section for a period of five consecutive years, all rights in and to his disability retirement allowance are revoked. The member then is entitled to a deferred retirement allowance as provided in Section 9-1-1650 based upon his average final compensation and creditable service at his date of disability retirement.

After age sixty-five, a disability retiree is subject to the same earnings limitation as a service retiree.

HISTORY: 1962 Code Section 61-108; 1952 Code Section 61-108; 1945 (44) 212; 1949 (46) 424; 1981 Act No. 32, Section 2; 1984 Act No. 383, Section 2; 1985 Act No. 74 Section 2.

SECTION 9-1-1590.Effect of restoring beneficiaries to active service.

A disability beneficiary restored to active service at a salary less than his average final compensation shall not become a member of the System and his employer annuity shall be adjusted in accordance with the provisions of Section 9-1-1580.

Should a disability beneficiary under the age of sixty-five years be restored to active service and his compensation then, or at any time thereafter, be equal to or greater than his average final compensation at retirement, his retirement allowance shall cease and any election of an optional benefit shall become void and he shall again become a member of the System and contribute thereafter as provided in Section 9-1-1020. Any prior service certificate on the basis of which his service was computed at the time of his retirement shall be restored to full force and effect and, in addition, upon his subsequent retirement he shall be credited with all his service as a member. The average final compensation may be increased up to ten percent annually to adjust for inflation.

Should any other beneficiary who has been restored to active employment continue in service for a period of forty-eight consecutive months and his annual compensation be equal to or greater than seventy-five percent of his average final compensation at retirement, then he may elect to cease his retirement allowance and become a contributing member again and void his election of an optional benefit. Any prior service certificate on the basis of which his service was computed at the time of his retirement shall be restored to full force and effect and, in addition, upon his subsequent retirement he shall be credited with all his service as a member. Any such beneficiary may request the board to allow him to repay to the System all monies received by him as benefits during any periods subsequent to the date of his reentry into active service and make a contribution equal to the amount he would have contributed had he been a member during the period of his restoration to active service prior to his again becoming a member, together with the interest which would have been credited to the contributions on account of such period of restoration up to the date such contribution is made. Upon the completion of such payment, this period shall also be credited to him as membership service. In no event shall the retirement allowance payable upon subsequent retirement be less than the amount of his allowance previously payable plus any increases which would have been payable under Section 9-1-1810 had he not been restored to service.

HISTORY: 1962 Code Section 61-109; 1952 Code Section 61-109; 1945 (44) 212; 1949 (46) 424; 1973 (58) 167, 262; 1975 (59) 51; 1981 Act No. 32, Section 3; 1988 Act No. 500, Section 2, eff May 9, 1988.

Editor's Note

Section 9-1-1810, referenced in the third paragraph, was repealed by 2012 Act No. 278.

SECTION 9-1-1610.Members of General Assembly may draw retirement benefits under certain conditions.

Any person who has been an active member of the South Carolina Retirement System and who meets all of the requirements and qualifications for retirement, and is or becomes a member of the General Assembly, shall be allowed, at his option, to draw his retirement.

HISTORY: 1962 Code Section 61-110.1; 1965 (54) 665.

SECTION 9-1-1615.Retirement allowances payable in monthly installments; payments after death of retired member.

All retirement allowances are payable in monthly installments. Upon the death of a retired member, the retirement allowance for the month the retired member died, if not previously paid, must be paid to the member's designated beneficiary, if the beneficiary is living at the time of the member's death, otherwise to the member's estate. If the retired member elected a survivor option pursuant to the optional forms of allowances in Section 9-1-1620, any allowance payable to a survivor beneficiary commences in the month after the death of the retired member.

HISTORY: 2001 Act No. 1, Part II, Section 2A5, eff January 1, 2001.

SECTION 9-1-1620.Optional forms of allowances.

(A) No later than the date the first payment of a retirement allowance is due, a member shall elect a form of monthly payment from the following options:

Option A. The maximum retirement allowance payable under law for the life of the member. Upon the member's death, the member's designated beneficiary is entitled to receive any remaining member contributions.

Option B. A reduced retirement allowance payable during the retired member's life, which continues after the member's death for the life of the member's designated beneficiary or, if the member selects multiple beneficiaries, which continues after the member's death in equal shares to and for the life of each of two or more beneficiaries. The reduced retirement allowance payable under this option must be the actuarial equivalent of the maximum retirement allowance payable to the member under law, and if the member selects multiple beneficiaries, the benefit reduction factor must be based on the average age of the designated beneficiaries. If all of the designated beneficiaries predecease the member, then the member shall receive a retirement allowance equal to the maximum retirement allowance payable under law to the member. Any retirement allowance payable under this option, except an allowance for disability retirement pursuant to Section 9-1-1540, shall be subject to the incidental death benefit limitation upon the payment of survivorship benefits to a nonspouse beneficiary under Section 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation Section 1.401(a)(9)-6, Q&A-2.

Option C. A reduced retirement allowance payable during the retired member's life, which continues after the member's death at one-half the rate paid to the member for the life of the member's designated beneficiary or, if the member selects multiple beneficiaries, which continues after the member's death at one-half the rate paid to the member in equal shares to and for the life of each of two or more beneficiaries. The reduced retirement allowance payable under this option must be the actuarial equivalent of the maximum retirement allowance payable to the member under law, and if the member selects multiple beneficiaries, the benefit reduction factor must be based on the average age of the designated beneficiaries. If all of the designated beneficiaries predecease the member, then the member shall receive a retirement allowance equal to the maximum retirement allowance payable under law to the member.

(B)(1) A retired member, within five years after a change in marital status, may revoke the form of monthly payment elected and elect a new form of monthly payment, which must be the actuarial equivalent of the maximum retirement allowance payable to the member under law. The new form of monthly payment is effective on the first day of the month in which the election of the new form of monthly payment is received by the system and must be calculated based upon the ages of the retired member and the member's beneficiary or beneficiaries as of that effective date.

(2) Notwithstanding any other provision of law, a retired member's form of monthly payment may not be changed more than twice. A reversion to the maximum retirement allowance payable under law upon the death of the beneficiary or beneficiaries as provided in Options B and C of subsection (A) constitutes a change in the form of monthly payment for the purposes of this item.

