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Police Officers Retirement System (PORS)

Basic Information

You are considered an active member if you are working for an employer participating in PORS, earning service credit, making regular contributions to a PORS retirement account, and have not retired or terminated from covered employment. You must be an active member to receive most of the benefits described in this website.

You contribute a tax-deferred 7.84 percent of gross pay into your PORS retirement account. If you have not retired, your account earns 4 percent interest compounded annually on your balance as of the previous June 30.

To learn more about PORS, you may choose from the following topics:

Membership

Membership is mandatory as a condition of your employment with a covered employer unless you are in a position or classification of employment specifically exempted from membership by statute. Certain classifications, such as non-permanent employees, have the option to elect non-membership within 30 days from their date of hire. Your employer should let you know if your employment falls into one of these categories.

Police officers, peace officers, firefighters, coroners, magistrates and probate judges are eligible for membership in PORS under the following circumstances:

  • Police Officers – A police officer is defined as a person who is required by the terms of his or her employment to give his or her time to the preservation of public order; protection of life and property; and the detection of crime in the state. Police officers must also earn at least $2,000 per year and devote at least 1,600 hours per year to this work unless exempted by statute.
  • Coroners and Deputy Coroners - Coroners and deputy coroners in a full-time, permanent position who meet the above requirements are also considered police officers.
  • Peace Officers – A peace officer is a person who is employed and certified by the SC Department of Corrections, the SC Department of Juvenile Justice, or the SC Department of Mental Health and has the status of a peace officer under Section 24-1-280 of the South Carolina Code of Laws. Peace officers must also earn at least $2,000 per year and devote at least 1,600 hours per year to this work unless exempted by statute.
  • Firefighters – A firefighter is a person who gives his or her time to prevention and control of property destruction by fire. A firefighter must also earn at least $2,000 per year and devote at least 1,600 hours per year to this work unless exempted by statute.
  • Magistrates – Newly-appointed magistrates are required to participate in PORS for service as a magistrate. These members are not subject to the 1,600-hour and $2,000 per year requirements.
  • Probate Judges– Probate judges may elect to participate in PORS or they may elect to participate in the South Carolina Retirement System (SCRS). These members are not subject to the 1,600-hour and $2,000 per year requirements.
 

PEBA Retirement Benefits makes the final determination as to whether any person may become a PORS member.

Your PORS membership starts when you earn compensation from a covered employer and make contributions to your PORS retirement account. You are considered an active member if you are working for a PORS-covered employer, earning service credit, and making regular contributions to a PORS retirement account, and you have not retired or terminated from covered employment.

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Class Two and Class Three Membership

Currently, there are two classes of membership: Class Two and Class Three. Class Two members are generally employees who currently have earned service credit in PORS or a correlated retirement system for a period of service prior to July 1, 2012.

Class Three members are those members who do not currently have earned service in PORS or a correlated retirement system for a period of service prior to July 1, 2012.  A period of withdrawn service or a period of participation in the State Optional Retirement Program (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 PORS for the period of withdrawn service or State ORP participation.

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Contribution Rates

You contribute a tax-deferred percentage of gross pay into your PORS retirement account. For fiscal year 2014 (July 1, 2013, through June 30, 2014), the PORS employee contribution rate is 7.84 percent.

Retirement reform legislation enacted in 2012 set a contribution schedule for PORS employee and employer contribution rates that provided for a 7.5 percent employee contribution rate and a 12.5 percent employer contribution rate for the fiscal year beginning July 1, 2013. However, the legislation also provided that if the scheduled employer and employee contribution rates were not sufficient to maintain a 30-year amortization period for the PORS unfunded liability, the scheduled contribution rates must be increased in equal amounts as necessary to maintain a 30-year amortization period.

