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PEBA Releases Request for Proposal Investment Consulting Services

May 08, 2017

The South Carolina Public Employee Benefit Authority (PEBA) has released a Request for Proposal (RFP) to Provide Investment Consulting Services. The RFP is located here: http://procurement.sc.gov/vendor/contract-opps/other-solicitations/peba. Please see the RFP for instructions on asking questions or requesting additional information

 

PEBA Releases Invitation for Bid to Provide Group Life Insurance

April 28, 2017

The South Carolina Public Employee Benefit Authority (PEBA) has released an Invitation for Bid (IFB) to Provide Group Life Insurance for State Employees. The IFB is located here: http://procurement.sc.gov/vendor/contract-opps/other-solicitations/peba. Please see the IFB for instructions on asking questions or requesting additional information.

 

Governor McMaster signs pension reform act

April 25, 2017

South Carolina Governor Henry McMaster signed into law the Retirement System Funding and Administration Act of 2017. This act was designed to meet the priorities outlined by the Joint Committee on Pension Systems Review and accelerate the plans’ progress toward fully funding the unfunded liabilities. This legislation is an enormous step forward in all respects.

 

“On behalf of the PEBA Board of Directors and the many members of the state’s public pension plans, I extend my gratitude to Governor McMaster, the leadership of the South Carolina General Assembly and the members of the Joint Committee for delving into the complex world of pensions and working through the different scenarios to provide for the sustainability of our state’s public pension plans,” said John Sowards, chairman of the PEBA Board of Directors.

 

“The Governor and General Assembly have exhibited great leadership in acknowledging the significance of the state’s obligations to its public workers and ensuring that benefits promised to our public servants will be payable when due.”

 

PEBA’s responsibility, and the responsibility of many other governmental organizations to the more than 558,000 members of the state’s retirement plans, is a tremendous one. PEBA is focused on the issues which impact the plans’ future. PEBA’s staff will continue to work closely with the Joint Committee as it resumes meeting to discuss potential benefit structure changes.

 

PEBA administers the state’s public pension plans and employee insurance programs.

 

Understanding the S.C. pension funding legislation

April 19, 2017

 

The South Carolina retirement plans were created to provide retirement benefits for those who serve South Carolina. The largest of the plans, the South Carolina Retirement System or SCRS, and the Police Officers Retirement System or PORS, had a combined $27.9 billion trust fund as of June 30, 2016. In 2016, $3.04 billion in annuities were paid to current retirees and beneficiaries from PEBA’s five defined benefit retirement plans. Nearly 94 percent of these annuitants live in South Carolina, representing a potential $2.84 billion impact on our state’s economy. While that is more than the personal income derived from utilities, farming and forestry/fishing1, the plans’ benefits are far from generous. The average annual benefit for all SCRS annuitants was $20,068 as of July 1, 2016. Continue reading here.

 

Ending TERI webpage launched

April 14, 2017

The Teacher and Employee Retention Incentive (TERI) program will close to all members June 30, 2018. Program participants who have questions about ending their TERI participation on or before this date can now learn more on the Ending your TERI participation webpage. Participants can find TERI publications and presentations, as well as forms needed for the TERI-end process.

 

Pension reform legislation update

April 11, 2017

Legislation addressing the funding of the state’s public pension plans was recently enrolled for ratification and will be sent to the Governor for his signature in the coming weeks. The initial provisions of the act will take effect July 1, 2017. Among its provisions are funding schedules for the South Carolina Retirement System (SCRS), the largest of the state’s public plans, and the Police Officers Retirement System (PORS). A summary of the legislation is available here.

 

Live chat unavailable

March 10, 2017

The live chat feature on PEBA's website will be unavailable on Friday March 10, 2017. We apologize for any inconvenience this may cause.

 

Mandiant confirms PEBA’s systems not compromised

March 9, 2017

Mandiant, the South Carolina Public Employee Benefit Authority’s third party technology security services vendor, reported to the agency today that it did not find any evidence of a compromise of PEBA’s information systems.

