Basic Plan Information
You contribute a tax-deferred 6.5 percent of gross pay into your SCRS 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 SCRS, please choose from the following topics:
- Correlated Systems
- Leaving Before Retirement
- Beneficiaries
- Service Retirement Eligibility
- Average Final Compensation
- Unused Leave at Retirement
- Payment Plans at Retirement
- Calculating Your Benefit
- TERI Program
Correlated Systems
SCRS, the Police Officers Retirement System (PORS), and the General Assembly Retirement System (GARS) are correlated systems. If you have contributions in more than one of these retirement systems, your service credit is maintained separately within each system; however, your service credit is added together to determine your eligibility for retirement benefits.
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Leaving Before Retirement
If you leave your job and terminate all employment covered by the South Carolina Retirement Systems 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 at 4 percent annually.
Request a Refund
To receive a refund of your accumulated contributions and interest, you must complete a Refund Request (Form 4101) and return it to the Retirement Systems. You may submit your refund request immediately upon termination; however, by law, there is a minimum 90-day waiting period from your date of termination until a refund can be made.
If you request a refund, you forfeit your rights to any future service retirement or disability benefit. Employer contributions are not refunded. 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 an SCRS and a PORS account), you must stop working in all correlated systems to request a refund from any account.
Instead of having the refund paid directly to you, you may choose to roll over the funds into an Individual Retirement Account (IRA), a 401(k) plan, a 401(a) eligible plan, a 403(b) plan, or some 457 plans (the South Carolina Deferred Compensation Program's 457 plan does not accept rollovers from your Retirement Systems account).
The Retirement Systems is required to withhold federal taxes of 20 percent on the taxable portion of any refund that is eligible for rollover but is not transferred directly into another qualified retirement plan. Other taxes may apply as well.
Under the federal Pension Protection Act of 2006 (PPA), the 10 percent withdrawal penalty is waived for public safety members who separate from service after age 50, and for military reservists and national guardsmen who are called to active duty for at least 180 days.
Be sure to check with an accountant or tax advisor regarding your tax liability.
Leave Funds on Deposit
When you leave your money on deposit, your account continues to accrue interest and you retain your years of service credit, which may be added to any future service you may accrue should you later be employed in a position covered by this retirement system.
You may apply for a refund at a later date or apply for a service retirement benefit upon reaching eligibility. No action is required if you wish to retain your membership and leave the funds on deposit, but it is your responsibility to keep the Retirement Systems informed of your current address or any changes in name or beneficiary.
Beneficiaries
Active SCRS members may designate three types of beneficiaries:
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Primary beneficiaries for your in-service death benefit. Multiple beneficiaries share equally in survivor benefits;
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Contingent beneficiaries in case of death of the primary beneficiaries. All primary beneficiaries must be deceased before any contingent beneficiaries are paid; and
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Incidental death benefit beneficiaries.
You may name your estate; however, monthly benefits cannot be paid to an estate.
Your beneficiaries are listed on the annual member statement you receive each fall. You may also contact the Retirement Systems to verify your designated beneficiaries. Generally, you may change your beneficiaries at any time before retirement. To do so, download the appropriate beneficiary designation form.
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):
Normal Retirement (Unreduced Benefit):
- 28 years of service on the date of retirement, five years of which must be earned; or
- Age 65 or older on the date of retirement with five years of earned service.
Early Retirement (Reduced Benefit):
- Age 60 with at least five years of earned service. Your benefit is permanently reduced 5 percent for each year of age less than 65; or
- Age 55 or older with 25 years of service, five years of which must be earned. Your benefit is permanently reduced 4 percent for each year of service less than 28. Cost-of-living adjustment restrictions apply (see below).
If you retire under the early retirement provisions at age 55 with 25 years of service, you are not eligible for cost-of-living adjustments until the second July 1 after you reach age 60 or the second July 1 after the date you would have attained 28 years of service credit had you not retired.
Please note that if your membership began before January 1, 2001, the five year minimum earned service requirement may not apply if you had five years of “creditable” service (this includes purchased time) accrued as of December 31, 2000. Or, you may also meet eligibility if you were at least age 60 and a contributing member on December 31, 2000.
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Your Average Final Compensation
Your average final compensation (AFC) is an important part of the formula used to calculate your retirement benefit. When you retire, your first few benefit checks will be based on information received up to that point and will be an estimated amount.
After your employer submits your final earnable compensation information, retirement contributions for your 12 highest consecutive quarters of earnable compensation will be audited. 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 salary base. Your AFC also will be adjusted accordingly to include payment for your unused annual leave according to statute.
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 benefit will be finalized. The final amount may be less than, or more than, your estimated benefit.
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Unused Leave at Retirement
Annual Leave
Only an amount up to and including 45 days' pay for unused annual leave from your last termination payment shall 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.
