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Legislative session brings many changes Per a busy legislative session in the South Carolina General Assembly, South Carolina Retirement Systems (SCRS) will experience a variety of changes effective July 1. Senate bill 618 (S.618) was ratified on June 6 and signed into law by Gov. Mark Sanford June 10. The changes are outlined below but if further details are needed, go to http://retirement.sc.gov. Contribution Changes S.618 changes the employee and employer contributions to SCRS. Beginning July 1, SCRS members will contribute 6.25 percent of their gross monthly pay to SCRS. In July 2006, that contribution will increase to 6.5 percent of employees’ gross pay. This is an overall increase from 6 percent.   In July 2006, employers’ contribution will rise from 7.55 percent to 8.05 percent. In July 2007, employers’ will contribute 8.55 percent.     Also effective this July, retired SCRS members who work for a covered employer will make active member contributions for the duration of their covered employment, including those who participate in the Teacher and Employee Retention Incentive (TERI) program. Benefits Changes This July, eligible retired SCRS members will receive an annual guaranteed cost-of-living adjustment (COLA) of up to one percent if the Consumer Price Index as of the prior Dec. 31 is at least 1 percent.   The State Budget and Control Board can grant a COLA in excess of one percent if the unfunded liability amortization period for SCRS does not exceed 30 years. In turn, the board approved a 3.4 percent COLA for eligible SCRS retirees and beneficiaries effective this year.   Also this July, retired contributing members of SCRS are eligible for an increased group life insurance benefit—a payment equal to one year’s annual salary—in lieu of the retired member benefit of $2,000, $4,000, or $6,000 normally available to other retirees.   S.618 removes the $50,000 service retiree earnings limitation for SCRS retirees who return to covered employment after a 15-day break in service.   The new law eliminates the unused annual leave payout at retirement for state retirees who begin TERI participation on or after this July 1st and requires the recalculation of the TERI participant’s average final compensation and annuity to include the payment made at termination for unused annual leave.   In addition, a second payment for unused annual leave will no longer be made to state retirees rehired on or after this July.   Any retired employee who works for a state agency on or after July 1 will be exempt from the State Employee Grievance Act. In addition, any state employee who becomes a TERI participant after June 6, 2005, will be exempt from the Grievance Act.   The last change is the elimination of the Retirement Systems Medical Board. Investments The bill set up an investment commission made up of financial experts appointed by the five-member Budget and Control Board. The state treasurer may also serve as a commissioner. A nonvoting retired member will be appointed by the investment commission members and fiduciary responsibility is moved to the new commission.   Under the new law, the SCRS equity investments cannot exceed 70 percent of the total portfolio, as opposed to the old limit of 40 percent.   It also allows the commission to hire a chief investment officer who will have defined authority and responsibility for the annual investment plan. The current State Retirement Systems Investment Panel is retained in the advisory role to the CIO regarding the annual investment plan.     Friday, July 1, 2005 Catalyst Online is published weekly, updated as needed and improved from time to time by the MUSC Office of Public Relations for the faculty, employees and students of the Medical University of South Carolina. Catalyst Online editor, Kim Draughn, can be reached at 792-4107 or by email, catalyst@musc.edu. Editorial copy can be submitted to Catalyst Online and to The Catalyst in print by fax, 792-6723, or by email to petersnd@musc.edu or catalyst@musc.edu. To place an ad in The Catalyst hardcopy, call Community Press at 849-1778.