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Indicates Matter Stricken
Indicates New Matter
Indicates Matter Stricken
Indicates New Matter
AMENDED
May 19, 2005
S. 618
Introduced by Senators Alexander, Setzler, Short, Drummond Verdin and Knotts
S. Printed 5/19/05--S.
Read the first time April 13, 2005.
TO ENACT THE STATE RETIREMENT SYSTEM PRESERVATION AND INVESTMENT REFORM ACT BY AMENDING SECTION 9-1-1790, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE EARNING LIMIT APPLICABLE TO RETIRED MEMBERS OF THE SOUTH CAROLINA RETIREMENT SYSTEM WHO RETURN TO COVERED EMPLOYMENT, SO AS TO REQUIRE THESE MEMBERS TO PAY THE EMPLOYEE CONTRIBUTION FOR ACTIVE MEMBERS; BY AMENDING SECTION 8-11-620, AS AMENDED, RELATING TO LUMP SUM PAYMENTS FOR ANNUAL LEAVE FOR STATE EMPLOYEES, SO AS TO POSTPONE THIS LUMP SUM FOR TERI PARTICIPANTS UNTIL THE EMPLOYEE ENDS TERI PARTICIPATION; BY AMENDING SECTION 9-1-2210, RELATING TO THE TERI PROGRAM, SO AS TO REQUIRE TERI PROGRAM PARTICIPANTS TO PAY THE EMPLOYEE CONTRIBUTION FOR ACTIVE MEMBERS, TO DELAY UNTIL A MEMBER ENDS PARTICIPATION THE INCLUSION OF THE APPLICABLE AMOUNT OF THE MEMBERS UNUSED ANNUAL LEAVE IN THE CALCULATION OF AVERAGE FINAL COMPENSATION, TO PROVIDE FOR THE RECALCULATION OF AVERAGE FINAL COMPENSATION WHEN THE MEMBER ENDS PARTICIPATION IN TERI FOR PURPOSES OF THE MEMBERS' FUTURE RETIREMENT BENEFITS OR OF A BENEFICIARY OF FUTURE BENEFITS ON THE DEATH OF A TERI PARTICIPANT WHO ELECTED A SURVIVOR OPTION, TO PROVIDE THAT A TERI PARTICIPANT UPON ENDING TERI PARTICIPATION MUST LEAVE COVERED EMPLOYMENT AND IS NOT ELIGIBLE TO RETURN TO COVERED EMPLOYMENT WITH THE SOUTH CAROLINA RETIREMENT OR THE SOUTH CAROLINA POLICE OFFICERS RETIREMENT SYSTEM, AND TO PROVIDE EXCEPTIONS FOR CERTAIN TEACHERS AND PRINCIPALS; BY ADDING SECTIONS 9-1-490 AND 9-1-1520 SO AS TO ESTABLISH TWO CLASSES OF SERVICE FOR PERSONS BECOMING SOUTH CAROLINA RETIREMENT SYSTEM MEMBERS AFTER 2005 AND PROVIDE A RETIREMENT OPTION FOR THESE PERSONS AT ANY AGE WITH TWENTY-EIGHT YEARS OF CREDITABLE SERVICE WITH A PENALTY FACTOR FOR THEIR EARLY RETIREMENT, BY AMENDING SECTIONS 9-1-10, 9-1-1020, 9-1-1140, 9-1-1510, 9-1-1515, 9-1-1550, AND 9-1-1660, ALL AS AMENDED, RELATING TO DEFINITIONS, CONTRIBUTIONS, SERVICE CREDIT, RETIREMENT AND EARLY RETIREMENT, AND CALCULATION OF BENEFITS FOR PURPOSES OF THE SOUTH CAROLINA RETIREMENT SYSTEM, SO AS TO CLOSE TWENTY-EIGHT YEARS OF CREDITABLE SERVICE RETIREMENT AT ANY AGE FOR PERSONS BEGINNING PARTICIPATION IN THE SOUTH CAROLINA RETIREMENT SYSTEM AFTER 2005, TO PROVIDE EXCEPTIONS, TO DESIGNATE THOSE PERSONS "GRANDFATHERED" AS SCRS28 PARTICIPANTS, TO DESIGNATE PARTICIPANTS AFTER 2005 AS SCRS30 PARTICIPANTS AND PROVIDE FOR THEIR RETIREMENT QUALIFICATIONS, SERVICE REQUIREMENTS, INCLUDING THE ELECTION OF CLASS B SERVICE WITH A HIGHER MULTIPLIER, HIGHER EMPLOYEE CONTRIBUTIONS, AND PENALTY FOR RETIREMENT BEFORE THIRTY YEARS OF CREDITABLE SERVICE AND TO MAKE CONFORMING AMENDMENTS; BY AMENDING 9-1-1310, AS AMENDED, RELATING TO THE STATE BUDGET AND CONTROL BOARD AS TRUSTEE OF THE STATE RETIREMENT SYSTEM, SO AS TO CONFORM THIS REFERENCE TO THE RETIREMENT SYSTEM INVESTMENT COMMISSION ESTABLISHED IN THIS ACT AND ALLOW EQUITY INVESTMENTS AS PERMITTED IN THE CONSTITUTION OF THIS STATE; BY AMENDING SECTIONS 9-16-10, 9-16-80, AND 9-16-90, RELATING TO DEFINITIONS, MEETINGS, AND REPORTING FOR PURPOSES OF INVESTMENTS OF RETIREMENT SYSTEM FUNDS BY THE STATE BUDGET AND CONTROL BOARD, SO AS TO CONFORM THESE PROVISIONS TO THE ROLE OF THE RETIREMENT SYSTEM INVESTMENT COMMISSION ESTABLISHED IN THIS ACT; BY AMENDING ARTICLE III, CHAPTER 9 OF THE 1976 CODE, SO AS TO REVISE THE DUTIES OF THE STATE RETIREMENT SYSTEMS INVESTMENT PANEL, ESTABLISH THE RETIREMENT SYSTEM INVESTMENT COMMISSION AND PROVIDE FOR ITS MEMBERS, POWERS, AND DUTIES AS TRUSTEE OF THE ASSETS AND INVESTOR OF THE FUNDS OF THE STATE RETIREMENT SYSTEM, CONFORM THE INVESTMENT REQUIREMENTS TO THE ROLE OF THIS COMMISSION INCLUDING THE VESTING IN IT OF ALL INVESTMENT AUTHORITY AND THE ELIMINATION OF A MAXIMUM LIMIT ON EQUITY INVESTMENTS AND ESTABLISH ADDITIONAL STANDARDS OF CONDUCT FOR FIDUCIARIES; BY AMENDING SECTION 8-17-310, AS AMENDED, RELATING TO EXEMPTIONS FROM THE STATE EMPLOYEE GRIEVANCE PROCEDURE ACT, SO AS TO EXEMPT EMPLOYEES OF THE RETIREMENT SYSTEM INVESTMENT COMMISSION; BY AMENDING SECTION 30-4-70, AS AMENDED, RELATING TO MEETINGS EXEMPT FROM THE FREEDOM OF INFORMATION ACT, SO AS TO CONFORM THE EXEMPTION TO THE PROVISIONS OF THIS ACT, TO PROVIDE FOR AN ASSUMED INVESTMENT RETURN ON RETIREMENT SYSTEM ASSETS OF NOT LESS THAN EIGHT PERCENT A YEAR, AND TO PROVIDE TRANSITION PROVISIONS.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. This act may be cited as the State Retirement System Preservation and Investment Reform Act.