School District and Higher Education Employees
Adjustments may be required so that you receive credit for three full years of earnings. Such adjustments may include changes in payroll cycles, contract payouts, and any other occurrence that could potentially cause the AFC to include more or less than three full years of earnings.
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Payment Options at Retirement
There are three monthly benefit payment options available to you at retirement. Select the one that best suits your needs. Your payment option may not be changed once benefits are first payable.
Option A (Maximum Retiree Only Monthly Benefit)
This option provides the maximum monthly benefit available and will pay you a lifetime benefit based on your average final compensation, years of service, and a multiplier (.0182 for Class II or .0145 for Class I). 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 benefits during your retirement.
Option B (100% - 100% Joint Retiree-Survivor Monthly Benefit)
You will receive a reduced (from Option A) monthly benefit for life. After your death, the same benefit (100 percent of your reduced monthly benefit, including granted cost-of-living adjustments) will continue throughout your beneficiary’s lifetime. If all of your designated beneficiaries predecease you, your benefit will revert to Option A, including any cost-of-living 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 Benefit)
You will receive a reduced (from Option A) monthly benefit for life. After your death, one-half of the benefit (50 percent of your reduced monthly benefit, including granted cost-of-living adjustments) will continue throughout your beneficiary’s lifetime. If all of your designated beneficiaries predecease you, your benefit will revert to Option A, including any cost-of-living 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 benefit will be divided equally among those beneficiaries. The benefit 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 benefit will revert to Option A effective on the date the last beneficiary died. You must notify the Retirement Systems upon the death of a beneficiary.
TERI Program
If you are an active SCRS member who is eligible for service retirement, you may elect to participate in the Teacher and Employee Retention Incentive (TERI) program when you complete your application for service retirement.
TERI participation allows you to retire and begin accumulating your retirement benefit on a deferred basis without terminating your employment. You must enroll at the time of retirement.
TERI participants employed by an agency that adheres to state personnel policies will be exempt from the State Employee Grievance Procedure Act. This means your employment as a TERI participant is at will. If a TERI participant works for an employer that is not governed by state personnel policies, the TERI participant would be subject to his employer’s policies regarding employment status and rights.
By participating in TERI, you may defer receipt of your retirement benefit for up to 60 months. Your monthly retirement benefit is accumulated in your TERI account. No interest is paid on the benefits accumulated in your TERI account. Retiree cost-of-living adjustments are applied to a TERI participant’s monthly benefit in the same manner in which other retirees receive such adjustments.
You may participate in TERI only once. If you retired previously and received a service or a disability retirement benefit from SCRS, you are not eligible to participate in the TERI program. However, disability retirees who repaid all of the benefits they received and were restored to active membership are eligible to participate in the TERI program. Participants of the TERI program are not eligible for disability retirement benefits.
If you die during your TERI participation period and your employer provides the incidental death benefit, your beneficiary may be entitled to a payment equal to one year’s earnable compensation.
If you die while participating in TERI, in addition to any eligible incidental death benefit, the total amount of your benefits accumulated in your TERI account will be distributed to the beneficiary designated for your retirement benefit.
A designated beneficiary who is a spouse may roll over the taxable portion of the TERI balance into an IRA, a 401(k) plan, a 401(a) eligible plan, a 403(b) plan, or a 457 plan. A non-spousal beneficiary may roll over the taxable portion of the TERI balance into an IRA only.
At the end of your TERI period, you must terminate employment. Confirmation of your actual termination date is required from your employer. You may then receive the balance in your TERI account through either a taxable, single-sum distribution payable directly to you or through a tax-deferred rollover into a qualified retirement plan.
Any distribution paid directly to you is subject to ordinary federal and state income taxes and may be subject to an additional 10 percent federal penalty for early withdrawal. The 10 percent withdrawal penalty is waived for public safety employees age 50 and older, and military reservists and national guardsmen who are called to active duty for at least 180 days.
If you plan to return to work for a covered employer after your TERI period ends, you must consult with your employer regarding your employer’s employment severance and return-to-work policy.
You are not guaranteed employment; a covered employer decides whether or not to hire you after your TERI period has ended. Regardless of your TERI retirement date, if you return to work after your TERI participation has ended, you will make employee contributions.
Contribution Rates
During your TERI period you will pay the same pre-tax contribution rate as active members for the duration of your TERI period; however, you will not earn service credit or interest on your account.
Unused Annual Leave and Your AFC
The first several benefits posted to your TERI account will be based on information received up to that point because your account is considered to be estimated.
After your employer submits your final earnable compensation information, retirement contributions for your 12 highest consecutive quarters of earnable compensation will be audited. Your AFC may be adjusted accordingly after the audit to include service credit for up to 90 days of unused sick leave only. Your account will remain in this status for the duration of your TERI period.
Upon termination of employment at the end of your TERI participation, your benefit will be recalculated to include payment for up to 45 days of unused annual leave paid at termination.
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