 

PEBA had requested an independent investigation following reports online in mid-February that listed PEBA as the victim of a breach by an alleged Russian-speaking hacker. Mandiant confirmed the findings of investigations conducted by both PEBA and the South Carolina Department of Administration Division of Technology, which also detected no compromise of the agency’s information systems. PEBA’s February 16, 2017, article is immediately below.

 

PEBA's data safe

February 16, 2017

A report published online February 15, 2017, included the South Carolina Public Employee Benefit Authority (PEBA) on a list of government organizations that were victims of a breach by an alleged Russian hacker. PEBA has multiple layers of security in place to prevent breaches of its information systems. In addition to the security measures PEBA takes, PEBA also uses security services from the South Carolina Department of Information Security Operations Center, which is part of the South Carolina Department of Administration Division of Technology.

 

PEBA’s Information Technology staff followed all incident response procedures, which included conducting an analysis of the agency’s information systems. PEBA’s IT staff also performed a full investigation for evidence of a successful attack and did not find any evidence of a compromise of PEBA’s data.  PEBA IT staff fully debriefed the state security team on the issue and requested that the Department of Administration Division of Technology conduct an analysis as well. The Division of Technology did not find any evidence of a compromise of PEBA’s data. PEBA engaged its third party information technology security services vendor to conduct an independent technical review of the agency’s security controls and the same vendor is conducting an analysis to confirm that no compromise of confidential or restricted data occurred.

 

Briefing paper on state law related to the funding of the state’s public pension plans

February 3, 2017

A recent opinion issued by the South Carolina Attorney General’s Office has been misused to suggest that the state’s public pension plans are not being administered in accordance with state law and actuarially sound practices. In response to the misuse of that opinion, the South Carolina Public Employee Benefit Authority (PEBA) has issued a briefing paper to reassure stakeholders and other interested parties that the state’s public pension plans have been, and will continue to be, administered and funded in full compliance with all applicable state laws and professional actuarial standards of practice. The briefing paper is available online.

 

PEBA complies with laws and standards

January 31, 2017

The South Carolina Public Employee Benefit Authority (PEBA) is aware of the January 10, 2017, opinion released by Solicitor General Robert Cook and disagrees with its conclusions. The opinion does not accurately reflect the funding methods used for the state’s public employee retirement plans. PEBA has and will continue to administer these plans in compliance with all statutory and constitutional requirements, as well as accounting and actuarial standards of practice.

 

PEBA considers the funding of the state’s public employee retirement plans a high priority and is working collaboratively with the Joint Committee on Pension Systems Review, which was established by the South Carolina General Assembly to study and address the plans’ funding, and will continue to do so.

 

EBS, MyBenefits unavailable

January 13, 2017

Employee Benefits Services (EBS) and MyBenefits will be unavailable due to maintenance beginning Friday, January 13 at 5 p.m. through Monday, February 16 at 8:30 a.m.

 

Open enrollment for participants of State ORP

January 3, 2017

An annual open enrollment period for all participants of the State Optional Retirement Program (State ORP) is January 1 to March 1 of each year. During this period, State ORP participants may change their State ORP vendor or, if eligible, may irrevocably elect to participate in the South Carolina Retirement System (SCRS).

 

Details about the 2017 open enrollment period are available online.

 

2017 State Health Plan benefit enhancements

December 30, 2016

Beginning January 1, 2017, the following benefit enhancements will be available for eligible State Health Plan (Standard and Savings Plan) primary members.