(C) Members retiring before January 1, 2001, shall continue to receive a retirement allowance in accordance with the form of payment selected under the law in effect at the time of their retirement. The provisions of subsection (B) apply to these members but changes in forms of payment occurring before January 1, 2001, are not included in the limitation provided in subsection (B)(2).

(D) A member who retired under the provisions of the previously existing Social Security Advance Option before July 1, 1990, may elect to have his benefit adjusted so that cost-of-living and other special increases in benefits are not applied to the amount of advance or reduction in allowance under this option after July 1, 1992, or the member's attainment of age sixty- two, if later, by making a special lump sum payment before that date. This lump sum payment must be equal to the excess, if any, of cost-of-living and other special increases in benefits actually paid to the member, over the increases that would have been paid had the member not elected an optional form of allowance. If a member does not elect to make the payment, his benefit must be automatically adjusted when no such excess exists, but not before July 1, 1992.

(E) Except as provided in this section, a retired member may not change the form of his monthly payment after the first payment of a retirement allowance is due.

HISTORY: 1962 Code Section 61-111; 1952 Code Section 61-111; 1945 (44) 212; 1949 (46) 424; 1955 (49) 38; 1964 (53) 1843; 1982 Act No. 369, Section 1; 1984 Act No. 381, Section 1; 1985 Act No. 201, Part II, Section 65A; 1986 Act No. 540, Part II, Section 23A, effective June 18, 1986, and became law without the Governor's signature; 1990 Act No. 412, Section 1, eff January 1, 1991, except Option 4 which became eff July 1, 1990; 1992 Act No. 336, Sections 1, 6, eff May 4, 1992; 1996 Act No. 458, Part II, Section 47A, eff June 19, 1996; 2000 Act No. 387, Part II, Section 67S, eff January 1, 2001; 2008 Act No. 311, Sections 5 and 32, eff June 4, 2008; 2015 Act No. 27 (S.373), Section 1, eff June 1, 2015.

Editor's Note

2015 Act No. 27, Section 3, provides as follows:

"SECTION 3. This act takes effect upon approval by the Governor and applies to any new form of monthly payment elected thereafter due to a change in marital status."

SECTION 9-1-1625.Compliance with Internal Revenue Code.

(A) This section applies to distributions made on or after January 1, 1993. Notwithstanding any contrary provision or retirement law that would otherwise limit a distributee's election under this chapter, a distributee may elect, at the time and in the manner prescribed by the board, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

(B) Effective January 1, 2007, and notwithstanding anything in this chapter to the contrary that otherwise would limit a distributee's election under this section, and to the extent allowed under the applicable provisions of the Internal Revenue Code and the Treasury Regulations, a distributee who is a designated beneficiary, but not a surviving spouse, spouse or former spouse alternate payee may elect, at the time and in the manner prescribed by the board, to have all or part of his benefit that qualifies as an eligible rollover distribution paid in a direct trustee-to-trustee transfer to an eligible retirement plan that is an individual retirement plan described in clause (i) or (ii) of Internal Revenue Code Section 402(c)(8)(B). If such a transfer is made:

(1) the transfer shall be treated as an eligible distribution;

(2) the individual retirement plan shall be treated as an inherited individual retirement account or individual retirement annuity within the meaning of Internal Revenue Code Section 408(d)(3)(C); and

(3) Internal Revenue Code Section 401(a)(9)(B) other than clause (iv) thereof shall apply to such individual retirement plan.

(C) A "designated beneficiary" is an individual who is designated as a beneficiary under this chapter and is the designated beneficiary under Internal Revenue Code Section 401(a)(9) and Section 1.401(a)(9)-1, Q&A-4 of the Treasury Regulations. An estate or revocable trust is not considered to be a designated beneficiary for purposes of Internal Revenue Code Section 401(a)(9).

(D) An "eligible rollover distribution" is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include:

(1) any distribution that is one of a series of substantially equal periodic payments made not less frequently than annually for the life or the life expectancy of the distributee or the joint lives or joint life expectancies of the distributee and the distributee's designated beneficiary, or for a specified period of ten years or more;

(2) any distribution to the extent such distribution is required under Internal Revenue Code Section 401(a)(9); and

(3) any hardship distribution.

Effective January 1, 2002, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions that are not includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in Internal Revenue Code Section 408(a) or (b), or in a direct trustee-to-trustee rollover to a qualified trust under Internal Revenue Code Section 401(a) or 403(a) that is part of a defined contribution or defined benefit plan, or to an annuity contract described in Internal Revenue Code Section 403(b), so long as such trust or annuity contract separately accounts for amounts so transferred, including separate accounting for the portion of such distribution that is includible in gross income and the portion of such distribution that is not includible. Effective January 1, 2008, an eligible rollover distribution also shall mean a qualified rollover contribution to a Roth IRA within the meaning of Internal Revenue Code Section 408A.

(E) Effective January 1, 2002, unless otherwise stated an "eligible retirement plan" is:

(1) a plan eligible under Internal Revenue Code Section 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state that agrees to separately account for amounts transferred into the plan from the system;

(2) an individual retirement account described in Internal Revenue Code Section 408(a);

(3) an individual retirement annuity described in Internal Revenue Code Section 408(b);

(4) an annuity plan described in Internal Revenue Code Section 403(a);

(5) an annuity contract described in Internal Revenue Code Section 403(b);

(6) a qualified trust described in Internal Revenue Code Section 401(a) that accepts the distributee's eligible rollover distribution; or

(7) effective January 1, 2008, a Roth IRA described in Internal Revenue Code Section 408A.

(F) Effective January 1, 2002, the definition of eligible rollover distribution also includes a distribution to a surviving spouse, or to a spouse or former spouse who is an alternate payee under a domestic relations order, as defined in Internal Revenue Code Section 414(p).

(G) A "distributee" includes an employee or former employee. It also includes the employee's or former employee's surviving spouse and the employee's or former employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Internal Revenue Code Section 414(p). Effective January 1, 2007, it further includes a nonspouse beneficiary who is a designated beneficiary as defined by Internal Revenue Code Section 401(a)(9)(E). However, a nonspouse beneficiary may rollover the distribution only to an individual retirement account or individual retirement annuity established for the purpose of receiving the distribution and the account or annuity will be treated as an "inherited" individual retirement account or annuity.

