1. Covered Employer Training Program Module One Introduction to the Retirement Systems

2. Contact Information South Carolina Public Employee Benefit Authority (PEBA) Retirement Benefits – 803-737-6800 – 800-868-9002 (within S.C. only) – Website: www.retirement.sc.govwww.retirement.sc.gov – Write to: PO Box 11960 Columbia, SC 29211-1960 Follow along in your Covered Employer Procedures Manual! Page 7

3. Other Resources PEBA Insurance Benefits – PEBA Insurance Benefits 1201 Main Street, Suite 300 Columbia, South Carolina 29201 803-734-0678 888-260-9430 (toll-free) South Carolina Deferred Compensation Program Great-West Retirement Services PO Box 173764 Denver, CO 80217-3764 Phone: 877-457-6263 Fax: 866-745-5766 Express Mail Address: 8515 E. Orchard Road Greenville Village, CO 80111

4. Retirement Plan Types In South Carolina, state, public school, and higher education employees, and individuals first elected to the S.C. General Assembly in November 2012 and after have the choice to participate in the retirement plan that best suits their needs. We offer the following plans to your employees: – South Carolina Retirement System; or – State Optional Retirement Program – Police Officers Retirement System (must meet eligibility requirements)

5. Retirement Plan Types Defined Benefit (DB) Plan – Provides a monthly annuity based on a formula, not on a member’s account balance at retirement. – Examples South Carolina Retirement System (SCRS) Police Officers Retirement System (PORS)

6. Retirement Plan Types Defined Contribution (DC) Plan – Provides a retirement annuity based on the balance in a participant’s account at retirement. – Example State Optional Retirement Program (State ORP) 401(k) or 457 plans such as those offered by the South Carolina Deferred Compensation Program

7. Defined Benefit Plan Advantages SCRS and PORS: – Lifetime annuity – Plan assumes investment risk – Disability protection and incidental death benefit – Benefit adjustments Each July 1, current law provides for a 1 percent benefit adjustment, formerly referred to as cost-of-living adjustment or COLA, up to a maximum of $500

8. Defined Benefit Plan Disadvantages If member terminates and takes refund, the member does not receive employer contributions or earnings on employer contributions. The member has no say in investment decisions. Benefit is reduced if the member retires early.

9. Defined Contribution Plan Advantages State ORP – Participant self-directs and manages investments – Employee and a portion of the employer contributions (5 percent) are posted directly to participant’s account – Participant has immediate rights to both employee and employer contributions upon termination of employment – Active employee incidental death benefit

10. Defined Contribution Plan Disadvantages Participant assumes investment risk No disability protection No benefit adjustment protection Participant bears life expectancy risk

11. Defined Benefit Plan Funding SCRS and PORS – Employers contribute a percentage of payroll for each member – Employees contribute a pre-tax percentage of their salary – Investment returns contribute to funding for SCRS and PORS

12. Defined Benefit Plan Funding Managed by the S.C. Retirement System Investment Commission (RSIC)RSIC Comprised of financial experts and highly qualified, professional investment staff RSIC structures a portfolio with competitive risk and return characteristics comparable to our peers

13. Market Volatility Due to the permanence of governmental pension plans, actuarial smoothing is used to provide a more accurate long- term look at public pension plan investment performance By smoothing returns over a period of years, market volatility, either positive or negative, is moderated over time and required contributions to a plan are predictable and relatively level The current market situation will not impact the South Carolina Public Employee Benefit Authority’s ability to pay benefits

14. Summary Employees have the choice to participate in the retirement plan that best suits their needs. SCRS and PORS retirement benefits are secure and include an annual 1 percent benefit adjustment up to $500. Assets are prudently invested to maximize returns.

15. Disclaimer THE LANGUAGE USED IN THIS PRESENTATION DOES NOT CREATE ANY CONTRACTUAL RIGHTS OR ENTITLEMENTS AND DOES NOT CREATE A CONTRACT BETWEEN THE MEMBER AND THE SOUTH CAROLINA PUBLIC EMPLOYEE BENEFIT AUTHORITY. THE SOUTH CAROLINA PUBLIC EMPLOYEE BENEFIT AUTHORITY RESERVES THE RIGHT TO REVISE THE CONTENT OF THIS PRESENTATION. This presentation is meant to serve as a guide but does not constitute a binding representation of the South Carolina Public Employee Benefit Authority. Title 9 of the South Carolina Code of Laws contains a complete description of the retirement benefits, their terms and conditions, and governs all retirement benefits offered by the state. State statutes are subject to change by the General Assembly. Employers covered by the South Carolina Public Employee Benefit Authority are not agents of the South Carolina Public Employee Benefit Authority.