  • Blue CareOnDemand State Health Plan primary members enrolled in the Standard Plan or Savings Plan will have access to a new telehealth option, Blue CareOnDemandSM. This platform, operated by BlueCross BlueShield of South Carolina’s telehealth partner, American Well, focuses on live video visits, and uses on-demand technology in which you can request a visit and connect with a provider in less than two minutes. Visit the BlueCross website and select the Blue CareOnDemand icon to learn more about this benefit.
  • Colorectal cancer screenings The State Health Plan provides coverage for routine and diagnostic colonoscopies and in 2017, a convenient, less invasive, early detection take-at-home test will be covered. Both screenings are available to eligible members at no cost. Visit your in-network provider to find out which screening option is best for you. Learn more about this 2017 PEBA Perk at www.PEBAperks.com.
  • Coming Attractions: maternity management This program offers pregnant women and new moms educational materials and counseling sessions conducted by nurses. State Health Plan primary members can sign up for the program to learn how to receive an Ameda electric or manual breast pump from a contracted health care provider at no charge. Learn more about this 2017 PEBA Perk at www.PEBAperks.com.
  • Pap test benefit In addition to the Pap test benefit, based on the recommendation of the United States Preventive Services Task Force, the Standard Plan and Savings Plan will both cover the human papillomavirus (HPV) test every five years in conjunction with a Pap test at no cost to eligible women ages 30 through 65. Learn more about the Pap test benefit here.

 

To learn more about other value-based benefits offered at no cost to State Health Plan primary members, please visit www.PEBAPerks.com.

 

Retirement Systems CAFR published for fiscal year ended June 30, 2016

December 19, 2016

The Comprehensive Annual Financial Report (CAFR) for the South Carolina Retirement Systems for the fiscal year ended June 30, 2016, is now available. The 2015 CAFR is available on the Archives page.

 

SFAA approves retirement contribution rate increases effective 7/1/17

December 13, 2016

At its December 13, 2016, meeting, the State Fiscal Accountability Authority (SFAA) approved the retirement contribution rate increases adopted by the South Carolina Public Employee Benefit Authority (PEBA) Board of Directors at its November 30, 2016, meeting.

 

Effective July 1, 2017, contribution rates will increase by 0.5 percent for the South Carolina Retirement System (SCRS), Police Officers Retirement System (PORS), and the State Optional Retirement Program (State ORP). The rates for SCRS will increase to 9.16 percent for employees and 12.06 percent for employers. The rates for PORS would increase to 9.74 percent for employees and 14.74 percent for employers. The State ORP employee rate will increase to 9.16 percent and the employer rate will increase to 7.06 percent. State ORP employers also remit an additional 5 percent directly to a member’s account for a total contribution of 12.06 percent.

 

More details are available in the December 2, 2016, article below.

 

PEBA releases request for proposal for third-party administration of the flexible benefits plan for employees of the state of South Carolina and local subdivisions

December 9, 2016

PEBA has released a request for proposal (RFP) for third-party administration of the flexible benefits plan for employees of the state of South Carolina and local subdivisions. The RFP is located here: http://www.mmo.sc.gov/PS/PS-eip-solicitations.phtm.

 

Contribution rate increases expected for SCRS, PORS effective 7/1/17

December 2, 2016 (Rev.)

The Board of Directors of the South Carolina Public Employee Benefit Authority (PEBA) voted at its November 30, 2016, meeting to adopt a 0.5 percent increase in both employee and employer contribution rates. The rates for South Carolina Retirement System (SCRS) would increase to 9.16 percent for employees and 12.06 percent for employers effective July 1, 2017. The rates for Police Officers Retirement System (PORS) would increase to 9.74 percent for employees and 14.74 percent for employers effective July 1, 2017.The contribution rates for the State Optional Retirement Program (State ORP) are also expected to increase by 0.5 percent. The State ORP employee rate would increase to 9.16 percent and the employer rate would increase to 7.06 effective July 1, 2017. State ORP employers must also remit an additional 5 percent directly to a member’s account for a total contribution of 12.06 percent.

 

The increases are based on recommendations from the July 1, 2016, actuarial valuations of SCRS and PORS. These valuations are conducted each year to assess the financial condition of the retirement plans. When conducting the valuations, actuaries take into account when employees are expected to retire, how much benefit they are expected to earn, how much they will contribute, as well as projected inflation rates and returns on investment, among other factors.

