Bill 3132

                    Current Status

Bill Number:               3132
Ratification Number:       476
Act Number                 412
Introducing Body:          House
Subject:                   Retirement options

(A412, R476, H3132)

AN ACT TO AMEND SECTIONS 9-1-1620, 9-9-70, AND 9-11-150, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE RETIREMENT BENEFIT OPTIONS AVAILABLE FOR MEMBERS OF THE SOUTH CAROLINA RETIREMENT SYSTEM, THE RETIREMENT SYSTEM FOR MEMBERS OF THE GENERAL ASSEMBLY, AND THE SOUTH CAROLINA POLICE OFFICERS RETIREMENT SYSTEM, SO AS TO PROVIDE FOR PAYMENTS TO MORE THAN ONE BENEFICIARY AND TO PROVIDE FOR A BENEFIT REDUCTION FACTOR, TO PROVIDE THAT COST-OF-LIVING AND OTHER SPECIAL BENEFIT INCREASES ARE NOT APPLIED TO BENEFITS ADVANCED UNDER THE OPTION ALLOWING ADVANCEMENT OF SOCIAL SECURITY BENEFITS, AND TO PROVIDE THAT MEMBERS WHO DESIGNATED A SPOUSE AS A BENEFICIARY MAY MAKE A NEW DESIGNATION AFTER THE DEATH OF THE SPOUSE; TO AMEND THE 1976 CODE BY ADDING SECTIONS 9-1-100, 9-9-220, AND 9-11-15 SO AS TO PROVIDE THAT PAYMENTS TO BENEFICIARIES UNDER THESE RETIREMENT SYSTEMS MAY BE MADE TO MORE THAN ONE PERSON, TO TRUSTEES, AND TO ESTATES; TO AMEND SECTION 9-9-50, RELATING TO CREDITED SERVICE FOR MEMBERS OF THE RETIREMENT SYSTEM FOR MEMBERS OF THE GENERAL ASSEMBLY, SO AS TO PROVIDE FOR THE METHOD BY WHICH A MEMBER OF THE SOUTH CAROLINA RETIREMENT SYSTEM WITH PRIOR LEGISLATIVE SERVICE MAY ESTABLISH CREDIT FOR HIS YEARS OF LEGISLATIVE SERVICE; TO AMEND SECTIONS 9-1-1770, 9-8-110, 9-9-100, AND 9-11-120, RELATING TO PAYMENTS OF DEATH BENEFITS FOR PURPOSES OF THE VARIOUS STATE RETIREMENT SYSTEMS, SO AS TO ALLOW DESIGNATION OF MORE THAN ONE BENEFICIARY.

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

Retirement options

SECTION 1. Section 9-1-1620 of the 1976 Code is amended to read:

"Section 9-1-1620. Until the first payment on account of a retirement allowance becomes normally due, any member or beneficiary may elect, by filing with the system, to convert the retirement allowance otherwise payable on his account after retirement into a retirement allowance of equivalent actuarial value under one of the optional forms named below, the retirement allowance under the option selected being due and payable on the date of retirement:

Option 1. A reduced retirement allowance payable during the retired member's life, with the provision that if he dies within ten years from his retirement date, an amount equal to his accumulated contributions at retirement, less one-one hundred twentieth of the amount for each month for which he has received a retirement allowance payment, must be paid to his legal representatives or to the person he nominates by written designation duly acknowledged and filed with the board;

Option 2. A reduced retirement allowance payable during the retired member's life, with the provision that it continues after his death to and for the life of the beneficiary, or the trustee of the beneficiary, nominated by him by written designation duly acknowledged and filed with the board at the time of retirement, if the person survives him;

Option 3. A reduced retirement allowance payable during the retired member's life, with the provision that it continues after his death at one-half the rate paid to him to and for the life of the beneficiary, or the trustee of the beneficiary, nominated by him by written designation duly acknowledged and filed with the board at the time of retirement, if the person survives him;

Option 4. Effective July 1, 1990, a retirement allowance of the amount that, with his benefit under Title II of the Federal Social Security Act, he will receive, so far as possible, approximately the same amount a year before and after the earliest age at which he becomes eligible, upon application therefor, to receive a Social Security benefit. Cost-of-living and other special increases in benefits are not applied to the amount advanced under this option;

Option 5. A member may elect either Option 2 or 3 with the added provision that, if the designated beneficiary predeceases the member, the retirement allowance payable to the member after the designated beneficiary's death must be equal to the retirement allowance which would have been payable had the member not elected the option;

Option 6. A member may elect Option 2 or 3 with the added provision that the reduced retirement allowance after his death must be payable in equal shares to and for the life of each of two or more beneficiaries, or to the trustee or trustees of the beneficiaries, for so long as each beneficiary survives him. The benefit reduction factor must be based on the average age of the beneficiaries.