SECTION 1. Section 9-1-1790 of the 1976 Code, as last amended by Act 25 of 2001, is further amended by adding a new subsection at the end to read:
"(C) A retired member shall pay to the system the employee contribution for active members 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."
SECTION 2. A. Section 8-11-620(A) of the 1976 Code, as amended by Act 356 of 2002, is further amended to read:
"(A)(1) Upon termination from state employment, an employee may take both annual leave and a lump-sum payment for unused leave, but in no event shall such this combination may not exceed forty-five days in a calendar year except as provided for in Section 8-11-610. If an employee dies, his the employee's legal representative shall be is entitled to a lump-sum payment for his the employee's unused leave, not to exceed forty-five working days, except as provided for in Section 8-11-610.
(2) Upon retirement from state employment or upon the death of an employee if the member does not elect to participate in the Teacher and Employee Retention Incentive Program, a lump-sum payment will be made must be paid for unused leave, not to exceed forty-five days, unless a higher maximum is approved under the provisions of pursuant to Section 8-11-610, and without regard to the earned leave taken during the calendar year in which the employee retires.
(3) Upon retirement from state employment, if the employee participates in the Teacher and Employee Retention Incentive Program, the employee shall not receive payment for unused annual leave until the employee terminates from state employment and ends participation in the Teacher and Employee Retention Incentive Program. Upon termination of state employment and participation in the Teacher and Employee Retention Incentive Program, a lump-sum must be paid for unused leave, not to exceed forty-five days, unless a higher maximum is approved pursuant to Section 8-11-610, and without regard to the earned leave taken during the calendar year in which the employee retires."
B. Section 9-1-2210 of the 1976 Code, as added by Act 1 of 2001, is amended to read:
"Section 9-1-2210. (A) An active contributing member who is eligible for service retirement under this chapter and complies with the requirements of this article may elect to participate in the Teacher and Employee Retention Incentive Program (program). A member electing to participate in the program retires for purposes of the system, and the member's normal retirement benefit is calculated on the basis of the member's average final compensation and service credit at the time the program period begins. The program participant shall agree to continue employment with an employer participating in the system for a program period, not to exceed five years. The member shall notify the system before the beginning of the program period. Participation in the program does not guarantee employment for the specified program period.
(B) After June 30, 2005, and notwithstanding the provisions of Section 9-1-10(4), a payment for unused annual leave is not included in calculating a member's deferred program benefit during the program period. The member's average final compensation for the purpose of calculating the deferred program retirement benefit must be solely the average of the member's highest twelve consecutive quarters of earnable compensation at the time the member enters the program. During the specified program period, receipt of the member's normal retirement benefit is deferred. The member's deferred monthly program benefit must be placed in the system's trust fund on behalf of the member. No interest is paid on the member's deferred monthly program benefit placed in the system's trust fund during the specified program period.
(C) During the specified program period, the employer shall pay to the system the employer contribution for active members prescribed by law with respect to any program participant it employs, regardless of whether the program participant is a full-time or part-time employee, or a temporary or permanent employee. The program participant shall pay to the system the employee contribution for active members. The program participant does not accrue additional service credit in the system. 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.
(D) A program participant is retired from the retirement system as of the beginning of the program period. A program participant makes no further employee contributions to the system, accrues no service credit during the program period, and is not eligible to receive group life insurance benefits or disability retirement benefits. Accrued annual leave and sick leave used in any manner in the calculation of the program participant's retirement benefit is deducted from the amount of such sick leave accrued by the participant.
(E) A program participant is retired for retirement benefit purposes only. For employment purposes, a program participant is considered to be an active employee, retaining all other rights and benefits of an active employee and is not subject to the earnings limitation of Section 9-1-1790 during the program period.
(F) Upon termination of employment either during or at the end of the program period, the member must receive the balance in the member's program account by electing one of the following distribution alternatives:
(1) a lump-sum distribution, paying appropriate taxes; or
(2) to the extent permitted under law, a tax sheltered rollover into an eligible plan.
For members who began participation in the program before July 1, 2005, the member also must receive the previously determined normal retirement benefits based upon the member's average final compensation and service credit at the time the program period began, plus any applicable cost of living increases declared during the program period. The program participant is thereafter subject to the earnings limitation of Section 9-1-1790.
Upon termination of employment of members who began participation in the program after June 30, 2005, the Retirement Systems shall recalculate the average final compensation of the member to determine the benefit the member receives after participation in the program. The average final compensation calculated at the commencement of the program must be increased by: an amount up to and including forty-five days termination pay for unused annual leave received by the member at termination of employment, divided by three. The member's benefit after participation in the program must be calculated in accordance with Section 9-1-1550, utilizing the recalculated average final compensation determined in this subsection, and the member's service credit, including sick leave, as of the date member began participation in the program, plus any cost of living increases declared during the program period with respect to the amount of the member's deferred program benefit.