 

The annual valuations also contain the actuary’s recommendations of the required employee and employer contribution rates necessary to fund the retirement plans on a sound actuarial basis in accordance with the applicable funding statutes and policies. Any recommended changes to the contribution rates must be adopted by the PEBA Board of Directors and are then subject to approval by the State Fiscal Accountability Authority (SFAA). The PEBA Board approved the 0.5 percent increase effective July 1, 2017, due to the plans’ current funding status. The PEBA Board and SFAA have the authority to increase employee and employer contribution rates by up to 0.5 percent.  The PEBA Board and SFAA must raise both employee and employer contribution rates to maintain the current differential between the rates under current statute.

 

Both plans have experienced significant funding shortfalls due in part to lower than expected investment earnings and expected future decreases in investment earnings. According to the July 1, 2016, actuarial valuations, the unfunded liability for SCRS is $18.6 billion and the unfunded liability for PORS is $2.2 billion. The unfunded liability represents the relationship between the eventual payments that the plan will need to make to retirees and the current value of the funds to pay these obligations.

 

Earlier this year, the South Carolina General Assembly established a Joint Committee on Pension Systems Review, a panel of House and Senate members, which has met several times since August and is considering options for maintaining the sustainability of the plans. Learn more about the Committee and its actions on its web page. The rates adopted by the PEBA Board could be modified prior to July 1, 2017, if the General Assembly takes action on SCRS and PORS during the 2017 legislative session.

 

General Assembly joint committee considering funding options for South Carolina Retirement Systems

November 16, 2016

A panel of state lawmakers is reviewing South Carolina’s public employee pension systems this fall.

 

The Joint Committee on Pension Systems Review, a panel of House and Senate members which has met several times since August, is considering future actions for two of the largest pension systems the South Carolina Public Employee Benefit Authority (PEBA) administers: the South Carolina Retirement System and the Police Officers Retirement System.

A summary of PEBA’s role in this process, including background on how the funds operate and their recent history, may be found here in a letter from PEBA Executive Director Peggy G. Boykin.

 

Those interested may also learn more on the General Assembly’s web page for the Joint Committee. All of the information provided to the committee so far is available, including:

• August 30, 2016, meeting: Initial presentation from PEBA providing data and other context for the funds, as well as presentations from the South Carolina Retirement System Investment Commission (RSIC), which manages the investments of the pension systems, and Gabriel Roeder Smith & Company, the actuarial firm which analyzes the systems and projects their future financial experience

• September 27, 2016, meeting: Presentations from many state associations representing the retirement systems’ stakeholders and several retirees

• October 25 and 26, 2016, meetings: Presentations from public policy groups comparing South Carolina’s pension systems to those of other states, as well as recommendations for the committee

• November 10, 2016, meeting: additional presentations from PEBA and RSIC, including funding models and projections.

 

Handouts from all presenting groups are available, as are video recordings of the meetings.

 

Retirement Systems financial statements submitted, published

October 17, 2016

On Friday, October 14, 2016, the South Carolina Public Employee Benefit Authority submitted the financial statements for the South Carolina Retirement Systems for the fiscal year ending June 30, 2016, to the State Auditor’s Office.

 

The fiscal year 2016 financial statements for the Retirement Systems are now available on PEBA’s website here. PEBA has not yet published the financial statements for the health insurance programs the agency manages. Once published, those financial statements will be posted as a separate document.

 

2016 SBCs back on website

October 13, 2016

We inadvertently replaced the 2016 Summaries of Benefits and Coverage (SBCs) with the 2017 summaries when posting the 2017 SBCs for open enrollment. The 2016 SBCs are back on the website in one PDF and are located here. We apologize for any inconvenience this may have caused.

 

PEBA releases request for proposal to provide actuarial review services

October 13, 2016

The South Carolina Public Employee Benefit Authority has released a Request for Proposal (RFP) to Provide Actuarial Review Services. The RFP is located here. Please see the RFP for instructions on asking questions or requesting additional information.

 

PEBA releases request for proposal for a client services vendor

September 19, 2016

The South Carolina Public Employee Benefit Authority has released a Request for Proposal (RFP) for a Client Services Vendor to Facilitate and Support Program Activities. The RFP is located here. Please see the RFP for instructions on asking questions or requesting additional information.