Any member having elected Option 2, 3, or 5 and nominated his or her spouse to receive a retirement allowance upon the member's death may, after divorce from or death of his or her spouse, revoke the nomination and elect a new option effective on the first day of the month in which the new option is elected, providing for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new option.

The board may approve a five-year pay-out plan developed by the actuary on the basis of the total retirement allowance for surviving beneficiaries, other than a spouse."

Retirement options

SECTION 2. Section 9-9-70 of the 1976 Code is amended to read:

"Section 9-9-70. Until the first payment on account of a retirement allowance becomes normally due, any member or beneficiary may elect, by filing with the system, to convert the retirement allowance otherwise payable on his account after retirement into a retirement allowance of equivalent actuarial value under one of the optional forms named below, the retirement allowance under the option selected being due and payable on the date of retirement.

Option 1. A reduced retirement allowance payable during the retired member's life, with the provision that it continues after his death to and for the life of the beneficiary, or the trustee of the beneficiary nominated by him by written designation duly acknowledged and filed with the board at the time of retirement if the person survives him;

Option 2. A reduced retirement allowance payable during the retired member's life, with the provision that it continues after his death at one-half the rate paid to him to and for the life of the beneficiary or the trustee of the beneficiary nominated by him by written designation duly acknowledged and filed with the board at the time of retirement, if the person survives him;

Option 3. A member may elect either Option 1 or 2 with the added provision that, if the designated beneficiary predeceases the member, the retirement allowance payable to the member after the designated beneficiary's death must be equal to the retirement allowance which would have been payable had the member not elected the option;

Option 4. A member may elect Option 1 or 2 with the added provision that the reduced retirement allowance after his death is payable in equal shares to and for the life of each of two or more beneficiaries, or to the trustee or trustees of the beneficiaries, for so long as each beneficiary survives him. The benefit reduction factor must be based on the average age of the beneficiaries.

Any member having elected Option 1, 2, or 3 and nominated his or her spouse to receive a retirement allowance upon the member's death may, after divorce from or death of his or her spouse, revoke the nomination and elect a new option effective on the first day of the month in which the new option is elected, providing for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new option.

A member may, upon occurrence of a change in his marital status after the date of retirement, revoke the form of payment elected and elect a new option effective on the first day of the month in which the new option is elected, providing for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new option.

The board may approve a five-year pay-out plan developed by the actuary on the basis of the total retirement allowance for surviving beneficiaries, other than a spouse."

Retirement options

SECTION 3. Section 9-11-150 of the 1976 Code is amended to read:

"Section 9-11-150. Until the first payment on account of a retirement allowance becomes normally due, any member or beneficiary may elect, by filing with the system, to convert the retirement allowance otherwise payable on his account after retirement into a retirement allowance of equivalent value under one of the optional forms named below, the retirement allowance under the option selected being due and payable on the date of retirement:

Option 1. A reduced retirement allowance payable during the retired member's life, with the provision that the reduced allowance continues after his death to and for the life of the beneficiary, or to the trustee of the beneficiary, nominated by him by written designation duly acknowledged and filed with the board at the time of retirement, if the person survives him;

Option 2. A reduced retirement allowance payable during the retired member's life, with the provision that it continues after his death at one-half the rate paid to him to and for the life of the beneficiary, or the trustee of the beneficiary, nominated by him by written designation duly acknowledged and filed with the board at the time of retirement, if the person survives him;

Option 3. Effective July 1, 1990, a retirement allowance of the amount that, with his benefit under Title II of the Federal Social Security Act, he will receive, so far as possible, approximately the same amount a year before and after the earliest age at which he becomes eligible, upon application therefor, to receive a Social Security benefit. Cost-of-living and other special increases in benefits are not applied to the amount advanced under this Option;

Option 4. A member may elect either Option 1 or 2 with the added provision that, if the designated beneficiary predeceases the member, the retirement allowance payable to the member after the designated beneficiary's death must be equal to the retirement allowance which would have been payable had the member not elected the option;

Option 5. A member may elect Option 1 or 2 with the added provision that the reduced retirement allowance after his death must be payable in equal shares to and for the life of each of two or more beneficiaries, or to the trustee or trustees of the beneficiaries, for so long as the beneficiary survives him. The benefit reduction factor must be based on the average age of the beneficiaries.