(G) If a program participant dies during the specified program period, the member's designated beneficiary must receive the balance in the member's program account by electing one of the following distribution alternatives:
(1) a lump-sum distribution, paying appropriate taxes; or
(2) to the extent permitted under law, a tax sheltered rollover into an eligible plan.
In accordance with the form of system benefit selected by the member at the time the program commenced, the member's designated beneficiary must receive either a survivor benefit or a refund of contributions from the member's system account.
If a program participant who began participation in the program before July 1, 2005, elected either Option B or Option C under Section 9-1-1620, the average final compensation calculated when the member commenced the program must be used in determining the survivor benefit.
If a program participant who began participation in the program after June 30, 2005, elected a survivor option, then the survivor shall receive a survivor benefit based on a recalculated average final compensation. The average final compensation calculated at the commencement of the program must be increased by an amount up to and including forty-five days termination pay for unused annual leave received by the member's legal representative at the member's death, divided by three. The survivor benefit must be calculated in accordance with Section 9-1-1550, utilizing the recalculated average final compensation determined in this subsection, and the member's service credit, including sick leave, as of the date the member began participation in the program, plus any cost of living increases declared during the program period with respect to the amount of the member's deferred program benefit.
(H) If a program participant fails to terminate employment with an employer participating in the retirement system within one month after the end of the specified program period, the member must receive the previously determined normal retirement benefits based upon the member's average final compensation and service credit at the time the program began, plus any applicable cost of living increases declared during the program period. The program participant is thereafter subject to the earnings limitation of Section 9-1-1790. The program participant also must receive the balance in the member's program account by selecting one of the following alternatives:
(1) a lump-sum distribution, paying appropriate taxes; or
(2) to the extent permitted under law, a tax sheltered rollover into an eligible plan. (1) A program participant must terminate employment no later than the fifth annual anniversary of the date the member commenced participation in the program.
(2) Notwithstanding Section 9-1-1790 or any other provision of law, a program participant who began TERI participation after June 30, 2005, is ineligible to be employed by an employer covered under this chapter or Chapter 11 of this title except:
(a) a member returning to a position of teacher specialist or principal specialist as provided in Section 59-18-1530;
(b) a certified teacher returning to employment as provided in Section 9-1-1795; or
(c) a teacher who terminates employment during the school year and, with the written approval of the district superintendent, returns to employment to complete the school year.
(I) A member is not eligible to participate in the program if the member has participated previously in and received a benefit under this program or any other state retirement system."
SECTION 3. Section 9-1-1790 (A) of the 1976 Code, as last amended by Act 25 of 2001, is further amended to read:
"(A) A retired member of the system who has been retired for at least sixty days may return to employment covered by the system. and earn up to fifty thousand dollars a fiscal year without affecting the monthly retirement allowance he is receiving from the system. If the retired member continues in service after having earned fifty thousand dollars in a fiscal year, his retirement allowance must be discontinued during his period of service in the remainder of the fiscal 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 the system sooner than sixty 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."
SECTION 4. Section 9-11-90 of the 1976 Code, as last amended by Act 356 of 2002, is further amended by adding a new subsection at the end to read:
"(6) 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 (4)(b) of this section."
SECTION 1. Article 5, Chapter 1, Title 9 of the 1976 Code is amended by adding:
"Section 9-1-495. Effective January 1, 2006, there are two classes of service credit that may be earned by SCRS30 participants: Class A Service and Class B Service. SCRS30 participants shall not participate in SCRS under Class I or Class II membership, but rather will earn either Class A Service or Class B Service. SCRS28 participants shall not earn either Class A Service or Class B Service.
The employer contribution rate for all SCRS30 participants is the same as the employer contribution rate for Class II SCRS28 participants.
An SCRS30 participant of the South Carolina Retirement System who began membership in the system after December 31, 2005, within thirty consecutive days after joining the system, shall file with the system an election form designating whether the member will earn Class A Service or Class B Service. The election form described in this section must be prescribed by the system. If a member fails to make the election specified in this section within the period required by this section, the member is considered to have elected to earn Class A Service."
SECTION 2. Article 13, Chapter 1, Title 9 of the 1976 Code is amended by adding:
"Section 9-1-1520. (A) In addition to other types of retirement provided by this chapter, an SCRS30 participant may elect early retirement if the SCRS30 participant:
(1) has five or more years of earned service;
(2) has at least twenty-eight years of creditable service; and
(3) has separated from service.
A member electing early retirement shall apply in the manner provided in Section 9-1-1510.
(B) The benefits for an SCRS30 participant 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 SCRS30 participant's early retirement allowance is reduced by twelve percent a year, prorated for periods less than one year, for each year of creditable service less than thirty years.
(C) An SCRS30 participant who elects early retirement under this section is ineligible to receive any cost-of-living increase provided by law to retirees until the earlier of the:
(1) second July first after the date the SCRS30 participant attains age sixty; or
(2) second July first after the date an SCRS30 participant would have thirty years creditable service had he not retired."
SECTION 3. A. Section 9-1-10(18) of the 1976 Code, as last amended by Act 387 of 2000, is further amended to read:
"(18) 'Member' means a teacher or employee included in the membership of the system as provided in Article 5 of this chapter. The term member includes SCRS28 participants and SCRS30 participants."
B. Section 9-1-10 of the 1976 Code, as last amended by Act 77 of 2003, is further amended by adding two new items at the end to read:
"(31) 'SCRS28 participant' means a member of the South Carolina Retirement System who began membership in the system before January 1, 2006, and had contributions on account with the system as of December 31, 2005. However, an active contributing participant in the State Optional Retirement Program as of December 31, 2005, may become an SCRS28 participant in the system if the participant is eligible to join the South Carolina Retirement System pursuant to Section 9-20-40(B) during the open enrollment period from January 1, 2006, through March 1, 2006, and elects to join the system no later than March 1, 2006. If a member of the South Carolina Retirement System who had contributions on account with the system as of December 31, 2005, withdraws those contributions after December 31, 2005, the member is no longer an SCRS28 participant and upon subsequently rejoining the system, shall join the system as an SCRS30 participant.
