1. 2015 BAW Conference Retirement Updates Jennifer S. Dolder George M. Hazin

2. Retirement updates Jennifer S. Dolder Employer Services Director jdolder@peba.sc.gov 803.737.4075 George M. Hazin Field Services Manager ghazin@peba.sc.gov 803.737.6882 2

3. Retirement updates overview Employer Services Eligible employees Employer participation Electronic Employer Services (EES) enrollment Earnable compensation Working retirees Retiree marital status change Class Two and Class Three members 3

4. Employer Services Solicit opinions and concerns of employers and serve as an advocate to improve employer support and services Employer Services created in March 2015 Includes the Field Services team 4

5. Employer Services Education Customer service Operational improvements 5

6. Employer Services Soliciting feedback from employers Employer Advisory Group Engaging PEBA employees Survey Committees Identifying employer touch points Review of other plans Retirement readiness and financial education 6

7. Eligible employees As a condition of employment all employees of employers participating in the South Carolina Retirement System (SCRS) are required to become members of SCRS or, if eligible, the State Optional Retirement Plan (State ORP) certain employees are eligible to opt out of participation by statute and must make a timely election to opt out of participation 7

8. Governing statute SECTION 9 ‑ 1 ‑ 420. Certain persons employed after December 31, 1948, are automatically members of System. All persons who have or shall become teachers or employees after December 31, 1948, except those specifically excluded under Section 9 ‑ 1 ‑ 450 or those as to whom membership is optional under Sections 9 ‑ 1 ‑ 510 to 9 ‑ 1 ‑ 560, have become or shall become members of the System as a condition of their employment. Sections 9-1-510 to 9-1-560 offer employees meeting specific conditions the opportunity to elect non-participation within 30 days of hire, but that option is the employee’s to exercise, not the employer’s. 8

9. Employees eligible for non-membership – SCRS School bus driver working for a public school transportation system (9-1-550) Earning compensation less than $100 per month (9-1-510) Non-permanent position Day laborer retained on an as-needed basis and compensated for hours worked (9-1-560) 9

10. Employees eligible for non-membership – SCRS Certain hospital workers Elected official who does not serve full-time and earns $9,000 or less annually (9-1-510) Employer admission An individual first elected to the South Carolina General Assembly on or after the general election in November 2012 10

11. Eligible employees Employee who has funds on deposit with SCRS from a prior period of service may not elect to opt out of participation (9-1-425) Employee must elect membership in SCRS, PORS (if eligible) or State ORP (if offered) 11

12. Eligible employees – PORS The following employees, if employed by a participating employer in the Police Officers’ Retirement System (PORS), are eligible for membership in PORS: police officers firefighters (with employer firefighter coverage) magistrates coroners probate judges 12

13. Eligible employees – PORS Police officers Required by the terms of employment to give time to the preservation of public order; protection of life and property; and the detection of crime in the state; earns at least $2,000 per year; and works at least 1,600 hours per year. Includes peace officers employed and certified by: Department of Corrections, Department of Juvenile Justice, or Department of Mental Health. 13

14. Eligible employees – PORS Firefighters (with employer firefighter coverage) prevention and control of property destruction by fire; earns at least $2,000 per year; and works at least 1,600 hours per year. Effective January 1, 2001, magistrates are required to participate Probate judges may participate in PORS or SCRS Full-time coroners and deputy coroners must participate in PORS Part-time coroners must join SCRS 14

15. Eligible employees – State ORP State Optional Retirement Program (State ORP) A newly hired employee working for a state agency, public school district or higher education institution who is otherwise eligible for membership in SCRS may elect to join State ORP. If an employee fails to make the initial election within 30 days of their date of hire, the employee is considered to have elected membership in SCRS by default. 15

16. Ineligible workers Independent contractors Student Employees Employed by school, college or university where the person is enrolled or regularly attending classes cannot join Unless employed as a school bus driver and paid by the same school district in which enrolled In determining student status, PEBA may employ the Social Security Administration’s student services guidelines. 16

17. Working retirees Not eligible for active membership Those receiving a monthly annuity benefit under SCRS or PORS and who are re-employed by a participating employer Includes Teacher and Employee Retention Incentive (TERI) program participants Retired members working for a covered employer are required to make contributions at same rate as active members (effective July 1, 2005) 17

18. Employer participation Upon application to participate in the Retirement Systems, an employer agrees to comply with the provisions of the Retirement Code and PEBA’s rules and regulations An employer’s application to participate in the Retirement Systems must be approved and signed by the employer’s governing body PEBA does not have the legal authority to allow a participating employer to discretionarily withdraw from participation in the Systems. 18