Any member having elected Option 1, 2, or 4 and nominated his or her spouse to receive a retirement allowance upon the member's death may, after divorce from or death of his or her spouse, revoke the nomination and elect a new option effective on the first day of the month in which the new option is elected, providing for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new option."

Payments to beneficiaries

SECTION 4. Article 1, Chapter 1, Title 9 of the 1976 Code is amended by adding:

"Section 9-1-100. Payments made to beneficiaries pursuant to the provisions of this chapter may include payments to a person or persons, trustees, and estates."

Payments to beneficiaries

SECTION 5. Chapter 9, Title 9 of the 1976 Code is amended by adding:

"Section 9-9-220. Payments made to beneficiaries pursuant to the provisions of this chapter may include payments to a person or persons, trustees, and estates."

Payments to beneficiaries

SECTION 6. Article 1, Chapter 11, Title 9 of the 1976 Code is amended by adding:

"Section 9-11-15. Payments made to beneficiaries pursuant to the provisions of this chapter may include payments to a person or persons, trustees, and estates."

Transfer of credit

SECTION 7. (A) Section 9-9-50(2) of the 1976 Code is amended by adding at the end:

"A former member of the General Assembly who is a member of the South Carolina Retirement System may transfer credit from the Retirement System for members of the General Assembly to the South Carolina Retirement System upon payment of an amount equal to four percent of his current salary or the average of his salary in the three highest consecutive years, whichever is greater, for each year of service credited."

(B) The amendment to Section 9-9-50(2) of the 1976 Code in subsection (A) of this section is effective upon approval by the Governor.

Death benefits

SECTION 8. The fifth paragraph of Section 9-1-1770 of the 1976 Code is amended to read:

"Upon the death of a retired member on or after July 1, 1985, 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 death benefit of one thousand dollars if the retired member had ten years of creditable service but less than twenty years, two thousand dollars if the retired member had twenty years of creditable service but less than thirty, and three thousand dollars if the retired member had at least thirty years of creditable service at the time of retirement, provided the retired member's most recent employer prior to retirement is covered by the Group Life Insurance Program."

Death benefits

SECTION 9. The last (unnumbered) paragraph of Section 9-8-110 of the 1976 Code is amended to read:

"Upon the death of a retired member on or after July 1, 1985, 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 death benefit of one thousand dollars if the retired member had ten years of creditable service but less than twenty years, two thousand dollars if the retired member had twenty years of creditable service but less than thirty, and three thousand dollars if the retired member had at least thirty years of creditable service at the time of retirement."

Death benefits

SECTION 10. The last (unnumbered) paragraph of Section 9-9-100 of the 1976 Code is amended to read:

"Upon the death of a retired member on or after July 1, 1985, 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 death benefit of one thousand dollars if the retired member had ten years of creditable service but less than twenty years, two thousand dollars if the retired member had twenty years of creditable service but less than thirty, and three thousand dollars if the retired member had at least thirty years of creditable service at the time of retirement."

Death benefits

SECTION 11. The sixth paragraph of Section 9-11-120 of the 1976 Code is amended to read:

"Upon the death of a retired member on or after July 1, 1985, 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 death benefit of one thousand dollars if the retired member had ten years of creditable service but less than twenty years, two thousand dollars if the retired member had twenty years of creditable service, but less than thirty, and three thousand dollars if the retired member had at least thirty years of creditable service at the time of retirement, provided the retired member's most recent employer prior to retirement is covered by the Group Life Insurance Program."

Time effective

SECTION 12. This act takes effect January 1, 1991, except that Option 4, as contained in Section 9-1-1620 of the 1976 Code and Option 3, as contained in Section 9-11-150 of the 1976 Code, take effect as stated in those options.

Approved the 11th day of April, 1990.