(32) 'SCRS30 participant' means a member of the South Carolina Retirement System who began membership in the system after December 31, 2005. However, an active contributing participant in the State Optional Retirement Program as of December 31, 2005, may become an SCRS28 participant of the system if the participant is eligible to join the South Carolina Retirement System under Section 9-20-40(B) during the open enrollment period from January 1, 2006 to March 1, 2006, and elects to join the system no later than March 1, 2006. If a member of the South Carolina Retirement System who had contributions on account with the system as of December 31, 2005, withdraws those contributions after December 31, 2005, the participant is no longer an SCRS28 participant and subsequently upon rejoining the system, shall join the system as an SCRS30 participant."
SECTION 4. The third undesignated paragraph of Section 9-1-1020 of the 1976 Code, as last amended by Act 475 of 1988, is further amended to read:
"The rates of the deductions must be, without regard to a member's coverage under the Social Security Act, as follows:
(a) in the case of Class One members SCRS28 participants, five percent of earnable compensation; and
(b) in the case of Class Two members SCRS28 participants and SCRS30 participants earning Class A Service, six percent of earnable compensation; and
(c) in the case of SCRS30 participants earning Class B Service, eight and sixty-six hundredths percent of earnable compensation."
SECTION 5. Section 9-1-1140 of the 1976 Code, as last amended by Act 77 of 2003, is further amended by adding three new subsections at the end to read:
"(N) An active member who is an SCRS30 participant may establish Class A Service for the same types of service, at the same cost, and under the same conditions provided in items (A) through (M) of this section.
(O) An active member who is an SCRS30 participant may establish Class B Service for the same types of service and under the same conditions provided in items (A) through (M) of this section, however, the cost for each type of service purchased as Class B Service under this subsection must be determined by the board, based on the recommendation of the system's actuary.
(P) An active member who is an SCRS30 participant and is currently earning Class B Service, may convert the member's Class A Service into Class B Service by paying an amount to be determined by the board, based on the recommendation of the system's actuary."
SECTION 6. Section 9-1-1510 of the 1976 Code, as last amended by Act 1 of 2001, is further amended to read:
"Section 9-1-1510. (A) A member An SCRS28 participant 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 SCRS28 participant desires to be retired, if the member SCRS28 participant 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) An SCRS30 participant 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 SCRS30 participant desires to be retired, if the SCRS30 participant 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 thirty or more years of creditable service; 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."
SECTION 7. Subsections (B) and (C) of Section 9-1-1515 of the 1976 Code, as last amended by Act 1 of 2001, are further amended to read:
"(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 for SCRS28 participants and thirty for SCRS30 participants.
(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 earlier of the:
(1) second July first after the date the member attains age sixty; or
(2) second July first after the date the member an SCRS28 participant would have twenty-eight years creditable service had he not retired, whichever is earlier or the date an SCRS30 participant would have thirty years creditable service had he not retired."
SECTION 8. Section 9-1-1550 of the 1976 Code, as last amended by Act 1 of 2001, is further amended to read:
"Section 9-1-1550. (A) Upon retirement from service on or after July 1, 1964, a Class One member SCRS28 participant 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 SCRS28 participant 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 SCRS28 participant'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 SCRS28 participant 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 SCRS28 participant shall receive a service retirement allowance computed as follows:
(1) If the member SCRS28 participant'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 SCRS28 participant'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 SCRS28 participant 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 December 31, 2005, an SCRS30 participant shall receive a service retirement allowance computed as follows:
(1) If an SCRS30 participant's service retirement date occurs on or after his sixty-fifth birthday or after he has completed thirty or more years of creditable service, the allowance must be equal to the sum of:
(a) one and eighty-two hundredths percent of his average final compensation, multiplied by the number of years of his Class A Service; and
(b) two and thirty-nine hundredths percent of his average final compensation, multiplied by the number of years of his Class B Service.
(2) If an SCRS30 participant's service retirement date occurs before his sixty-fifth birthday and before he completes the thirty 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."
SECTION 9. Section 9-1-1660(A)(3) of the 1976 Code, as last amended by Act 387 of 2000, is further amended to read:
"(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 an SCRS28 participant under age sixty with less than twenty-eight years credit is assumed to be sixty years of age. For purposes of the benefit calculation, an SCRS30 participant under age sixty with less than thirty years credit is assumed to be sixty years of age."
SECTION 1. A. Section 9-1-1310 of the 1976 Code is amended to read:
"Section 9-1-1310. (A) The board is the trustee of the funds of the retirement system, as 'retirement system' is defined in Section 9-16-10(8). The Retirement Systems Investment Commission and may shall invest and reinvest the funds of the retirement system as 'retirement system' is defined in Section 9-16-10(8), subject to all the terms, conditions, limitations, and restrictions imposed by Article 7, Chapter 9, Title 11, upon the investment of sinking funds of the State, and, subject to like terms, conditions, and limitation, and restrictions, may hold, purchase, sell, assign, transfer, and dispose of any of the securities and investments in which the funds created in this chapter have been invested, plus the proceeds of these investments and any monies belonging to these funds. Additionally, and without regard to the limitations imposed pursuant to Article 7, Chapter 9, Title 11, the board may invest and reinvest the funds of the system in equity securities of a corporation within the United States that is registered on a national stock exchange as provided in the Securities Exchange Act, 1934, or a successor act, or quoted through the National Association of Securities Dealers Automatic Quoting System, or similar service Section 16, Article X of the South Carolina Constitution, subsection (B) of this section, and Chapter 16 of this Title.
(B) Except as prohibited by Section 16, Article X of the South Carolina Constitution and Chapter 16 of this Title, the funds of the system may be invested in, including but not limited to, the following:
(1) bonds of this State, other states of the United States, the United States, or any political subdivisions or agency thereof;
(2) banks and savings and loan institutions;
(3) top-rated commercial paper;
(4) funds of funds;
(5) foreign certificates of deposit;
(6) short-term debt;
(7) investment trust securities;
(8) real estate securities;
(9) foreign fixed-income obligations;
(10) futures and options regulated by the United States Securities and Exchange Commission;
(11) private equity;
(12) domestic and foreign group trusts;
(13) investment vehicles of Federal Deposit Insurance;
(14) bonds of foreign countries designated industrialized by the International Monetary Fund;
(15) collateralized mortgage obligations;
(16) World Bank bonds;
(17) debt of the United States or Canadian corporations collateralized at least fifty percent;
(18) equipment trust debt;
(19) purchase money mortgages received for real estate; or
(20) real estate investment trusts.