Based upon the 2011 actuarial valuation of PORS, PEBA Retirement Benefits’ actuaries found that the 7.5 percent employee and 12.5 percent employer contribution rates scheduled for July 1, 2013, were not sufficient to maintain a 30-year amortization period for PORS. Therefore, the contribution rates had to be increased by an additional equal amount of 0.34 percent to 7.84 percent and 12.84 percent, respectively, for the fiscal year beginning July 1, 2013, to maintain a 30-year amortization schedule for PORS.

Based upon the 2012 actuarial valuation of PORS, the contribution rates beginning July 1, 2014, will be 8.41 percent for employees and 13.41 percent for employers. Like the increases for fiscal year 2014, these increases will be required for the fiscal year beginning July 1, 2014, to maintain a 30-year amortization schedule for PORS.

Any future required contribution rate increases will be based on the results of the annual actuarial valuations of PORS, in which PEBA Retirement Benefits’ actuaries report each year whether the scheduled contribution rates are sufficient to maintain the 30-year amortization period.

Member Compensation Limit

The Internal Revenue Service imposes a federal compensation limit under the Internal Revenue Code (IRC), Section 401(a) (17). This limit, also referred to as a cap, is placed on the amount of annual compensation which may be taken into account for purposes of calculating pension contributions. Employees who became members of PORS or SCRS, or participants in State ORP prior to January 1, 1996, are not subject to the annual compensation limit. Employees who became members or participants in the plans on and after January 1, 1996, are subject to the compensation limit as adjusted by the commissioner of the IRS for increases in the cost of living in accordance with Section 401(a)(17) of the IRC. For calendar year 2014, the compensation limit (cap) increased from $255,000 to $260,000. Compensation in excess of this limitation is not subject to retirement contributions.

Interest on Your PORS Account

Your PORS account earns 4 percent interest compounded annually on your balance as of the previous June 30 until you retire or your account becomes inactive. An account is considered inactive when no contributions have been made in the preceding 12 months and no other active, correlated system or State ORP account exists.

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Correlated Systems

PEBA Retirement Benefits administers several other defined benefit retirement systems for public employees and officials. Two of these other systems, the South Carolina Retirement System (SCRS) and the General Assembly Retirement System (GARS), are correlated systems with PORS. If you have contributions in more than one of these correlated retirement systems, your service credit is maintained separately within each system; however, your service credit is added together to determine your eligibility for a retirement annuity.

For example, if you are a PORS member with 10 years of service credit and were previously a member of SCRS with 15 years of service, PEBA Retirement Benefits would add together your service credit to determine your eligibility for a retirement annuity.

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Leaving Before Retirement

If you leave your job and terminate all employment covered by PEBA Retirement Benefits before you are eligible to retire, you have two options concerning your contributions:

  • Request a refund of your contributions and interest; or
  • Leave your funds in the Retirement Systems. Your account will continue to accrue interest until your account becomes inactive. Your PORS account is considered inactive when no contributions have been made into the account in the preceeding 12 months and no other active, correlated system or State ORP account exists..

Request a Refund

If you have terminated all employment covered by one or more of the retirement systems administered by PEBA and wish to receive a refund of your accumulated employee contributions plus the interest earned on your account, you must complete a Refund Request (Form 4101) and return it PEBA. You may submit your refund request immediately upon termination; however, by law, there is a minimum 90-day waiting period to a maximum of six months from your date of termination until a refund can be made. If you are working for two or more covered employers and/or contributing to more than one retirement account (i.e., working two jobs and paying into a PORS and an SCRS account), you must stop working in all correlated systems to request a refund from any account.

If you receive a refund, you forfeit your rights to any future service retirement or disability annuity. Employer contributions are not refunded. Instead of having the refund paid directly to you, you may choose to roll over the funds into an IRA, a 401(k) plan, a 401(a) eligible plan, a 403(a) plan, a 403(b) plan, or some 457 plans. The South Carolina Deferred Compensation Program’s 457 retirement plan does not accept rollovers from your PORS account.