(H) A "direct rollover" is a payment by the system to the eligible retirement plan specified by the distributee.

HISTORY: 2008 Act No. 311, Section 6, eff June 4, 2008.

SECTION 9-1-1630.Special benefits to teachers for service prior to July 1, 1945.

Teachers who retired between July 1, 1940 and July 1, 1945 under some other retirement or pension fund and who, at the time of their retirement, had taught for thirty-five years or more shall be eligible for all of the benefits provided under the System on the same terms and conditions that apply to teachers who retire after July 1, 1945. The fact that any such teacher shall have received benefits after his retirement since July 1, 1940 from or under any other retirement or pension fund shall not make such teacher ineligible to come under the provisions of this paragraph, but no such teacher shall draw or receive benefits under the System when he is at the same time receiving benefits from or under any other retirement or pension fund and no such teacher shall be entitled to benefits under the System unless he filed application therefor prior to July 1, 1949.

Subject to the provisions of the preceding paragraph all teachers who, prior to July 1, 1945, shall have taught for a period of thirty-five years, regardless of whether they were employed on April 26, 1945 or subsequently, shall be eligible to become members of the System and shall be entitled to all benefits therefrom, including prior service credit, provided that no benefits shall be payable prior to the date of application for membership. In the calculation of the thirty-five years, teaching in adult schools, night schools and schools for illiterates and work in public school libraries shall be deemed to be equivalent to teaching in public schools.

HISTORY: 1962 Code Section 61-112; 1952 Code Section 61-112; 1949 (46) 424.

SECTION 9-1-1640.Manner of paying annuities.

All employee and employer annuities shall be payable in equal monthly installments.

HISTORY: 1962 Code Section 61-113; 1952 Code Section 61-113; 1945 (44) 212; 1949 (46) 424.

SECTION 9-1-1650.Amounts paid upon termination of employment; election to leave contributions in system; effect of death before or after retirement.

(A) If a member ceases to be a teacher or employee except by death or retirement, the member must be paid within six months after the member's demand for payment, but not less than ninety days after ceasing to be a teacher or employee, the sum of the member's contributions and the accumulated regular interest on the contributions. If the member has five or more years of earned service or eight or more years of such service for a Class Three member, and before the time the member's membership would otherwise terminate, elects to leave these contributions in the system, the member, unless these contributions are paid to him as provided by this section before the attainment of age sixty, remains a member of the system and is entitled to receive a deferred retirement allowance beginning at age sixty computed as a service retirement allowance in accordance with Section 9-1-1550(A) or (B) for Class One and Class Two members and Section 9-1-1550(C) for Class Three members. The employee annuity must be the actuarial equivalent at age sixty of the member's contributions with the interest credits on the contributions, if any, as allowed by the board. If a member dies before retirement, the amount of the member's accumulated contributions must be paid to the member's estate or to the person the member nominated by written designation filed with the board.

(B) Upon the death of a member who did not select a survivor option or who selected a survivor option and the member's designated beneficiary predeceased the member, a lump sum amount must be paid to the member's designated beneficiary or the member's estate if total member contributions and accrued interest at the member's retirement exceed the sum of the retirement allowances paid to the member. Upon the death of a designated beneficiary selected under a survivor option, a lump sum amount must be paid to the beneficiary's estate if total member contributions and accrued interest at the member's retirement exceed the sum of the retirement allowances paid to the member and the member's beneficiary. The lump sum payment must be the total member contributions and accrued interest at retirement less the sum of the retirement allowances paid to the member or in the case of a survivor option, the total member contributions and accrued interest at retirement less the sum of the retirement allowances paid to the member and the member's designated beneficiary. This paragraph does not govern lump sum distributions payable on account of members retiring under former Option 1 of Section 9-1-1620 or on account of members retiring before July 1, 1990, under former Option 4 of Section 9-1-1620.

(C) A member who is not retired making the nomination provided under this section also may name contingent beneficiaries in the same manner that primary beneficiaries are named. A contingent beneficiary has no rights under this chapter unless all primary beneficiaries nominated by the member have predeceased the member and the member's death occurs before retirement. In this instance, a contingent beneficiary is considered the member's beneficiary for purposes of this section and Section 9-1-1660, if applicable. A member may not name a contingent beneficiary with respect to death benefits provided under Section 9-1-1770.

HISTORY: 1962 Code Section 61-114; 1952 Code Section 61-114; 1945 (44) 212; 1949 (46) 424; 1967 (55) 507; 1974 (58) 2057; 1975 (59) 51; 1979 Act No. 82 Section 2; 1984 Act No. 384, Section 3; 1995 Act No. 139, Section 1, eff June 28, 1995; 2000 Act No. 387, Part II, Section 67E, eff January 1, 2001; 2012 Act No. 278, Pt I, Section 12, eff July 1, 2012; 2018 Act No. 149 (H.4869), Section 1, eff July 1, 2018; 2021 Act No. 62 (S.658), Section 2, eff May 17, 2021.

Effect of Amendment

2018 Act No. 149, Section 1, in the first undesignated paragraph, in the fourth sentence, deleted ", duly acknowledged and" following "nominated by written designation".

2021 Act No. 62, Section 2, inserted the (A), (B), and (C) designators; and rewrote (C).

SECTION 9-1-1660.Nominee on member's death may receive monthly allowance instead of accumulated contributions.

(A) The person nominated by a member to receive the full amount of the member's accumulated contributions if the member dies before retirement may, if the member:

(1) has five or more years of earned service or eight or more years of such service for a Class Three member;

(2) dies while in service; and

(3) has either attained the age of sixty years or has accumulated fifteen years or more of creditable 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 the member's death and had named the person as beneficiary under an election of Option B of Section 9-1-1620(A).

For purposes of the benefit calculation, a member who is not yet eligible for service retirement is assumed to be sixty years of age.

(B) A person otherwise eligible under subsection (A) of this section to elect to receive an allowance but who has received a refund of the member's accumulated contributions under Section 9-1-1650, upon repayment of the refund to the system in a single sum, may make the election provided for in subsection (A). The monthly payments under Option B to the person date from the time of the repayment of the accumulated contributions to the system.