(C) The funds and assets of the various state retirement systems are not funds of the State, but are instead held in trust as provided in Section 9-16-20."
B. Section 9-1-1340 of the 1976 Code is amended to read:
"Section 9-1-1340. Except as otherwise herein provided in this chapter or in Chapters 8, 9, and 11 of this Title, no member of or person employed by the Board Retirement Systems Investment Commission shall have any direct interest in the gains or profits of any investment made by the Board commission. No Board commission member or employee of the Board commission shall, directly or indirectly, for himself or as an agent in any manner use the funds of the Board commission except to make such current and necessary payments as are authorized by the board or commission. Nor shall any member or employee of the Board commission become an endorser or surety or in any manner an obligor for moneys monies loaned or borrowed from the Board commission."
C. Sections 9-8-160, 9-9-150, and 9-11-240 of the 1976 Code are repealed.
SECTION 2. Article 1, Chapter 16, Title 9 of the 1976 Code, as added by Act 371 of 1998, is amended to read:
Section 9-16-10. As used in this chapter, unless a different meaning is plainly required by the context:
(1) 'Assets' means all funds, investments, and similar property of the retirement system.
(2) 'Beneficiary' means a person, other than the participant, who is designated by a participant or by a retirement program to receive a benefit under the program.
(3) 'Board' means the State Budget and Control Board acting as trustee of the retirement system.
(3.5) 'Commission' means the Retirement Systems Investment Commission.
(4) 'Fiduciary' means a person who:
(a) exercises any authority to invest or manage assets of a system;
(b) provides investment advice for a fee or other direct or indirect compensation with respect to assets of a system or has any authority or responsibility to do so; or
(c) is a member of the State Budget and Control Board when it acts as trustee for the retirement system. is a member of the commission; or
(d) is the commission's chief investment officer.
(5) 'Participant' means an individual who is or has been an employee enrolled in a retirement program and who is or may become eligible to receive or is currently receiving a benefit under the program. The term does not include an individual who is no longer an employee of an employer as defined by laws governing the retirement system and who has withdrawn his contributions from the retirement system.
(6) [Reserved] "Panel" means the State Retirement Systems Investment Panel established pursuant to Section 9-16-310.
(7) 'Retirement program' means a program of rights and obligations which a retirement system establishes or maintains and which, by its express terms or as a result of surrounding circumstances:
(a) provides retirement benefits to qualifying employees and beneficiaries; or
(b) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond.
(8) 'Retirement system' means the South Carolina Retirement System, Retirement System for Judges and Solicitors, Retirement System for Members of the General Assembly, and Police Officers Retirement System established pursuant to Chapters 1, 8, 9, and 11 of this Title.
(9) 'Trustee' means the State Budget and Control Board.
Section 9-16-20. (A) All assets of a retirement system are held in trust. The trustee commission has the exclusive authority, subject to this chapter and Section 9-1-1310, to invest and manage those assets.
(B) If the retirement system invests in a security issued by an investment company registered under the Investment Company Act of 1940 (15 U.S.C. Section 80a-1, et seq.), the assets of the system include the security, but not assets of the investment company.
Section 9-16-30. (A) The trustee commission may delegate functions that a prudent trustee person acting in a like capacity and familiar with those matters could properly delegate under the circumstances but final authority to invest cannot be delegated.
(B) The trustee commission shall exercise reasonable care, skill, and caution in:
(1) selecting an agent;
(2) establishing the scope and terms of the delegation, consistent with the purposes and terms of the retirement program; and
(3) periodically reviewing the agent's performance and compliance with the terms of the delegation.
(C) In performing a delegated function, an agent owes a duty to the retirement system and to its participants and beneficiaries to comply with the terms of the delegation and, if a fiduciary, to comply with the duties imposed by Section 9-16-40.
(D) A trustee commission member who complies with subsections (A) and (B) is not liable to the retirement system or to its participants or beneficiaries for the decisions or actions of the agent to whom the function was delegated.
(E) By accepting the delegation of a function from the trustee commission, an agent submits to the jurisdiction of the courts of this State.
(F) A trustee The commission may limit the authority of an agent to delegate functions under this section.
Section 9-16-40. A trustee, commission member, or other fiduciary shall discharge duties with respect to a retirement system:
(1) solely in the interest of the retirement systems, participants, and beneficiaries;
(2) for the exclusive purpose of providing benefits to participants and beneficiaries and paying reasonable expenses of administering the system;
(3) with the care, skill, and caution under the circumstances then prevailing which a prudent person acting in a like capacity and familiar with those matters would use in the conduct of an activity of like character and purpose;
(4) impartially, taking into account any differing interests of participants and beneficiaries;
(5) incurring only costs that are appropriate and reasonable; and
(6) in accordance with a good faith interpretation of this chapter.
Section 9-16-50. (A) In investing and managing assets of a retirement system pursuant to Section 9-16-40, the trustee commission:
(1) shall consider among other circumstances:
(a) general economic conditions;
(b) the possible effect of inflation or deflation;
(c) the role that each investment or course of action plays within the overall portfolio of the retirement system;
(d) needs for liquidity, regularity of income, and preservation or appreciation of capital; and
(e) the adequacy of funding for the plan based on reasonable actuarial factors;
(2) shall diversify the investments of the retirement system unless the trustee commission reasonably determines that, because of special circumstances, it is clearly prudent not to do so;
(3) shall make a reasonable effort to verify facts relevant to the investment and management of assets of a retirement system;
(4) may invest in any kind of property or type of investment consistent with this chapter and Section 9-1-1310;
(5) may consider benefits created by an investment in addition to investment return only if the trustee commission determines that the investment providing these collateral benefits would be prudent even without the collateral benefits.