PEBA is required to withhold federal taxes of 20 percent on the taxable portion of any refund that is eligible for a rollover but is not transferred directly into another qualified retirement plan. If you do not take advantage of a rollover as indicated above and are under the age of 59 ½ at the time of distribution, your distribution will be subject to regular income tax in the year you receive the payment, plus there may be a 10 percent penalty tax on the taxable portion of your distribution, unless certain exceptions apply.

See “Special Tax Rules” in IRS Publication 575 and IRS Form 5329 for more information on this tax penalty and the exceptions to the penalty.

Be sure to check with an accountant or tax advisor regarding your tax liability, or visit the IRS’s website at www.irs.gov and the website for the tax agency in the state in which you reside. In South Carolina, visit the South Carolina Department of Revenue’s website at www.sctax.org.

Leave Funds on Deposit

When you leave your money in your PORS account, you retain your years of service credit, which may be added to any future service you may accrue should you later become employed in a position covered by one of the correlated retirement systems administered by PEBA. Your account will continue to earn interest until it becomes inactive. An account is considered inactive when no contributions have been made to the account in the preceding 12 months and no other active, correlated system account exists. You may apply for a refund at a later date or apply for a service retirement annuity upon reaching eligibility. No action is required if you wish to retain your membership and leave your funds on deposit, but it is your responsibility to keep PEBA informed of your current address as well as any name or beneficiary changes. You can make certain updates to your account information through Member Access.

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Beneficiaries

Active PORS members may designate three types of beneficiaries:

  • Primary beneficiaries for your in-service death benefit or refund of contributions. Multiple beneficiaries share equally in a survivor monthly annuity;
  • Contingent beneficiaries in case of death of the primary beneficiaries. All primary beneficiaries must be deceased before any contingent beneficiaries are paid; and
  • Incidental death benefit beneficiaries.


You may name your estate as beneficiary; however, monthly annuities cannot be paid to an estate.

Generally, you may change your beneficiaries at any time before retirement. To do so, download the appropriate beneficiary designation form. You may view your designated beneficiaries by logging into Member Access or by contacting Customer Services at 803-737-6800, toll free at 800-868-9002 (within S.C. only), or by using our online contact form.

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Service Retirement Eligibility

If you meet the following requirements, you are considered eligible to retire (see Correlated Systems if you have an account in more than one retirement system):*

Class Two Members:

  • 25 years of service on the date of retirement, five years of which must be earned service credit; or

  • Age 55 or older on the date of retirement with at least five years of earned service credit.

 

Class Three Members:

  • 27 years of service on the date of retirement, eight years of which must be earned service credit; or

  • Age 55 or older on the date of retirement with at least eight years of earned service credit.


*If your membership began before January 1, 2001, you may also retire if you have 25 years of service credit on the date of retirement, five years of which must be combined creditable service accrued as of December 31, 2000; or if you are age 55 or older on the date of retirement with at least five years of combined creditable service accrued as of  December 31, 2000.

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Your Average Final Compensation

Your average final compensation, commonly referred to as AFC, is an important part of the formula used to calculate your retirement annuity.

If you are a Class Two member, your AFC is the 12 highest consecutive quarters4 of earnable compensation on which you made regular member contributions and were earning service credit. An amount up to and including 45 days' termination pay for unused annual leave at retirement may be included in your AFC calculation. For an elected official, AFC may be calculated as the average annual earnable compensation for the 36 consecutive months before the expiration of the elected official's term of office.

If you are a Class Three member, your AFC is the 20 highest consecutive quarters of earnable compensation on which you made regular member contributions and were earning service credit. Termination pay for unused annual leave at retirement may not be included in the AFC calculation.

One of PEBA’s goals is to start your annuity payment as soon as possible so that you are not without income once you terminate employment. To make this possible, your initial annuity payment does not include any credit for unused sick or annual leave, if applicable, nor does it include your final earnable compensation information. Until all of this information is received from your employer, you will receive an estimated annuity.