(C) Regardless of whether a member is in service, if a member dies before retirement and, at the time of the member's death, was eligible to receive a service retirement allowance pursuant to Section 9-1-1510 or Section 9-1-1515, the person nominated by a member to receive the full amount of the member's accumulated contributions if the member dies before retirement may 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 the member's death and had named the person as beneficiary under an election of Option B of Section 9-1-1620(A).

(D) If a member has designated more than one beneficiary for the receipt of the member's accumulated contributions if the member dies before retirement, and if those beneficiaries become eligible to elect an allowance pursuant to this section upon the member's death, all of the beneficiaries must elect the allowance in order for the allowance to become payable in lieu of the return of accumulated contributions.

HISTORY: 1962 Code Section 61-114.1; 1956 (49) 1605; 1957 (50) 540; 1962 (52) 1659; 1978 Act No. 644 Part II Section 33; 1981 Act No. 133, Section 1; 1983 Act No. 26 Section 1; 1985 Act No. 201, Part II, Section 48C; 2000 Act No. 387, Part II, Section 67V, eff January 1, 2001; 2012 Act No. 278, Pt I, Section 13, Pt IV, Subpt 3, Section 66.A, eff July 1, 2012.

SECTION 9-1-1665.Compliance with Internal Revenue Code Section 401(a)(9).

(A) Effective as of January 1, 1989, the system will pay all benefits in accordance with the requirements of Section 401(a)(9) of the Internal Revenue Code, including the incidental death benefit requirement in Section 401(a)(9)(G), and the applicable Treasury Regulations and Internal Revenue Service Rulings and other interpretations issued thereunder, including Treasury Regulations Sections 1.401(a)(9)-2 through 1.401(a)(9)-9. The provisions of this section shall override any distribution options that are inconsistent with Section 401(a)(9) to the extent that those distribution options are not grandfathered under Treasury Regulation Section 1.401(a)(9)-6, Q&A-16.

(B) Each member's entire benefit shall be distributed to the member, beginning no later than the required beginning date, over the member's lifetime or the joint lives of the member and a designated beneficiary, or over a period not extending beyond the member's life expectancy or the joint life expectancies of the member and a designated beneficiary. If a member fails to apply for retirement benefits by his required beginning date, the board shall begin distributing the benefit as required by this chapter.

(1) For purposes of this section, the "required beginning date" is April first of the calendar year after the later of the following:

(a) the calendar year in which the member reaches age seventy and one-half years of age; or

(b) the calendar year in which the member retires.

(2) For purposes of this section, a "designated beneficiary" means any individual designated as a co-beneficiary by the member under this chapter. If the member designates a trust as a co-beneficiary, the individual beneficiaries of the trust shall be treated as designated beneficiaries if the trust satisfies the requirement set forth in Treasury Regulation Section 1.401(a)(9)-3.

(3) Payment of retirement benefits, for those members who are eligible to receive retirement benefits and who have not applied for such pursuant to the provisions of this chapter, and who continue membership after attaining seventy and one-half years of age, shall commence on the effective date of retirement.

(C) If a retired member dies after benefit payments have begun or are required to begin under subsection (B) of this section, any survivor benefits shall be distributed at least as rapidly as under the distribution method being used at the member's death.

(D) If an active or inactive member dies before benefit payments have begun or are required to begin under subsection (B) of this section, any death benefits shall be distributed by December thirty-first of the calendar year that contains the fifth anniversary of the member's death. However, the five-year rule shall not apply to any death benefit that is payable to a member's designated beneficiary, if:

(1) the benefit is distributed over the designated beneficiary's lifetime or over a period not extending beyond the designated beneficiary's life expectancy; and

(2) the distributions begin no later than December thirty-first of the calendar year that contains the first anniversary of the member's death.

HISTORY: 2008 Act No. 311, Section 7, eff June 4, 2008.

SECTION 9-1-1670.Change or error in records.

(A) If a change or error in the records results in a member or beneficiary receiving from the system more or less than he would have been entitled to receive had the records been correct, the board shall correct the error and, so far as practicable, adjust the payment so that the actuarial equivalent of the benefit to which the member or beneficiary was correctly entitled is paid.

(B) The system must correct its records relating to a member upon:

(1) written certification from the employer that the employer's records contained an error that affected the enrollment of the member; and

(2) a showing to the system that all other related records and accounts have been corrected and adjusted to correspond to the change requested of the system.

A correction of the records of the system takes effect only upon payment by the employer and employee to the system of costs as determined by the system.

(C) An employer's request to correct a member's record pursuant to subsection (B) must be made within two years of the commission of the error by the employer.

HISTORY: 1962 Code Section 61-115; 1952 Code Section 61-115; 1945 (44) 212; 1949 (46) 424; 1999 Act No. 72, Section 1, eff June 11, 1999.

SECTION 9-1-1680.Exemption from taxation and legal process; exceptions; assignment.

Except as provided in Section 9-18-10, and related sections, Article 11, Chapter 17, Title 63 and Section 8-1-115 and subject to the doctrine of constructive trust ex maleficio, and subject to income tax levies imposed pursuant to state or federal law and distributions made pursuant to the federal Pension Protection Act of 2006, the right of a person to an annuity or a retirement allowance or to the return of contributions, an annuity, or retirement allowance itself, any optional benefit, or any other right accrued or accruing to any person under the provisions of this chapter, and the monies of the system created under the provisions of this chapter or any private retirement system operated by a municipality, are exempted from any state or municipal tax, except the taxes imposed pursuant to Chapters 6 and 16 of Title 12, and exempted from levy and sale, garnishment, attachment, or any other process and are unassignable except as specifically otherwise provided in this chapter. This section does not apply to any authorized deduction from a retirement allowance.

HISTORY: 1962 Code Section 61-116; 1952 Code Section 61-116; 1945 (44) 212; 1949 (46) 424; 1988 Act No. 297, eff February 2, 1988; 1989 Act No. 189, Part II, Section 39C, eff for taxable years beginning after 1988 and with respect to estates of decedents dying after 1988 (became law on June 8, 1989, without the Governor's signature); 2001 Act No. 16, Section 2, eff April 10, 2001; 2008 Act No. 311, Section 8, eff June 4, 2008.