(B) The trustee commission shall adopt a statement of investment objectives and policies for the retirement system. The statement must include the desired rate of return on assets overall, the desired rates of return and acceptable levels of risk for each asset class, asset-allocation goals, guidelines for the delegation of authority, and information on the types of reports to be used to evaluate investment performance. At least annually, the trustee commission shall review the statement and change or reaffirm it. The relevant portion of this statement may constitute parts of the annual investment plan required pursuant to Section 9-16-330.
Section 9-1-60. (A) Compliance by the trustee, commission, or other fiduciary with Sections 9-16-30, 9-16-40, and 9-16-50 must be determined in light of the facts and circumstances existing at the time of the trustee's, commission's, or fiduciary's decision or action and not by hindsight.
(B) The trustee's commission's investment and management decisions must be evaluated not in isolation but in the context of the trust portfolio as a whole and as a part of an overall investment strategy having risk and return objectives reasonably suited to the retirement system.
Section 90-16-70. (A) The trustee A commission member or other fiduciary who breaches a duty imposed by this chapter is personally liable to the retirement system for any losses resulting from the breach and any profits resulting from the breach or made by the trustee commission member or other fiduciary through use of assets of the system by trustees the commission member or other fiduciary. The trustee commission member or other fiduciary is subject to other equitable remedies as the court considers appropriate, including removal.
(B) An agreement that purports to limit the liability of a trustee or other fiduciary for a breach of duty under this chapter is void.
(C) The retirement system may insure a trustee, commission member, fiduciary, or itself against liability or losses occurring because of a breach of duty under this chapter.
(D) A trustee, commission member, or other fiduciary may insure against personal liability or losses occurring because of a breach of duty under this chapter if the insurance is purchased or provided by the individual trustee, commission member, or fiduciary, but a fiduciary who obtains insurance pursuant to this chapter must disclose all terms, conditions, and other information relating to the insurance policy to the retirement system.
Section 9-16-80. (A) Meetings by the board while acting as trustee of the retirement system, or meetings of the commission, or by its fiduciary agents to deliberate about, or make tentative or final decisions on, investments or other financial matters may be in executive session if disclosure of the deliberations or decisions would jeopardize the ability to implement a decision or to achieve investment objectives.
(B) A record of the board, or commission, or of its fiduciary agents that discloses deliberations about, or a tentative or final decision on, investments or other financial matters is exempt from the disclosure requirements of Chapter 4 of Title 30, the Freedom of Information Act, to the extent and so long as its disclosure would jeopardize the ability to implement an investment decision or program or to achieve investment objectives.
Section 9-16-90. (A) The trustees commission shall provide investment reports at least quarterly during the fiscal year to the panel State Budget and Control Board, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, and other appropriate officials and entities.
(B) In addition to the quarterly reports provided in subsection (A), the trustees commission shall provide an annual report to the panel State Budget and Control Board, the Speaker of the House of Representatives, members of the House of Representatives or Senate, but only upon their request, the President Pro Tempore of the Senate, and other appropriate officials and entities of the investment status of the retirement systems. The report must contain:
(1) a description of a material interest held by a trustee, fiduciary, or an employee who is a fiduciary with respect to the investment and management of assets of the system, or by a related person, in a material transaction with the system within the last three years or proposed to be effected;
(2) a schedule of the rates of return, net of total investment expense, on assets of the system overall and on assets aggregated by category over the most recent one-year, three-year, five-year, and ten-year periods, to the extent available, and the rates of return on appropriate benchmarks for assets of the system overall and for each category over each period;
(3) a schedule of the sum of total investment expense and total general administrative expense for the fiscal year expressed as a percentage of the fair value of assets of the system on the last day of the fiscal year, and an equivalent percentage for the preceding five fiscal years; and
(4) a schedule of all assets held for investment purposes on the last day of the fiscal year aggregated and identified by issuer, borrower, lessor, or similar party to the transaction stating, if relevant, the asset's maturity date, rate of interest, par or maturity value, number of shares, costs, and fair value and identifying an asset that is in default or classified as uncollectible.
These disclosure requirements are cumulative to and do not replace other reporting requirements provided by law."
SECTION 3. Article 3, Chapter 16, Title 9 of the 1976 Code is amended to read:
Section 9-16-310. There is created the State Retirement Systems Investment Panel, consisting of five members, one each appointed by the Governor, State Treasurer, Comptroller General, the chairman of the Ways and Means Committee of the House of Representatives, and the chairman of the Senate Finance Commission. The member appointed by the Governor shall serve as chairman. All members appointed to the panel must possess substantial financial investment experience. No person may be appointed or continue to serve who is an elected or appointed officer or employee of the State or any of its political subdivisions, including school districts. Members shall serve for terms of two years and until their successors are appointed and qualify. Vacancies must be filled for the unexpired term in the manner of the original appointment. Members shall serve without compensation, but may receive the mileage, subsistence, and per diem authorized by law for members of state boards, commissions, and committees as a retirement system expense to be paid from approved accounts of the retirement system. The panel shall advise the chief investment officer of the Retirement System Investment Commission in the preparation of the annual investment plan in the manner that the chief investment officer determines appropriate.
Section 9-16-315. (A) There is established the Retirement System Investment Commission (RSIC) consisting of six members as follows:
(1) one member appointed by the Governor;
(2) one member appointed by the State Treasurer;
(3) one member appointed by the Comptroller General;
(4) one member appointed by the chairman of the Senate Finance Committee;
(5) one member appointed by the chairman of the Ways and Means Committee of the House of Representatives;
(6) one member who is a retired member of the retirement system who shall serve without voting privileges. This representative member must be appointed by unanimous vote of the voting members of the commission.
Members shall serve for terms of five years and until their successors are appointed and qualify, except that of those first appointed, the appointees of the Comptroller General and the chairman of the Senate Finance Committee shall serve for terms of three years and the appointee of the chairman of the Committee on Ways and Means and the representative appointee shall serve for terms of one year. Terms are deemed to expire after June thirtieth of the year in which the term is due to expire. Members are appointed for a term and may be removed before the term expires only by the Governor for the reasons provided in Section 1-3-240(C).