 

S.C. retirement systems funding status update

September 6, 2016

Recent news reports have centered on the funding status of the retirement plans for South Carolina’s public workforce. These reports come in the wake of the first meeting of a legislative committee formed to study the retirement systems and proffer solutions for long term sustainability. As executive director of the South Carolina Public Employee Benefit Authority (PEBA), I appreciate the opportunity to provide you with an explanation of the current status of the retirement systems and to let you know that you will be hearing more in the coming months.

 

I appreciate your concerns about the funding of our retirement systems, as well as the future benefits to be paid to retirees. PEBA serves as the administrator for the state’s five public workforce retirement systems, and we look to the South Carolina General Assembly for direction on the governance of the plans, because they set out the benefits and funding structure for the retirement systems in statute.

 

Before I get into the background of the current circumstances, I want to let you know that the General Assembly is aware of these ongoing challenges, and most recently established a Joint Committee on Pension Systems Review to study what steps may need to be taken now. My staff and I are working to provide this body of lawmakers the information they will need in this effort, as are the staff of our actuary firm and the South Carolina Retirement System Investment Commission, which is responsible for investing and managing the pension trust funds. The group met for the first time August 30, and the initial reports and video of the meeting are available on the Committee’s page on the South Carolina Legislature’s website.

 

Now, I would like to provide you with background on the current state of the systems’ funding, as well as the steps which have been taken recently in its management and the steps which are being taken now. Included with this response are summaries of both the funding history for the South Carolina Retirement System, (SCRS), the largest of state’s public pension plans, and the 2012 retirement reforms enacted by the General Assembly. Read more.

 

Notice of privacy practices updated

September 1, 2016

The South Carolina Public Employee Benefit Authority recently updated its notice of privacy practices. You may view the revised notice here.

 

SFAA approves State Health Plan program changes effective January 1, 2017

August 23, 2016

The State Fiscal Accountability Authority (SFAA) met today and approved a 0.8 percent increase in employer contributions for all health plans for 2017, as well as a 15 percent increase in employer contributions for the State Dental Plan. There are no enrollee increases for 2017. SFAA also approved the following program changes for the State Health Plan:

 

Health insurance

  • State Health Plan primary members enrolled in the Standard Plan or Savings Plan, will have access to a new telehealth option, Blue CareOnDemandSM. This platform, operated by BlueCross’ telehealth partner American Well, focuses on live video visits, and uses on-demand technology in which you can request a visit and connect with a provider in less than two minutes.
  • Ameda manual and electric breast pumps received from a participating provider will be provided at no cost to pregnant subscribers and covered spouses.
  • The State Health Plan’s lifetime limit for hospice services increased to $7,500.

 

Prescription drugs

  • The State Health Plan will adopt the Express Scripts National Preferred Formulary, which is a standard formulary offered by the Plan’s pharmacy benefits manager. A formulary is a list of covered drugs, which includes new and generic drugs. PEBA’s adoption of the National Preferred Formulary will result in the exclusion of about 80 pharmacy products from coverage effective January 1, 2017. State Health Plan members will still have access to comparable medications that are covered by the plan. Members using any of these pharmacy products will receive communications from Express Scripts beginning in October 2016 to notify them of the upcoming change and to offer covered alternatives.

 

These changes were previously adopted by the South Carolina Public Employee Benefit Authority Board of Directors. More information about these changes and premiums for 2017 will be available in the Benefits Advantage newsletter published in September 2016.

 

PEBA Board elects officers

July 22, 2016

At its July 21, 2016, meeting, the South Carolina Public Employee Benefit Authority (PEBA) Board of Directors elected John A. Sowards chairman and Joe W. “Rocky” Pearce, Jr.,  vice-chairman of the PEBA Board.

 

Sowards was appointed chairman in February 2016 following the resignation of Art Bjontegard, the Board's charter chairman. He has served on the PEBA Board since September 2012. Sowards is former chairman of the board for Nexsen Pruet, a position in which he was responsible for shaping the firm’s vision and strategy. A leader within Nexsen Pruet, his practice is focused on the areas of real estate, corporate and finance law.