SECTION 9-1-1690.Credit of State is not pledged for payments; rights in case of termination of system or discontinuance of contributions.

All agreements or contracts with members of the System pursuant to any of the provisions of this chapter shall be deemed solely obligations of the Retirement System and the full faith and credit of this State and of its departments, institutions and political subdivisions and of any other employer is not, and shall not be, pledged or obligated beyond the amounts which may be hereafter annually appropriated by such employers in the annual appropriations act, county appropriation acts and other periodic appropriations for the purposes of this chapter. In case of termination of the System, or in the event of discontinuance of contributions thereunder, the rights of all members of the System to benefits accrued to the date of such termination or discontinuance of contributions, to the extent then funded, are nonforfeitable.

HISTORY: 1962 Code Section 61-117; 1952 Code Section 61-117; 1945 (44) 212; 1949 (46) 424; 1970 (56) 1939.

SECTION 9-1-1740.Increase in benefits for persons who were receiving benefits prior to July 1, 1966.

Effective July 1, 1967, the monthly benefits, inclusive of the supplemental allowances payable under the provisions of Sections 9-1-1910, 9-1-1920 and 9-1-1930, for persons who commenced receiving benefits from the System prior to July 1, 1966, shall be increased as follows:

If benefits commenced July 1, 1965 to June 30, 1966, the increase shall be five percent. An additional one percent shall be added for each preceding fiscal year in which benefits commenced until July 1, 1945, at which time the increase shall be twenty-five percent.

The minimum increase pursuant to this section, inclusive of the increase in the supplemental allowances, shall be five dollars per month. However, if an optional benefit has been elected, the minimum shall be reduced actuarially as determined by the Board, and shall be applicable to the retired member or his designated beneficiary under the option elected.

HISTORY: 1962 Code Section 61-122; 1967 (55) 56.

SECTION 9-1-1750.Increase in benefits for persons who were receiving benefits prior to July 1, 1967 and subsequent to June 30, 1966.

Effective July 1, 1968, the monthly benefits, inclusive of the supplemental allowances payable under the provisions of Sections 9-1-1910, 9-1-1920 and 9-1-1930, for persons who commenced receiving benefits from the System prior to July 1, 1967 and subsequent to June 30, 1966 shall be increased by five percent, and such monthly benefits to persons who commence receiving benefits in each fiscal year thereafter through the fiscal year ending June 30, 1970, shall be increased by five percent provided that there is sufficient investment income in excess of the valuation interest assumption to fund such increases or a proportionate part thereof on a lifetime basis, as determined by the actuary.

The minimum increase pursuant to this section, inclusive of the increase in the supplemental allowances, shall be five dollars per month. However, if an optional benefit has been elected, the minimum shall be reduced actuarially as determined by the Board, and shall be applicable to the retired member or his designated beneficiary under the option elected.

HISTORY: 1962 Code Section 61-123; 1968 (55) 2855; 1970 (56) 1939.

SECTION 9-1-1760.Increase in benefits for persons who retired prior to July 1, 1972.

All members of the State Retirement System who retired prior to July 1, 1972, shall have their service retirement allowance increased eleven percent. The computation of such increase shall commence on and include July 1, 1974, and the increase shall be paid from the General Fund of the State.

HISTORY: 1962 Code Section 61-123.1; 1974 (58) 2608.

SECTION 9-1-1765.Additional increase in benefits for persons who retired prior to July 1, 1972.

In addition to the increase in the service retirement allowance for members of the State Retirement System who retired prior to July 1, 1972, provided in Section 9-1-1760, all such members shall receive an additional increase in their service retirement allowance of four percent per year computed and commencing on and including October 1, 1976.

HISTORY: 1976 Act No. 709 Part II Section 9.

SECTION 9-1-1766.Further additional increase in benefits for persons who retired prior to July 1, 1972.

In addition to the increase in the service retirement allowance for members of the State Retirement System who retired prior to July 1, 1972, provided in Section 9-1-1760 and Section 9-1-1765, all such members shall receive an additional increase in their service retirement allowance of five percent per year computed and commencing on and including January 1, 1978.

HISTORY: 1977 Act No. 219 Pt II Section 23.

SECTION 9-1-1767.Increase of benefits payable due to retirement before July 1, 1988 and July 1, 1989.

Effective July 1, 1988, the benefits payable due to retirement before July 1, 1988, must be increased by ten percent.

Effective July 1, 1989, the benefits payable due to retirement before July 1, 1989, must be increased by seven percent.

HISTORY: 1988 Act No. 475, Section 3, eff July 1, 1988; 1989 Act No. 189, Part II, Section 60C, eff July 1, 1989 (became law without the Governor's signature).

SECTION 9-1-1770.Preretirement Death Benefit Program; post-retirement benefit payment.

(A) There is created the Preretirement Death Benefit Program for all employers under the system except counties, municipalities, other political subdivisions, and those state departments, agencies, or other institutions which pay directly to the system the total employer contributions for the participating members in their employ.

(B) The program is available to those employers exempted in subsection (A) by written application of the employer. An application is an irrevocable commitment to participate under the program. Applications are effective July first next following the date of receipt by the system of the application.

(C)(1) Upon receipt of proof, satisfactory to the board, of the death of: (a) a contributing member in service who had completed at least one full year of membership in the system or of the death of a contributing member as a result of an injury arising out of and in the course of the performance of his duties regardless of length of membership, as of the effective date of his employer's participation, or (b) a retired contributing member of the system, there must be paid to the person he nominated for the refund of his accumulated contributions, unless he has nominated a different beneficiary by written designation filed with the board, in the event of his death pursuant to Section 9-1-1650, if the person is living at the time of the member's death, otherwise to the member's estate, a death benefit equal to the annual earnable compensation of the member at the time his death occurs. The death benefit is payable apart and separate from the payment of the member's accumulated contributions on his death pursuant to Sections 9-1-1650 or 9-1-1660.