19. EES enrollment Retirement enrollments should be keyed in Electronic Employer Services (EES) Advantages include confidentiality, security and employee plan election awareness Paper enrollment forms will be phased out Employers enrolling employees via SCEIS do not have access to EES enrollments *Future option for enrollment data file transfer 19

20. EES enrollment Employees have 30 days from their date of hire to make retirement election by statute Key enrollments in a timely manner and use a valid email address for the employee Delinquency of employer may result in automatic defaults to SCRS for employees Do not submit duplicate paper forms to PEBA (including employers using SCEIS) 20

21. EES enrollment Videos: Introduction to Enrollments Processing Enrollments PORS Enrollments Other Employer Information Document: Employee Responsibility (pdf) 21

22. Earnable compensation Employee and employer contributions due on all amounts considered earnable compensation Salary or wages Used sick and annual leave Termination pay for unused annual or general leave (if certified as annual leave) All payments up to and including 45 days’ termination pay Class Two members only Overtime and compensatory time Effective January 1, 2013, must be employer mandated (SCRS) Other compensation 22

23. Earnable compensation Wages not subject to retirement contributions One-time special payments or bonuses Incentive payments Lump-sum payments for unused leave sellback Benefits received for long-term disability Member compensation above IRS allowable limit SCRS overtime not mandated by employer 23

24. Working retirees Effective January 2, 2013, a retired member who has been retired for at least 30 consecutive calendar days may be hired and return to covered employment and earn up to $10,000 without affecting their monthly retirement benefit. 24

25. Working retirees Submit return to work dates for working retirees Include date of hire and estimated monthly salary PEBA proactively monitors the earnings limit and required 30 day break in service Important for employers to submit information as soon as retiree is hired to avoid any overpayment of benefits 25

26. Working retirees Retirees who return to work sooner than 30 days after their date of retirement Benefits suspended PEBA contacts the retiree by phone Letter mailed to retiree Exceptions TERI participation counts toward the 30 days of retirement (member must still terminate employment to end TERI and begin receiving a benefit) Elected official 26

27. Working retirees Monitoring the $10,000 earnings limit Estimated monthly salary allows PEBA to project three months in advance when the retiree is expected to exceed the limit Letter notifies the employer three months in advance requesting a response If no response, a second letter is sent to the retiree in the month prior to exceeding the earnings limit 27

28. Working retirees $10,000 earnings limit exceptions Date of retirement before January 2, 2013 age 62 at date of retirement (SCRS) or age 57 at date of retirement (PORS) appointment by the Governor and confirmed by the Senate appointment or election by the General Assembly elected by the qualified electors of the applicable jurisdiction teaching in a critical academic need area or geographic need area as designated by the Board of Education (Assurance Form from Department of Education required) 28

29. Retiree marital status change Effective June 1, 2015, a retired member of SCRS or PORS has up to five years after a change in marital status to select a new payment option or designate a new survivorship beneficiary Changes in marital status include death of spouse, marriage, and divorce Previously, a change in the form of the member’s monthly retirement payment had to be selected within one year of the qualifying event 29

30. Class Two and Three Members Class Two Members with earned service credit in SCRS or PORS or a correlated retirement system for a period of service prior to July 1, 2012. Class Three Members hired on or after July 1, 2012, without an existing retirement account with earned service in SCRS or PORS or a correlated retirement system for a period of service prior to July 1, 2012. 30

31. Class Two and Three Members A period of withdrawn service or a period of participation in the State ORP does not count toward the earned service credit used to determine whether a member is Class Two or Class Three unless the member has completed a service purchase to establish earned service credit in SCRS or PORS for the period of withdrawn service or State ORP participation. 31

32. Class Three Members Unused annual leave at termination not included in AFC New retirement eligibility requirements New average final compensation calculation No service credit for any unused sick leave at retirement Not eligible for the TERI program 32

33. Retirement update reminders Employer Resource Center on PEBA’s website Don’t forget about the Covered Employer Procedures Manual! Employer training sessions at PEBA September 8-9 November 3-4 Regional employer training sessions in Charleston and Greenville RSS news feed Keep contact information in EES up-to-date 33

34. Questions 34

35. Disclaimer This presentation does not constitute a comprehensive or binding representation regarding the employee benefits offered by the South Carolina Public Employee Benefit Authority (PEBA). The terms and conditions of the retirement and insurance benefit plans offered by PEBA are set out in the applicable statutes and plan documents and are subject to change. Please contact PEBA for the most current information. The language used in this presentation does not create any contractual rights or entitlements for any person. 35