The commission shall select one of the voting members to serve as chairman and shall select those other officers it determines necessary.
(B) Each member shall receive three thousand dollars quarterly as compensation for his service on the commission during the preceding three months. Each member is allowed the mileage, subsistence, and per diem allowed by law for members of state boards, committees, and commissions.
(C) A person may not be appointed to the commission unless the person possesses at least one of the following qualifications:
(1) the Chartered Financial Analyst credential of the CFA Institute;
(2) the Certified Financial Planner credential of the Certified Financial Planner Board of Standards;
(3) at least ten years professional securities broker experience;
(4) at least ten years professional actuarial experience;
(5) at least ten years professional teaching experience in economics or finance; or
(6) an earned Ph.D. in economics or finance.
No person may be appointed or continue to serve who is an elected or appointed officer or employee of the State or any of its political subdivisions, including school districts.
(D) The Retirement System Investment Commission is established to invest the funds of the retirement system. All of the powers and duties of the State Budget and Control Board as investor in equity securities and the State Treasurer's function of investing in fixed income instruments are transferred to and devolved upon the Retirement System Investment Commission. To assist the commission in its investment function, it shall employ a chief investment officer, who under the direction and supervision of the commission, and as its agent, shall develop and maintain annual investment plans and invest and oversee the investment of retirement system funds. The chief investment officer serves at the pleasure of the commission and must receive the compensation the commission determines appropriate. The commission may employ the other professional, administrative, and clerical personnel it determines necessary and fix their compensation. All employees of the commission are employees-at-will. The compensation of the chief investment officer and other employees of the commission is not subject to the state compensation plan.
(E) The administrative costs of the Retirement System Investment Commission must be paid from the earnings of the state retirement system in the manner provided in Section 9-1-1310.
Section 9-16-320. (A) The panel commission shall meet no later than May first of each year to adopt the proposed annual investment plan for the retirement systems for the next fiscal year. The annual investment plan must be developed by the panel chief investment officer. No later than June April first of each year, the panel chief investment officer shall submit the proposed plan to the board commission. Amendments may be made to the plan by the panel commission during the fiscal year with the approval of the board.
(B) The panel commission shall meet at least once during each fiscal year quarter for the purposes of reviewing the performance of investments, assessing compliance with the annual investment plan, and determining whether to recommend amendments to amend the plan to the board. The panel commission shall meet at such other times as are set by the panel commission or the chairman or requested by the board.
(C) The panel commission may discuss, deliberate on, and make decisions on a portion of the annual investment plan or other related financial or investment matters in executive session if disclosure thereof would jeopardize the ability to implement that portion of the plan or achieve investment objectives.
(D) A record of the panel or of the Retirement System commission that discloses discussions, deliberations, or decisions on portions of the annual investment plan or other related financial or investment matters is not a public record under Section 30-4-20 to the extent and so long as its disclosure would jeopardize the ability to implement that portion of the plan or achieve investment objectives.
(E) [Reserved] The costs of administering the duties of the panel must be paid from the investment earnings of these systems. Administrative and clerical assistance to the panel must be provided. The board must approve all reasonable expenses of the panel in performing its duties under this section.
(F) [Reserved] The panel does not act as a fiduciary with respect to the funds of the retirement system, but must exercise reasonable care and skill in carrying out its duties.
(G) The panel commission may retain independent advisors to assist it and periodically shall provide for an outside evaluation of the investment strategy of the board.
Section 9-16-330. (A) The board commission shall provide the panel chief investment officer with a statement of general investment objectives. The commission shall also provide the chief investment officer with a statement of actuarial assumptions and general investment objectives developed by the system's actuary and approved by the board. The board commission shall review the statement of general investment objectives annually for the purpose of affirming or changing it and advise the panel chief investment officer of its actions. The Retirement System shall provide the commission and its chief investment officer that data or other information needed to prepare the annual investment plan.
(B) The annual investment plan must be consistent with actions taken by the board commission pursuant to subsection (A) and must include, but is not limited to, the following components:
(1) general operational and investment policies;
(2) investment objectives and performance standards;
(3) investment strategies, which may include indexed or enhanced indexed strategies as the preferred or exclusive strategies for equity investing, and an explanation of the reasons for the selection of each strategy;
(4) industry sector, market sector, issuer, and other allocations of assets that provide diversification in accordance with prudent investment standards, including desired rates of return and acceptable levels of risks for each asset class;
(5) policies and procedures providing flexibility in responding to market contingencies;
(6) procedures and policies for selecting, monitoring, compensating, and terminating investment consultants, equity investment managers, and other necessary professional service providers; and
(7) methods for managing the costs of the investment activities.
(C) In developing the annual investment plan, the panel chief investment officer shall:
(1) diversify the investments of the retirement systems, unless the panel commission reasonably determines that, because of special circumstances, it is clearly not prudent to do so; and
(2) make a reasonable effort to verify facts relevant to the investment of assets of the retirement systems.
Section 9-16-340. (A) The State Budget and Control Board commission, as trustee of the retirement system, acting through the chief investment officer shall invest and reinvest the assets of the retirement systems as provided in Section 9-1-1310. The State Treasurer shall serve as the agent of the board with respect to investments made pursuant to Article 7, Chapter 9, Title 11. Investments allowed by law in equities may be made by the board in the manner it shall determine, consistent with Section 9-16-330 and consistent with its fiduciary duties with respect to the retirement funds. The board commission may employ or retain administrators, agents, consultants, or other advisors it considers necessary with respect to making equity investments. The board is subject to the provisions of Chapter 23 of Title 1, the Administrative Procedures Act, in the implementation of this article The chief investment officer may use the services of the State Treasurer in making nonequity security investments as the chief investment officer determines appropriate.
(B) After receiving the proposed plan of the panel chief investment officer, the board commission shall adopt an annual investment plan, which must be implemented by the board commission through the chief investment officer. The board commission shall regularly review the plan implementation and makes amendments as it considers appropriate. The plan must include the minimum and maximum portions of system assets that may be allocated to equity investments on an ongoing basis not to exceed seventy percent.
