(A) There is established in the State Treasury separate and distinct from the general fund of the State and all other funds the South Carolina Retiree Health Insurance Trust Fund (SCRHI Trust Fund) to provide for the employer costs of retiree post-employment health insurance benefits for retired state employees and retired employees of public school districts. Earnings on the SCRHI Trust Fund must be credited to it and unexpended funds carried forward in it to succeeding fiscal years.
(B) The board is the trustee of the SCRHI Trust Fund and the State Treasurer is the custodian of the funds of the SCRHI Trust Fund.
(C) The employee insurance program shall administer the SCRHI Trust Fund.
(D) The employee insurance program shall engage actuarial and other services as required to transact the business of the SCRHI Trust Fund. The actuary engaged by the employee insurance program shall provide technical advice to the board regarding operation of the SCRHI Trust Fund.
(E) Upon recommendations of the actuary, the board shall adopt generally accepted and reasonable actuarial assumptions and methods for the operation and funding of the SCRHI Trust Fund as it considers necessary and prudent. The actuarial assumptions and methods adopted by the board must be appropriate for the purposes at hand and must be reasonable, individually and in the aggregate, taking into account the experience of the plan and reasonable expectations. Utilizing the actuarial assumptions most recently adopted by the board, the actuary engaged by the employee insurance program shall set the annual actuarial valuations of normal cost, actuarial liability, actuarial value of assets, and related actuarial present values for the SCRHI Trust Fund.
(F) The board may adopt policies and procedures and promulgate regulations as necessary for the proper administration of the SCRHI Trust Fund.
(G)(1) The funds of the SCRHI Trust Fund must be invested and reinvested by the State Treasurer in the manner allowed by law. The State Treasurer shall consult with the employee insurance program and the employee insurance program's actuary to develop an annual investment plan for the SCRHI Trust Fund taking into account the cash flow needs of the employee insurance program with regard to payment of the employer share of premiums and claims for covered retirees.
(2) Effective beginning with the first fiscal year after the ratification of an amendment to Section 16, Article X of the Constitution of this State allowing funds in post-employment benefits trust funds to be invested in equity securities, the Retirement System Investment Commission (RSIC) established pursuant to Chapter 16 of Title 9, shall invest and reinvest the funds of the SCRHI Trust Fund as assets of a retirement system are invested. The chief investment officer shall consult with the employee insurance program and the employee insurance program's actuary to develop an annual investment plan for the SCRHI Trust Fund taking into account the cash flow needs of the employee insurance program with regard to payment of the employer share of premiums and claims for covered retirees. After the initial fiscal year the RSIC assumes this investing function, the annual investment plan for the SCRHI Trust Fund must be approved by the commission no later than June first of each year for the fiscal year beginning July first of the same calendar year.
(H) The board annually shall determine the minimum annual required contributions to the SCRHI Trust Fund on an actuarially sound basis in accordance with Governmental Accounting Standards Board Statement No. 45, or any other Governmental Accounting Standards Board statements that may be applicable to the SCRHI Trust Fund.
(I) The board shall fund the SCRHI Trust Fund:
(1) through the employer contributions for the South Carolina Retirement Systems as provided in Section 1-11-710(A)(2). The total employer contributions collected from the State and school districts for post-employment benefits must be transferred immediately to the SCRHI Trust Fund for investment, reinvestment, and the payment of post-employment benefits;
(2) by transfer of the Employee Insurance Program as of January thirty-first of each calendar year to the trust fund from the employee insurance program's operating account, the cash balance in the operating account in excess of one hundred forty percent of the actuarially-determined IBNR reserves of the state's health plans as of December thirty-first of the preceding year. On May 1, 2008, an initial transfer must take place applicable to the cash balance as of December 31, 2007; and
(3) with funding as authorized by the General Assembly pursuant to Section 1-11-710(D).
(J) Each month, the employee insurance program shall determine the monthly amount of the state-funded employer premium with respect to retired state employees and retired public school district employees who are eligible for state-paid employer premiums pursuant to Section 1-11-730, and shall transfer this amount to the operating account from the SCRHI Trust Fund. In addition, the employee insurance program shall transfer the total cost of post-employment benefits for retirees and their dependents, net of premium contributions made on behalf of retirees and other sources of revenue attributable to retirees, in accordance with Governmental Accounting Standards Board Statements Nos. 43 and 45 and the Implementation Guide.
(K) The funds of the SCRHI Trust Fund may only be used for the payment of employer-provided other post-employment benefits under the terms of the state health and dental plans. The administrative costs related to the administration of the SCRHI Trust Fund, and the investment and reinvestment of its funds, may be funded from the earnings of the SCRHI Trust Fund.
(L) As a trust, the funds of the SCRHI Trust Fund are not assets of the State or the school districts or their respective agencies. The contributions to the SCRHI Trust Fund are irrevocable and may not revert to the employer except upon complete satisfaction of all liabilities and administrative expenses of the state health and dental plans of other post-employment benefits provided pursuant to the state health and dental plans.
HISTORY: 2008 Act No. 195, Section 3, eff May 1, 2008.
Editor's Note
2008 Act No. 195, Section 7, provides as follows:
"The Code Commissioner shall insert the effective date of this act [May 1, 2008] for the phrase 'reference date' where it appears in Section 1-11-705 of the 1976 Code as added by this act and in Section 1-11-730 of the 1976 Code as amended by this act."
2008 Act No. 195, Section 8, provides as follows:
"This act takes effect on the first day of the month following the month during which this act is approved by the Governor [approved April 2, 2008]."
2012 Act No. 278, Pt IV, Subpt 3, Section 65(C), provides as follows:
"(C) The Code Commissioner is directed to change or correct all references to the Employee Insurance Program, the Retirement Division, and the Deferred Compensation Commission to reflect its transfer to the South Carolina Public Employee Benefit Authority. References to the name of the Employee Insurance Program, the Retirement Division, and the Deferred Compensation Commission in the 1976 Code or other provisions of law are considered to be and must be construed to mean appropriate references."