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

2. Contact Information South Carolina Retirement Systems 803-737-6800 800-868-9002 (within SC 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 2

3. Other Resources Employee Insurance Program (EIP) Employee Insurance Program 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 Greenwood Village, CO 80111 Page 89

4. Retirement Plan Types In South Carolina, state, public school, and higher education employees 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) Page 5

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

6. Retirement Plan Types Defined Contribution (DC) Plan Provides a retirement benefit 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 Page 5

7. Defined Benefit Plan Advantages SCRS and PORS: Lifetime benefit guaranteed by law and pre-funded Plan assumes investment risk Disability protection and incidental death benefit Cost-of-living adjustments (COLA) Each July 1, eligible retirees receive an automatic COLA equal to the percentage of the annual increase in the Consumer Price Index for Wage Earners and Clerical Workers (CPI-W) as of the previous December 31, up to an increase of 2 percent. If CPI-W is less than 2 percent, the COLA will equal the actual increase in the CPI-W. COLAs only paid during periods of inflation. Page 5

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. Page 5

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 Page 5

10. Defined Contribution Plan Disadvantages Participant assumes investment risk No disability protection No COLA protection Participant bears life expectancy risk Page 5

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 Page 21

12. Defined Benefit Plan Funding Managed by the SC Retirement System Investment Commission (RSIC)RSIC Comprised of financial experts and highly qualified, professional investment staff Recent legislative changes have enabled the RSIC to structure a portfolio with competitive risk and return characteristics comparable to our peers RSIC’s goal is for the Retirement Systems’ investment performance to rank among the best state retirement plans in the nation

13. Market Volatility Market volatility often creates buying opportunities and we use periods such as this to take advantage of reduced asset prices 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 Retirement Systems’ ability to pay benefits

14. Economic Impact of Our Plans We disburse more than $2 billion in benefits annually, which is more than the personal income derived in the Palmetto State each year from farming, forestry, fishing, and utilities, combined.* Approximately 94 percent of our annuitants reside in South Carolina. A recent study revealed that DB plans can deliver the same retirement income to a group of employees at 46 percent lower cost than individual DC accounts.** *Based on US Bureau of Economic Analysis data for 2007. **The study, “A Better Bang for the Buck: The Economic Efficiencies of Defined Benefit Pension Plans,” was published August 14, 2008, by the National Institute on Retirement Security.

15. 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 RETIREMENT SYSTEMS. THE SOUTH CAROLINA RETIREMENT SYSTEMS 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 Retirement Systems. The statutes governing the South Carolina Retirement Systems are found in Title 9 of the South Carolina Code of Laws, and should there be any conflict between this presentation and the statutes or Retirement Systems’ policies, the statutes and policies will prevail. Employers covered by the South Carolina Retirement Systems are not agents of the Retirement Systems. Disclaimer

16. 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 automatic annual COLA up to an increase of 2 percent during periods of inflation. Assets are prudently invested to maximize returns. The Retirement Systems has a significant, positive impact on the economy of South Carolina. DB plans deliver retirement income in a cost-efficient manner – at 46 percent less cost than individual DC accounts! This is good news for South Carolina’s taxpayers!