H 4576

South Carolina General Assembly
126th Session, 2025-2026
Bill 4576
Indicates Matter Stricken
Indicates New Matter
(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)
Indicates Matter Stricken
Indicates New Matter
Amended
April 23, 2026
H. 4576
Introduced
by Reps. Bannister and Clyburn
S. Printed 4/23/26--H.
Read the first time January 13, 2026
________
A bill
TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING
SECTION 9-20-10, RELATING TO STATE OPTIONAL RETIREMENT PROGRAM DEFINITIONS, SO
AS TO INCLUDE SPECIAL PURPOSE DISTRICTS IN THE DEFINITION OF "EMPLOYER."
    Amend Title To Conform
Be it enacted by the
General Assembly of the State of South Carolina:
SECTION 1.  Section 9-20-10(1) and (2) of the S.C. Code is amended
to read:
    (1) "Employer" means:
       (a)
a school district that receives funding from the State from the annual
appropriation to the Department of Education for Aid to School
Districts-Employer Contributions in the annual general appropriations act;
       (b)
a four-year and postgraduate institution of higher education supported and
under the control of the State;
       (c)
a technical college supported and under the control of the State;
       (d)
the State or any of its departments, agencies, bureaus, commissions, and
institutions, provided that such entity does not meet the definition of item
(1)(a), (b), or (c) of this section.; or
       (e) a special purpose district or
commission of public works that has made an election to participate in the
State Optional Retirement Program pursuant to Section 9-20-15.
    (2)
"Eligible employee" means:
       (a)
a person hired on or after July 1, 2001, by an employer as defined in Section
9-20-10(1)(a) to fill a permanent full-time position;
       (b)
a person hired on or after July 1, 2002, by an employer as defined in Section
9-20-10(1)(b), (c), or (d) to fill a permanent full-time position;
       (c)
a person hired on or after July 1, 2003, by an employer as defined in Section
9-20-10(1)(a), (b), (c), or (d) to fill a temporary
position or a part-time permanent position;
       (d)
a person employed by an employer as defined in Section 9-20-10(1) who, as of
June 30, 2001, was a participant of the Optional Retirement Program for
Teachers and School Administrators or who, as of June 30, 2002, was a
participant of the Optional Retirement Program for Publicly Supported Four-Year
and Postgraduate Institutions of Higher Education;  or
       (e)
an employee, hired on or after January 1, 2003, by the State or any of its
departments, agencies, bureaus, commissions, or institutions who is not covered
by the State Employee Grievance Procedure but who is eligible to participate in
either the South Carolina Retirement System or the Police Officers Retirement
System.; or
       (f) an employee hired by an employer as
defined in Section 9-20-10(1)(e) after the employer's effective date of
participation in the State Optional Retirement Program pursuant to Section
9-20-15.
    However, an employee
who exercises an option to not participate in the South Carolina Retirement
System under Section 9-1-550 is not eligible to participate in the State
Optional Retirement Program.
SECTION 2.  Chapter 20, Title 9 of the S.C. Code is amended by
adding:
    Section
9-20-15. A special purpose district, as defined in Section 6-11-1610, or a
commission of public works, established pursuant to Article 3, Chapter 31 of
Title 5, that participates as an employer in the South Carolina Retirement
System, in its discretion, also may become a participating employer in the
State Optional Retirement Program by applying to the board to participate in
the program and by complying with the requirements and regulations of the
board. The application must be filed at least six months prior to the requested
effective date of participation, which must be July 1, 2027, or any subsequent
July first, next following receipt by the board of such application.