(C) The plan adopted must provide:
(1) the minimum and maximum portions of system assets that may be allocated to equity investments on an ongoing basis not to exceed forty percent and the minimum and maximum portions of system assets not to exceed ten percent that may be allocated to additional equity investment during the plan fiscal year. When investments in equities attain the maximum allocation allowed by this item, up to forty percent of current member and employer contributions to the retirement system may be invested in equities. If, due to growth in value of equity investments, equity investments exceed forty percent of the total assets of the retirement system, this subsection does not require the sale of equities to reduce the percentage of equities to forty percent;
(2) preference to brokerage firms domiciled in this State for conducting nondiscretionary brokerage transactions if these brokerage firms are able to meet the test of equal service and best execution in the purchase and sale of authorized investments.
Section 9-16-345. In hiring and procurement, and consistent with its duties as trustee and fiduciary, the commission shall strive to assure that minorities and minority-owned businesses are represented.
Section 9-16-350. (A) It is unlawful for a member, employee, or agent of the panel commission or anyone acting on his behalf to use any information concerning panel commission activities to obtain any economic interest for himself, a member of his immediate family, an individual with whom he is associated, or a business with which he is associated.
(B) If a member of the panel commission, an employee of the panel commission, or a member of his immediate family holds an economic interest in a blind trust, he is not considered to have violated the provisions of subsection (A) even if the acquisition of the economic interest by the blind trust would otherwise violate the provisions of subsection (A), if the existence of the blind trust and the manner of its control is disclosed to the State Ethics Commission and the Budget and Control Board commission.
(C) A person who violates the provisions of this section is guilty of a felony and, upon conviction, must be imprisoned for not more than ten years and fined not more than one hundred thousand dollars.
(D) The provisions of this section are cumulative to, and not in lieu of, any other provisions of law applicable to the panel commission and its members in the performance of official duties including, but not limited to, Chapter 13 of Title 8.
Section 9-16-360. (A) In addition to and not in lieu of the provisions of Section 9-16-350 and Chapter 13 of Title 8, and for the purposes of this article, there are the standards of conduct provided in subsection (B) of this section that apply for a fiduciary or employee of a fiduciary.
(B) A fiduciary or employee of a fiduciary shall:
(1) take no action to purchase or acquire services or property for the commission or the retirement system where the fiduciary or employee of the fiduciary, their family, or their business associates have a financial interest in the services or property;
(2) take no action to invest retirement system funds in any share, or other security if the fiduciary or employee of the fiduciary, their family, or their business associates have an interest in, are underwriters of, or receive any fees from the investment;
(3) have no interest in the profits or receive any benefit from a contract entered into by the fiduciary;
(4) not use their positions to secure, solicit, or accept things of value, including gifts, travel, meals and lodging, and consulting fees for payment for outside employment, from parties doing or seeking to do business with or interested in matters before the fiduciary;
(5) not represent, while serving as or in the employment of the fiduciary and for one year after leaving the fiduciary, any person, in any fashion, before any public agency, with respect to any matters in which the fiduciary personally participated while serving as or employed by the fiduciary;
(6) not take any official action on matters that will result in a benefit to themselves, their family members, or their business associates;
(7) not, during or after their term of service, disclose or use confidential information acquire in their official capacity as fiduciary or employee of the fiduciary, without proper authorization;
(8) not use assets of the system for their own interests;
(9) not act on behalf of a party whose interests are adverse to the system or the fiduciary, even if the member receives no personal gain;
(10) not have any direct or indirect interest in the gains or profits of any system investment;
(11) not make investments through or purchases from, or otherwise do any business with a former fiduciary member or employee or with a business that is owned or controlled by a former fiduciary member or employee, for a period of three years after the fiduciary member or employee leaves the fiduciary.
(C) A breach of the standards provided in this section is grounds for the removal of a commission member as a conflict of interest pursuant to the Governor's removal powers under Section 1-3-240(C), for the dismissal of an employee of the commission, and in the case of a corporate fiduciary, at the commission's option, voiding any contract with the fiduciary."
SECTION 4. Section 8-17-370 of the 1976 Code, as last amended by Act 356 of 2002, is further amended by adding an appropriately numbered item at the end to read:
"( ) the chief investment officer and all other employees of the Retirement System Investment Commission."
SECTION 5. Section 30-4-70(a)(6) of the 1976 Code, as added by Act 371 of 1998, is amended to read:
"(6) The State Budget and Control Board, while meeting as the trustee of the State Retirement System, or of the State Retirement Systems Investment Panel Retirement System Investment Commission, if the meeting is in executive session specifically pursuant to Section 9-16-80(A) or 9-16-320(C)."
SECTION 6. Section 11-13-30 of the 1976 Code is amended to read:
"Section 11-13-30. To facilitate the management, investment, and disbursement of public funds, no board, commission, agency or officer within the State government, except the State Treasurer shall be authorized to may invest and deposit funds from any source, including, but not limited to, funds for which he is custodian, such funds to draw the best rate of interest obtainable.
This section does not apply to the Retirement Systems Investment Commission with respect to the investment of funds of the retirement system as defined in Section 9-16-10(8)."
SECTION 7. Upon implementation of the provisions of this part, it is the intent of the General Assembly that the Retirement System Investment Commission shall seek to maximize the rate of return on retirement system assets.
SECTION 8. Notwithstanding the general effective date provided for this act, the transfer of the investor functions provided by this part occur October 1, 2005. Notwithstanding the provisions of this part, the commission established by this part shall adopt and implement an interim investment plan for the period October 1, 2005, through June 30, 2006.
SECTION 1. (A) Beginning October 1, 2005, all assets and liabilities, appropriations, FTE's, employees, contracts, real and personal property, records, and archives of the State Budget and Control Board with respect to its investment duties for the various state retirement systems are transferred to and devolved upon the Retirement Systems Investment Commission.
(B) It is the intention of the General Assembly that the transfer required by this act occur seamlessly, and to this end, the Executive Director of the State Budget and Control Board and the State Treasurer shall insure an orderly transfer that allows no hiatus in the investment of the funds of the retirement systems.
SECTION 1. If any part, section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every part, section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other parts, sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 1. This act takes effect July 1, 2005.
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