If you are a Class Two member, after your employer submits your final earnable compensation information, which is in the form of quarterly retirement contributions, PEBA will audit the retirement contributions for your 12 highest consecutive quarters of earnable compensation. For work performed after June 30, 2012, your AFC does not include any overtime pay not mandated by your employer. Your AFC may be adjusted after the audit if any of the contributions included in the AFC calculation were for any payments not considered a part of your regular earnable compensation base. Your AFC will also be adjusted according to statute to include payment for your unused annual leave (see Unused Leave at Retirement below). As a result of the information received from your employer and the audit of the contributions for your 12 highest consecutive quarters of earnable compensation, your retirement annuity will be finalized. The final amount may be less than, or more than, your estimated annuity.

If you are a Class Three member, you will have retirement contributions for your 20 highest consecutive quarters of earnable compensation audited. Your earnable compensation does not include any overtime pay not mandated by your employer. You will not receive service credit for unused sick leave at retirement, nor will payment at retirement for your unused annual leave be included in the calculation of your AFC.

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Unused Leave at Retirement

Class Two Members:

Annual Leave

Only an amount up to and including 45 days' pay for unused annual leave from your last termination payment may be included before averaging your 12 highest consecutive quarters of earnable compensation.

Sick Leave

At retirement, you may receive service credit for up to 90 days of unused sick leave from your last employer at no cost to you. This service credit cannot be used to establish retirement eligibility. Sick leave is reported by your employer after retirement. One month of service is granted for each 20 days of sick leave.

Class Three Members:

Class Three members will not receive service credit for any unused sick leave at retirement and any pay you receive at termination for unused annual leave will not be included in the calculation of your average final compensation.

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Payment Options at Retirement

There are three monthly annuity payment options available to you at retirement. Select the option that best suits your needs. Your payment option may not be changed once your annuity is first payable.

Option A (Maximum Retiree Only Monthly Annuity)

This option provides the maximum monthly annuity available and will pay you a lifetime annuity based on your average final compensation, years of service, and a multiplier (.0214 for Class Two and Three or $10.97 for each year of Class One service). After your death, the Retirement Systems will return, through a lump-sum payment to your beneficiary or your estate, the remaining balance of any member contributions and interest, and any working retiree contributions not exhausted through receipt of your annuity during your retirement.

Option B (100% - 100% Joint Retiree-Survivor Monthly Annuity)

You will receive a reduced (from Option A) monthly annuity for life. After your death, the same annuity (100 percent of your reduced monthly annuity, including granted benefit adjustments) will continue throughout your beneficiary’s lifetime. If all of your designated beneficiaries predecease you, your annuity will revert to Option A, including any benefit adjustments granted since your retirement date.

You may select Option B only if your designated beneficiary is your spouse, or you designate multiple beneficiaries or a sole beneficiary who is not your spouse and who is within the 10-year age difference limits allowed by an Internal Revenue Code (IRC) formula. The non-spousal limits do not apply if the non-spousal beneficiary is older than you, or in the case of disability retirement or death benefits. If, based on the IRC formula, the adjusted age difference for you and a non-spousal beneficiary exceeds the IRC limits, Option B would not be available to you. You would be able to select Option C, however, with no IRC restrictions.

Option C (100% - 50% Joint Retiree-Survivor Monthly Annuity)

You will receive a reduced (from Option A) monthly annuity for life. After your death, one-half of the annuity (50 percent of your reduced monthly annuity, including granted benefit adjustments) will continue throughout your beneficiary’s lifetime. If all of your designated beneficiaries predecease you, your annuity will revert to Option A, including any benefit adjustments granted since your retirement date.

If You Choose Option B or Option C

If you choose Option B or Option C and name multiple beneficiaries, after your death your annuity will be divided equally among those beneficiaries. The annuity will not change for the remaining beneficiaries if one beneficiary dies, either before or after the member dies. If you select Option B or Option C and all of your designated beneficiaries predecease you, your annuity will revert to Option A effective on the date the last beneficiary died. You must notify PEBA upon the death of a beneficiary.

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