SECTION 3.  Section 9-1-1085 of the S.C. Code is amended by adding:
    (E) In lieu of the deductions from
compensation required by Sections 9-1-1020 and 9-1-1160, an employer may elect,
no later than July first, to pick up all or a portion of the employee
contributions required by this section for the following fiscal year without a
reduction or offset from its employees' compensation.  Employee contributions
picked up without such reduction or offset from the employee's compensation
must be treated as employer contributions in determining federal tax treatment
under Section 414(h)(2) of the United States Internal Revenue Code but must be
credited as employee contributions for the purposes of the system. An employer
making the election provided by this subsection is considered to have taken
formal action to provide that the contributions on behalf of its employees,
although designated as employee contributions, must be paid by the employer in
lieu of employee contributions. The employer shall pay these employee
contributions from the same source of funds which is used in paying earnings to
the employee. The employee, however, may not be given any option of choosing to
receive the contributed amount of the pickups directly instead of having them
paid by the employer to the retirement system. An employer's election to pick
up contributions without a reduction or offset from its employees' compensation
pursuant to this subsection may not be changed during the fiscal year but may
be changed for future fiscal years.
SECTION 4.  Section 9-11-225 of the S.C. Code is amended by adding:
    (E) In lieu of the deductions from
compensation required by Section 9-11-210, an employer may elect, no later than
July first, to pick up all or a portion of the employee contributions required
by this section for the following fiscal year without a reduction or offset
from its employees' compensation.  Employee contributions picked up without
such reduction or offset from the employee's compensation must be treated as
employer contributions in determining federal tax treatment under Section
414(h)(2) of the United States Internal Revenue Code but must be credited as
employee contributions for the purposes of the system.  An employer making the
election provided by this subsection is considered to have taken formal action
to provide that the contributions on behalf of its employees, although
designated as employee contributions, must be paid by the employer in lieu of
employee contributions. The employer shall pay these employee contributions
from the same source of funds which is used in paying earnings to the
employee.  The employee, however, may not be given any option of choosing to
receive the contributed amount of the pickups directly instead of having them
paid by the employer to the retirement system.  An employer's election to pick
up contributions without a reduction or offset from its employees' compensation
pursuant to this subsection may not be changed during the fiscal year but may
be changed for future fiscal years.
SECTION 5.  Section 9-1-10(8) of the S.C. Code is amended by
adding:
    (c) Employee contributions picked up by
an employer pursuant to Section 9-1-1085(E) without a reduction or offset from
the member's compensation are not earnable compensation for the purposes of the
system.
SECTION 6.  Section 9-11-10(12) of the S.C. Code is amended to
read:
    (12) "Compensation" means the total
remuneration paid to a police officer for service rendered to an employer for
his full normal working time;  when compensation includes maintenance, fees and
other things of value, the board shall fix the value of that part of the
compensation not paid in money directly by the employer. Employee
contributions picked up by an employer pursuant to Section 9-11-225(E) without
a reduction or offset from the member's compensation are not compensation for
the purposes of the system.
SECTION 7.  Section
9-1-10(1) of the S.C. Code is amended to read:
    (1) "Accumulated contribution" means the
sum of all the amounts either deducted from the
compensation of a member or paid by the employer in lieu
of employee contributions pursuant to Section 9-1-1085(E) and credited
to the members member's individual
account in the employee annuity savings fund, together with regular interest on
the account, as provided in Article 9 of this chapter.
SECTION 8.  Section 9-11-10 (2) and (6) of the S.C. Code is amended
to read:
    (2) "Accumulated contributions" means
the sum of all the amounts either deducted from the
compensation of a member or paid by the employer in lieu
of employee contributions pursuant to Section 9-11-225(E) and credited
to the member's individual account in the employee annuity savings fund,
together with regular interest on the account, as provided in this chapter.
    (6)
"Aggregate contributions" means the sum of all the amounts
either deducted from the compensation of a member or
paid by the employer in lieu of employee contributions pursuant to Section 9-11-225(E)
and credited to the member's individual account in the system, including
any amounts transferred from another fund to the system as provided in Section
9-11-210(6).
SECTION 9.  Section 9-11-260(2) of the S.C. Code is amended to
read:
    (2) The members' account shall be the
account in which shall be held the contributions deducted from the compensation
of members and amounts paid by the employer in lieu of
employee contributions pursuant to Section 9-11-225(E), together with
the interest credited thereon.  Upon the retirement of a member, or upon the
death of a member if an allowance is payable to his beneficiary pursuant to
Section 9-11-130, the amount of his accumulated contributions shall be
transferred to the accumulation account.