(2) For purposes of this subsection, a member described in item (1)(a) is considered to be in service at the date of his death if the last day the member was employed in a continuous, regular pay status, while earning regular or unreduced wages and regular or unreduced retirement service credit, whether the member was physically working on that day or taking continuous accrued annual leave or sick leave while receiving a full salary, occurred not more than ninety days before the date of his death and he has not retired.

(3) For purposes of this subsection, a member described in (1)(b) is considered a retired contributing member if the last day the member was employed in a continuous, regular pay status, while earning regular or unreduced wages and paying retirement system contributions whether the member was physically working on that day or taking continuous accrued annual leave or sick leave while receiving a full salary, occurred not more than ninety days before the date of his death.

(D)(1) For the purposes of this subsection, a first responder is defined by Section 42-7-90(3)(a) who is an active member of the retirement system. Nothing in this subsection may be construed to expand the eligibility requirements for membership in the system.

(2) Upon receipt by the system of the satisfactory proof of death of a member of the system whose employer participates in the Preretirement Death Benefit Program and whose death was a natural and proximate result of an injury by external accident or violence incurred while undergoing a hazard peculiar to the member's employment as a first responder while in the actual performance of his duty, provided that his death is not the result of the member's wilful negligence, suicide, or intentionally self-inflicted bodily injury, there must be paid to the member's designated beneficiary a one-time, lump sum benefit payment of seventy-five thousand dollars.

(3) The amount of the benefit provided for in item (2) is increased to a total of one hundred fifty thousand dollars if the member is killed in the line of duty as defined above and the member's death is either:

(a) the result of an unlawful and intentional act of another person; or

(b) the result of an accident that occurs:

(i) as a result of the member's response to fresh pursuit, defined as the pursuit of a person who has committed or is reasonably suspected of having committed a felony, misdemeanor, traffic infraction, or violation of a county or municipal ordinance;

(ii) as a result of the member's response to what is reasonably believed to be an emergency;

(iii) at the scene of a traffic accident to which the member has responded; or

(iv) while the member is enforcing what is reasonably believed to be a traffic law or ordinance.

(4) Payments made pursuant to this subsection must be paid to the beneficiary designated for this benefit by the member in writing and filed with the system during the member's lifetime. If no designation is made, then the payment must be paid to the member's surviving spouse. If there is no surviving spouse, the payment must be paid to the member's surviving children in equal portions. If there is no surviving spouse or child, the benefit is payable to the member's surviving parents in equal portions. If a beneficiary is not designated and there is no surviving child, spouse, or parent, then the sum must be paid to the member's estate. The payments required by this subsection are in addition to any other benefit set forth in this chapter or otherwise in law, including worker's compensation, and are exempt from the claims and demands of creditors of the member.

(5) Payments made pursuant to this subsection must be paid from the contributions made by participating employers to the Preretirement Death Benefit Program. Notwithstanding any other provision of law, the board may adjust the required contributions to the Preretirement Death Benefit Program as necessary to fund these benefits on the basis of the program's actual experience and the recommendation of the system's actuary.

(6) Any benefits paid pursuant to this subsection are not subject to subrogation, assignment, set-off, or lien claimed pursuant to Section 42-1-560.

(E) Upon the death of a retired member who is not a retired contributing member after December 31, 2000, there must be paid to the designated beneficiary or beneficiaries, if living at the time of the retired member's death, otherwise to the retired member's estate, a benefit of two thousand dollars if the retired member had ten years of creditable service but less than twenty years, four thousand dollars if the retired member had twenty years of creditable service but less than twenty-eight, and six thousand dollars if the retired member had at least twenty-eight years of creditable service at the time of retirement, if the retired member's most recent employer, before the member's retirement, is covered by the preretirement Death Benefit Program.

HISTORY: 1962 Code Section 61-124; 1968 (55) 2497; 1972 (57) 2207; 1973 (58) 169; 1974 (58) 2176; 1977 Act No. 26 Section 2; 1984 Act No. 386, Section 1; 1985 Act No. 201, Part II, Section 51A; 1990 Act No. 412, Section 8, eff January 1, 1991; 1991 Act No. 171, Part II, Section 44A, eff June 12, 1991; 1996 Act No. 458, Part II, Section 46A, eff June 19, 1996; 2001 Act No. 1, Part II, Section 2A5, eff January 1, 2001; 2001 Act No. 1, Part II, Section 2B2, eff July 1, 2000; 2005 Act No. 153, Pt II, Section 6, eff July 1, 2005; 2010 Act No. 176, Section 1, eff May 19, 2010; 2023 Act No. 75 (S.108), Section 1, eff June 19, 2023.

Effect of Amendment

2023 Act No. 75, Section 1, inserted (D), which was previously reserved.

SECTION 9-1-1775.Death Benefit Plan.

(A) The Death Benefit Plan for members of the South Carolina Retirement System, hereinafter referred to as the "plan", is established for the purpose of providing for the payment of the benefits provided by Section 9-1-1770.

(B) A separate fund, to be known as the Death Benefit Plan Reserve Fund, is established within the South Carolina Retirement System, hereinafter referred to as the "retirement system", to be held in trust by the board. The fund shall consist of all contributions paid by the employers and other monies received and paid into the fund for death benefit purposes, and of the investment earnings on these monies, and must be used only to pay the death benefits prescribed by subsection (C). Concurrent with the determination of the initial liability of the plan for the balance of the fiscal year on and after the effective date of the benefit, for the death benefit provided and to be paid for pursuant to this plan, there must be segregated and transferred from the Employer Annuity Accumulation Fund of the retirement system to the reserve fund created by this section the amounts determined by the actuary to be necessary to pay anticipated death benefit claims. Subsequent segregations and transfers must be made as required to pay the death benefit prescribed by subsection (C) from the reserve fund provided by this section.

(C) At the death of a member who has met the eligibility requirements set forth in Section 9-1-1770, a benefit equal to the death benefit provided by Section 9-1-1770 must be paid to the person nominated by the member in accordance with the provisions of Section 9-1-1770 or to the member's estate.

(D) The actuary shall investigate the claim experience of the plan as provided by Section 9-1-250. On the basis of these investigations and upon the recommendation of the actuary, as provided in Section 9-1-1210, the board shall certify the contribution rates necessary to fund the death benefit authorized to be paid by the plan. As soon as practicable after the close of each fiscal year, the board shall determine the contribution which the employers participating in the plan are required to pay into the reserve fund to discharge the obligations of the plan for the past fiscal year.

