South Carolina S 297: Employer and employee contribution rates under SCRS and PORS

Bill Text

2025-2026 Bill 297 Text of Previous Version (Feb. 10, 2025) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 297

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING 
SECTIONS 9-1-1085 AND 9-11-225, BOTH RELATING TO EMPLOYER AND EMPLOYEE 
CONTRIBUTION RATES UNDER THE SOUTH CAROLINA RETIREMENT SYSTEM AND THE POLICE 
OFFICERS RETIREMENT SYSTEM, RESPECTIVELY, SO AS TO PROVIDE THAT EMPLOYERs, UP 
TO CERTAIN LIMITS, MAY ELECT TO PAY ALL OR A PORTION OF REQUIRED EMPLOYEE 
CONTRIBUTIONS DURING A FISCAL YEAR; BY AMENDING SECTIONS 9-1-10 AND 9-11-10, 
BOTH RELATING TO THE SOUTH CAROLINA RETIREMENT SYSTEM DEFINITIONS AND TO THE 
POLICE OFFICERS RETIREMENT SYSTEM DEFINITIONS, RESPECTIVELY, SO AS TO PROVIDE 
WHAT IS NOT EARNABLE COMPENSATION and TO PROVIDE THAT CERTAIN CONTRIBUTIONS 
PAID BY EMPLOYERs ARE ACCUMULATED CONTRIBUTIONS OR AGGREGATE CONTRIBUTIONS; BY 
AMENDING SECTION 9-11-260, RELATING TO DEPOSIT OF ASSETS IN THE SYSTEM, SO AS 
TO PROVIDE FOR CERTAIN AMOUNTS PAID BY EMPLOYERs IN LIEU OF EMPLOYEE 
CONTRIBUTIONS; and BY AMENDING SECTIONS 9-1-1020, 9-1-1160, AND 9-11-210, ALL 
RELATING TO CONTRIBUTIONS OF MEMBERS, SO AS TO PROVIDE THAT EMPLOYERs MAY PICK 
UP CERTAIN CONTRIBUTIONS IN THE AMOUNT DESIGNATED AS EMPLOYEE CONTRIBUTIONs IN 
CERTAIN CIRCUMSTANCES.

Be it enacted by the 
General Assembly of the State of South Carolina:

SECTION 1. 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 pick ups 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 2. 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 pick ups 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 3. 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 4. Section 9-11-10(12) of the S.C. Code is amended to