 

Pearce, also a Board member since September 2012, has served as vice chairman since the Board's first elections in December 2012. He also chairs the Board’s Health Care Policy Committee. Pearce, now retired, was Head of Student Health for American International Group (AIG).

 

June 2016 legislative update

July 8, 2016

The 2016 legislative update includes a summary of legislation related to insurance and retirement benefits that was enacted into law during the 2016 session of the South Carolina General Assembly. The summary is available here.

 

PEBA releases request for proposal to provide tobacco cessation services

July 8, 2016

The South Carolina Public Employee Benefit Authority has released a Request for Proposal (RFP) to Provide Tobacco Cessation Services. The RFP is located here. Please see the RFP for instructions on asking questions or requesting additional information.

 

PEBA remembers Art Bjontegard

June 30, 2016

It is with sadness that we recognize of the passing of Mr. Arthur Bjontegard, the charter Chairman of the PEBA Board of Directors. The leadership and guidance he provided during PEBA’s first years as an agency will endure as PEBA continues its mission. The staff at PEBA will always be grateful for his significant contributions. Our condolences go out to his family. More information can be found here.

 

SFAA approves contribution rate increases effective July 1, 2016

June 22, 2016

The State Fiscal Accountability Authority (SFAA) met today and approved a 0.5 percent increase in employer and employee contributions for fiscal year 2017. The increase was previously adopted by the South Carolina Public Employee Benefit Authority Board of Directors. Effective July 1, 2016, the retirement contribution rates are scheduled as follows:

 

 

Installment service purchase interest rate to change July 1, 2016

June 15, 2016

The interest rate for installment service purchases initiated July 1, 2016, through June 30, 2017, is 5.50 percent. The interest rate is fixed for the term of the installment. This change does not affect installment service purchases initiated prior to July 1, 2016. Please contact PEBA's Customer Contact Center if you have questions at 803.737.6800 or 888.260.9430.

 

Changes to pharmacy network involving out-of-state mail service specialty pharmacies

June 10, 2016

Express Scripts is the administrator of the State Health Plan prescription drug benefit provided by PEBA. Effective July 1, 2016, several out-of-state specialty pharmacies will no longer be part of the PEBA network. Express Scripts has notified impacted members of this upcoming change. As of July 1, 2016, members will be subject to the entire cost of the medication if they use one of these pharmacies. A list of specialty pharmacies that will no longer be in the PEBA network and more information about these changes is available here.

 

Contribution rate increases still expected

June 7, 2016

The State Fiscal Accountability Authority (SFAA) was scheduled to meet June 7, 2016; however, that meeting was postponed. SFAA is still expected to approve a 0.5 percent increase in employer and employee contributions as previously adopted by the South Carolina Public Employee Benefit Authority Board of Directors prior to July 1. Effective July 1, 2016, the retirement contribution rates are scheduled as follows:

 

 

SCRS contribution rates expected to increase 7/1/16

May 17, 2016 – This is a follow up to an article published March 25, 2016.

Increases expected

Employees and employers covered by the South Carolina Retirement System (SCRS) will pay more for their retirement plan if expected increases are approved later this month.

 

The Board of Directors of the South Carolina Public Employee Benefit Authority (PEBA) and the State Fiscal Accountability Authority (SFAA) are expected to adopt a 0.5 percent increase in both employee and employer contribution rates at their May and June meetings; rates would increase to 8.66 percent for employees and 11.56 percent for employers effective July 1, 2016.

 

The anticipated increases are due in part to a $1.5 billion shortfall in expected investment earnings for fiscal year 2015.

Currently, all three versions of the state budget (Governor’s, Senate’s and House of Representatives’) provide for the 0.5 percent employer contribution increase.

 

Funding sources

The state’s defined benefit retirement plans have three sources of funding: employee contributions, employer contributions and investment earnings. If investment returns fall short of the assumptions set for the plans, employee and employer contributions must increase to ensure adequate funding for the plans. The expected rate of investment return for the retirement plans is 7.5 percent. The actual investment return for fiscal year 2015 was 1.6 percent.