(E) Each qualified member of the retirement system is to be covered as provided in this section effective commencing as of June 19, 1973.

HISTORY: 2008 Act No. 311, Section 34, eff June 4, 2008; 2010 Act No. 176, Section 2, eff May 19, 2010.

SECTION 9-1-1780.Recomputation allowances of certain persons having thirty-five or more years of creditable service.

Effective July 1, 1969, any monthly retirement allowance which commenced prior to such date to or on account of a Class Two member who, at retirement or earlier death, had completed thirty-five or more years of creditable service but had not reached his sixty-fifth birthday shall be recomputed to reflect the deletion as of July 1, 1969 of the five-twelfths of one percent reduction previously applicable. Commencing July 1, 1969 the recomputed allowance, modified to reflect the election, if any, of an optional benefit under Section 9-1-1620, shall be payable.

HISTORY: 1962 Code Section 61-125; 1969 (56) 259.

SECTION 9-1-1790.Amount which may be earned upon return to covered employment.

(A)(1) A retired member of the system who has been retired for at least thirty consecutive calendar days may be hired and return to employment covered by this system or any other system provided in this title and earn up to ten thousand dollars without affecting the monthly retirement allowance the member is receiving from the system. If the retired member continues in service after earning ten thousand dollars in a calendar year, the member's allowance must be discontinued during his period of service in the remainder of the calendar year. If the employment continues for at least forty-eight consecutive months, the provisions of Section 9-1-1590 apply. If a retired member of the system returns to employment covered by this system or any other system provided in this title sooner than thirty days after retirement, the member's retirement allowance is suspended while the member remains employed by the participating employer. If an employer fails to notify the system of the engagement of a retired member to perform services, the employer shall reimburse the system for all benefits wrongly paid to the retired member.

(2) The earnings limitation imposed pursuant to this item does not apply if the member meets at least one of the following qualifications:

(a) the member retired before January 2, 2013;

(b) the member has attained the age of sixty-two years at retirement; or

(c) compensation received by the retired member from the covered employer is for service in a public office filled by the appointment of the Governor and with confirmation by the Senate, by appointment or election by the General Assembly, or by election of the qualified electors of the applicable jurisdiction.

(B) An employer shall pay to the system the employer contribution for active members prescribed by law with respect to any retired member engaged to perform services for the employer, regardless of whether the retired member 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.

(C) A retired member shall pay to the system the employee contribution as if the member were an active contributing member if an employer participating in the system employs the retired member. The retired member does not accrue additional service credit in the system by reason of the contributions required pursuant to this subsection and subsection (B) of this section.

(D) A retired member of the South Carolina Retirement System who is not a member of the Police Officers Retirement System, but is employed in a position that would otherwise be covered by the Police Officers Retirement System, shall not join the Police Officers Retirement System but, notwithstanding any other provision of law, that member is deemed a retired contributing member of the South Carolina Retirement System and shall remit the employee contributions required under subsection (C) of this section to the South Carolina Retirement System and the employer shall remit to the South Carolina Retirement System the employer contribution required by subsection (B). An employer who hires a retiree of the South Carolina Retirement System pursuant to this subsection shall elect to participate as an employer in the South Carolina Retirement System.

HISTORY: 1962 Code Section 61-126; 1969 (56) 272; 1973 (58) 167; 1974 (58) 2066; 1975 (59) 49; 1977 Act No. 43 Section 1; 1978 Act No. 428 Section 1; 1979 Act No. 199 Part II Section 24A; 1980 Act No. 517 Part II, Section 19A; 1981 Act No. 178 Part II Section 33; 1982 Act No. 466 Part II Section 41A; 1983 Act No. 151 Part II Section 50A; 1984 Act No. 512, Part II, Section 50A; 1985 Act No. 201, Part II, Section 42A; 1986 Act No. 540, Part II, Section 43A, effective June 18, 1986, and became law without the Governor's signature; 1987 Act No. 170, Part II, Section 38A, eff June 22, 1987 (became law without Governor's signature); 1988 Act No. 658, Part II, Section 40A, eff June 8, 1988; 1989 Act No. 189, Part II, Section 50A, eff June 8, 1989 (became law without the Governor's signature); 1999 Act No. 100, Part II, Section 27, eff July 1, 1999; 2001 Act No. 25, Section 1, eff July 1, 2001; 2005 Act No. 153, Pt II, Section 7, eff July 1, 2005; 2012 Act No. 278, Pt I, Section 14.A, eff January 2, 2013.

SECTION 9-1-1795.Employment of certain retired teachers without loss of retirement benefits; procedure by which retired teachers may be employed.

(A) A retired member of the system may return to employment covered by the system without affecting the monthly retirement allowance he is receiving from the system if the retired member is a certified teacher and is employed by a school district to teach in the classroom in his area of certification in a critical academic need area or geographic need area as defined by the State Board of Education.

(B) For the provisions of this section to apply, the Department of Education must review and approve, from the documentation provided by the school district, that no qualified, nonretired member is available for employment in the position, and that the member selected for employment meets the requirements of this section. However, a school district may not consider a member of the system for employment before May thirty-first of each year. After approval is received from the Department of Education, school districts must notify the State Board of Education of the engagement of a retired member as a teacher and the department must notify the State Retirement System of their exemption from the earnings limitation. If the employing district fails to notify the department of the engagement of a retired member as a teacher, the district shall reimburse the system for all benefits wrongly paid to the retired member.

(C) A school district shall pay to the system the employer contribution for active members prescribed by law with respect to any retired member engaged to perform services for the district, regardless of whether the retired member is a full-time or part-time employee, a temporary or permanent employee. If a district which 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 district by the State.

(D) Beginning July 1, 2001, any retired certified school teacher or certified employee may be employed in a school or school district which is in a critical geographic need area or has received a 'below average' or 'unsatisfactory' academic performance rating pursuant to the Education Accountability Act without penalty from the South Carolina Retirement System.

HISTORY: 1999 Act No. 100, Part II, Section 82, eff July 1, 1999; 2000 Act No. 387, Part II, Section 11A, eff July 1, 2000; 2000 Act No. 393, Section 17, eff August 1, 2000; 2001 Act No. 64, Section 1, eff June 28, 2001.