SECTION 10. Section 9-1-1020, the fourth undesignated paragraph, of
the S.C. Code is amended to read:
    Section
9-1-1020.  Each department and political subdivisionemployer shall pick up the employee contributions
required by this section for all compensation paid on or after July 1, 1982,
and the contributions so picked up shall be treated as employer contributions
in determining federal tax treatment under Section
414(h)(2) of the United States Internal Revenue Code. For this purpose,
each department and political subdivisionemployer is deemed to have taken formal action on or
before January 1, 2009, to provide that the contributions on behalf of its
employees, although designated as employer employee contributions, shall be paid by the employer in
lieu of employee contributions. The department and
political subdivisionemployer shall pay
these employee contributions from the same source of funds which is used in
paying earnings to the employee. The department and
political subdivisionemployer may pick up
these contributions by a reduction in the cash salary of
the employee. compensation of the employee or, if
the employer makes an election authorized pursuant to Section 9-1-1085(E), it
may pay the amount designated as an employee contribution without a reduction
or offset from the employee's compensation.
SECTION 11. Section 9-1-1160(B) of the S.C. Code is amended to
read:
    (B) Each department
and political subdivisionemployer shall pick
up the employee contributions required by this section for all compensation
paid on or after July 1, 1982, and the contributions picked up must be treated
as employer contributions in determining federal tax treatment under Section 414(h)(2) of the United States Internal Revenue
Code.  Each department and political subdivision shall
continue to withhold federal income taxes based upon these contributions until
the Internal Revenue Service, or the federal courts, rule, pursuant to Section
414(h) of the United States Internal Revenue Code, that these contributions are
not included as gross income of the employee until such time as they are
distributed or made available. For this purpose,
each employer is considered to have taken formal action to provide that the
contributions on behalf of its employees, although designated as employee
contributions, must be paid by the employer in lieu of employee contributions.
The department and political subdivisionemployer shall pay these employee contributions from the
same source of funds which is used in paying earnings to the employee.  The department and political subdivisionemployer
may pick up these contributions by a reduction in the cash
salarycompensation of the employee or, if the employer makes an election authorized pursuant to
Section 9-1-1085(E), it may pay the amount designated as an employee
contribution without a reduction or offset from the employee's compensation.
Employee contributions picked up must be treated administered for all purposes of this section in the same
manner and to the extent as employee contributions made before the date picked
up.
SECTION 12. Section 9-11-210(11) of the S.C. Code is amended to
read:
    (11) Each department
and political subdivisionemployer shall pick
up the employee contributions required by this section for all compensation
paid on or after July 1, 1982, and the contributions so picked up shall be
treated as employer contributions in determining federal tax treatment under Section 414(h)(2) of the United States Internal Revenue
Code. For this purpose, each department and political
subdivisionemployer is deemed to have taken
formal action on or before January 1, 2009, to provide that the contributions
on behalf of its employees, although designated as employer
employee contributions, shall be paid by the
employer in lieu of employee contributions. The department
and political subdivisionemployer shall pay
these employee contributions from the same source of funds which is used in
paying earnings to the employee. The department and
political subdivisionemployer may pick up
these contributions by a reduction in the cash salarycompensation of the employee or, if
the employer makes an election authorized pursuant to Section 9-11-225(E), it
may pay the amount designated as an employee contribution without a reduction
or offset from the employee's compensation. The employee, however, must
not be given the any option
of choosing to receive the contributed amount of the pickups directly instead
of having them paid by the employer to the retirement system. Employee
contributions picked up shall be treated administered for all purposes of this section in the same
manner and to the extent as employee contributions made prior to the date
picked up.
SECTION 13. This act takes effect upon
approval by the Governor.
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This web page was last updated on April 23, 2026 at 08:57 PM