 

Additional increases possible

If the PEBA Board adopts and SFAA approves the recommendations to actuarial assumption changes resulting from the 2015 experience study of the plan, SCRS contribution rates for both employees and employers will increase approximately 1.19 percent over the next several years. These increases do not include recognition of investment losses expected to be incurred in fiscal year 2016. Any increases in contribution rates required to account for a fiscal year 2016 investment income shortfall will be determined during the 2016 actuarial valuation, which PEBA expects to receive from the actuaries in late December 2016. The expected 1.19 percent increase could change as a result of the 2016 valuation.

 

Total increases of approximately 2 to 3 percent in both employee and employer contribution rates may be necessary to ensure adequate funding of SCRS and preserve the plan’s ability to pay benefits in the future if investment markets do not turn around soon.

 

Look for updates

As public policymakers discuss the financial requirements for SCRS, PEBA will continue to keep stakeholders informed of what these discussions and decisions will mean for them. While the information in this article is focused on SCRS, the largest of the plans, the other retirement plans will be affected as well.

 

PORS contribution rates expected to increase 7/1/16

May 17, 2016

Increases expected

Employees and employers covered by the South Carolina Police Officers Retirement System (PORS) will pay more for their retirement plan if expected increases are approved later this month.

 

The Board of Directors of the South Carolina Public Employee Benefit Authority (PEBA) and the State Fiscal Accountability Authority (SFAA) are expected to adopt a 0.5 percent increase in both employee and employer contribution rates at their May and June meetings; rates would increase to 9.24 percent for employees and 14.24 percent for employers effective July 1, 2016.

 

The anticipated increases are due in part to a $237 million shortfall in expected investment earnings for fiscal year 2015.

Currently, all three versions of the state budget (Governor’s, Senate’s and House of Representatives’) provide for the 0.5 percent employer contribution increase.

 

Funding sources

The state’s defined benefit retirement plans have three sources of funding: employee contributions, employer contributions and investment earnings. If investment returns fall short of the assumptions set for the plans, employee and employer contributions must increase to ensure adequate funding for the plans. The expected rate of investment return for the retirement plans is 7.5 percent. The actual investment return for fiscal year 2015 was 1.6 percent.

 

Additional increases possible

If the PEBA Board adopts and SFAA approves the recommendations to actuarial assumption changes resulting from the 2015 experience study of the plan, PORS contribution rates for both employees and employers will increase approximately 1.26 percent over the next several years. These increases do not include recognition of investment losses expected to be incurred in fiscal year 2016. Any increases in contribution rates required to account for a fiscal year 2016 investment income shortfall will be determined during the 2016 actuarial valuation, which PEBA expects to receive from the actuaries in late December 2016. The expected 1.26 percent increase could change as a result of the 2016 valuation.

 

Total increases of approximately 2 to 3 percent in both employee and employer contribution rates may be necessary to ensure adequate funding of PORS and preserve the plan’s ability to pay benefits in the future if investment markets do not turn around soon.

 

Look for updates

As public policymakers discuss the financial requirements for PORS, PEBA will continue to keep stakeholders informed of what these discussions and decisions will mean for them.  While the information in this article is focused on PORS, the other retirement plans will be affected as well.

 

PEBA awards contract for third party administration of its health benefits plan

April 20, 2016

The South Carolina Public Employee Benefit Authority (PEBA) has awarded BlueCross BlueShield of South Carolina the contract for administrative services of PEBA’s health benefits plan. View more information here: http://www.mmo.sc.gov/PS/PS-eip-solicitations.phtm.

 

PEBA releases RFP for third party administration of flexible benefits plan

April 11, 2016

The South Carolina Public Employee Benefit Authority (PEBA) has released a Request for Proposal (RFP) for Third Party Administration of the Flexible Benefits Plan for employees of the  state of South Carolina and local subdivisions. The RFP is located here. Please see the RFP for instructions on asking questions or requesting additional information.

 

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