SECTION 9-1-1800.Recalculation of benefits for certain persons who retired prior to July 1, 1964.

Effective July 1, 1969, the monthly benefits payable to or on account of any member who retired from service prior to July 1, 1964 and who, had he remained in service thereafter would have been a Class Two member, shall be recalculated in accordance with the provisions of the System applicable to Class Two members retired on or after July 1, 1964, including any adjustment thereto which would be applicable under Section 9-1-1740. The benefit so determined shall be compared with the monthly benefit payable to or on account of the member under the System as in effect on June 30, 1969 inclusive of the supplemental allowances payable under the provisions of Sections 9-1-1910 and 9-1-1920, as amended, effective July 1, 1969, and Section 9-1-1930 and the increase, if any, in the monthly benefit shall be paid from the general fund of the State.

HISTORY: 1962 Code Section 61-127; 1969 (56) 444.

SECTION 9-1-1812.Revision of sections upon certain conditions.

If all or any portion of Sections 1 and 2 of Act 311 of 2008, for any reason, is held to be unconstitutional, invalid, or unenforceable, either in whole or in part, or if any of the amendments made to Section 9-1-1810 of the 1976 Code by Act 153 of 2005, for any reason, are held to be unconstitutional, invalid or unenforceable, either in whole or in part, then effective at the time of that holding:

(1) Section 9-1-1810 of the 1976 Code is amended to the version of that section in effect before the enactment of Act 153 of 2005; and

(2) Section 9-11-310 of the 1976 Code is amended to the version of Section 9-11-310 in effect before the enactment of Act 311 of 2008.

HISTORY: 2008 Act No. 311, Section 57, eff June 4, 2008.

Editor's Note

Sections 9-1-1810 and 9-11-310, referenced in the text, were repealed by 2012 Act No. 278.

SECTION 9-1-1814.Revision of sections upon certain conditions.

If for any reason, an assumed annual rate of return on the investments of the assets of the South Carolina Retirement System and the South Carolina Police Officers Retirement System of less than eight percent is approved or otherwise takes effect, then effective at that time the provisions of Section 9-1-1812 apply and Section 9-1-1810 of the 1976 Code is amended to the version of that section in effect before the enactment of Act 311 of 2008.

HISTORY: 2008 Act No. 311, Section 58, eff June 4, 2008.

Editor's Note

Section 9-1-1810, referenced in the text, was repealed by 2012 Act No. 278.

SECTION 9-1-1815.Retirement allowance adjustments.

Effective beginning July 1, 2012, and annually thereafter, the retirement allowance received by retirees and their surviving annuitants inclusive of supplemental allowances payable pursuant to the provisions of Sections 9-1-1910, 9-1-1920, and 9-1-1930, must be increased by the lesser of one percent or five hundred dollars. Only those retirees and their surviving annuitants in receipt of an allowance on July first preceding the effective date of the increase are eligible to receive the increase. Any increase in allowance granted pursuant to this section must be included in the determination of any subsequent increase.

HISTORY: 2012 Act No. 278, Pt I, Section 2.A, eff July 1, 2012.

SECTION 9-1-1830.Payment and transfer of funds to the employer annuity accumulation fund.

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 board, on the recommendation of the actuary, shall 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.

HISTORY: 1980 Act No. 407, Section 9; 1986 Act No. 309 Section 8, eff February 4, 1986; 2012 Act No. 278, Pt IV, Subpt 2, Section 44, eff July 1, 2012.

SECTION 9-1-1850.Purchases of additional service credit by members with at least twenty-five years of creditable service.

A member who has at least twenty-five years of creditable service may elect to receive up to three years of additional service credit as though the additional service credit were rendered by the member as an employee or member upon paying into the member's retirement system, during the ensuing number of years the member wishes to purchase in the manner the Comptroller General shall direct, the employer and employee contributions that would be due for the position that the member presently holds at the salary level in effect during those years. If the position is consolidated or eliminated after the member's retirement, the member shall pay the employer and employee contributions during the remaining required years at a level equal to what these contributions were for the position before its consolidation or elimination. The member also shall pay the employer and employee cost for health and dental insurance in effect during the ensuing years the member wishes to purchase. The additional service credit qualifies the member for retirement and the member must terminate employment within ninety days after electing the option provided by this section. The salary level of the position the member presently holds, during the ensuing years the member pays the employer and employee contributions, is attributable to the member for purposes of determining the member's average final compensation.

The retirement benefits of the member shall not commence until the time benefits would have been paid when the member had completed twenty-eight years of service.

The option allowed by this section cannot be exercised if the member has purchased nonqualified service pursuant to Section 9-1-1140(E).

HISTORY: 1986 Act No. 450, Section 1, eff May 26, 1986; 1988 Act No. 632, Section 1, eff June 7, 1988; 1993 Act No. 166, Section 3A, eff June 16, 1993; 1994 Act No. 420, Section 3, eff May 25, 1994 and applies with respect to payments made pursuant to Section 9-1-1850(A) of the 1976 Code after June 30, 1994; 2001 Act No. 1, Part II, Section 2A7, eff January 1, 2001.

SECTION 9-1-1870.Beneficiaries receiving Medicaid (Title XIX) sponsored nursing home care; effect on benefits; exception.

Notwithstanding any other provision of law, except as provided below, retirees and beneficiaries under the State Retirement Systems receiving Medicaid (Title XIX) sponsored nursing home care as of June thirtieth of the prior fiscal year shall receive no increase in retirement benefits during the current fiscal year. However, a retired employee affected by the above prohibition may receive the scheduled increase if he is discharged from the nursing home and does not require admission to a hospital or nursing home within six months. The Department of Health and Human Services, the Department of Social Services, and the State Retirement Systems must share the information needed to implement this section.

HISTORY: 2002 Act No. 356, Section 1, Pt IX.E(1), eff July 1, 2002.

ARTICLE 15

Supplemental Allowances for Certain Members

ARTICLE 17

Teacher and Employee Retention Incentive Program [Repealed]

South Carolina Code of Laws Unannotated

South Carolina Code of Laws
Unannotated