As used in this article:

(1) "Actuarial accrued liability" means that portion, as determined by a particular actuarial cost method, of the actuarial present value of fund obligations and administrative expenses which is not provided for by future normal costs.

(2) "Actuarial assumptions" means assumptions regarding the occurrence of future events affecting costs of the SCRHI Trust Fund or LTDI Trust Fund such as mortality, withdrawal, disability, and retirement; changes in compensation; aging effects and cost trends for post-employment benefits; benefit election rates; rates of investment earnings and asset appreciation or depreciation; procedures used to determine the actuarial value of assets; and other such relevant items.

(3) "Actuarial cost method" means a method for determining the actuarial present value of the obligations and administrative expenses of the SCRHI Trust Fund or LTDI Trust Fund and for developing an actuarially equivalent allocation of such value to time periods, usually in the form of a normal cost and an actuarial-accrued liability. Acceptable actuarial methods are the aggregate, attained age, individual entry age, frozen attained age, frozen entry age, and projected unit credit methods.

(4) "Actuarial present value of total projected benefits" means the present value, at the valuation date, of the cost to finance benefits payable in the future, discounted to reflect the expected effects of the time value of money and the probability of payment.

(5) "Actuarial valuation" means the determination, as of a valuation date, of the normal cost, actuarial accrued liability, actuarial value of assets, and related actuarial present values for the SCRHI Trust Fund or LTDI Trust Fund.

(6) "Actuarially sound" means that calculated contributions to the SCRHI Trust Fund or LTDI Trust Fund are sufficient to pay the full actuarial cost of these trust funds. The full actuarial cost includes both the normal cost of providing for fund obligations as they accrue in the future and the cost of amortizing the unfunded actuarial accrued liability over a period of no more than thirty years.

(7) "Administrative expenses" means all expenses incurred in the operation of the SCRHI Trust Fund and LTDI Trust Fund, including all investment expenses.

(8) "LTDI Trust Fund" means the Long Term Disability Insurance Trust Fund established pursuant to Section 1-11-707 to fund benefits under the state's Basic Long Term Disability (BLTD) Income Benefit Plan.

(9) "Board" means the Board of Directors of the South Carolina Public Employee Benefit Authority.

(10) "Employee insurance program" or "EIP" means the office of the South Carolina Public Employee Benefit Authority designated by the board to operate insurance programs pursuant to this article.

(11) "IBNR" means unpaid health claims incurred but not reported. The liability for IBNR claims is actuarially estimated based on the most current historical claims experience of previous payments, inflation, award trends, and estimates of health care trend changes.

(12) "Operating account" means the health insurance program's business operating activities account maintained by the State Treasurer in which are deposited all premiums for enrollees in self-funded health plans authorized in this article, along with employer contributions for active employees covered by such self-funded health plans, and from which claims and administrative expenses of the self-funded health and dental plans administered by the employee insurance program are paid.

(13) "State-covered entity" means state agencies and institutions, however described, and school districts. It also includes political subdivisions of the State that participate in the state health and dental plans.

(14) "State health and dental plans" means any insurance program administered by the employee insurance program pursuant to this article.

(15) "SCRHI Trust Fund" means the South Carolina Retiree Health Insurance Trust Fund established pursuant to Section 1-11-705 to fund the employer cost for health benefits for retired state employees and retired public school district employees.

(16) "State Retirement System" or "State Retirement Systems" means all retirement systems established pursuant to Title 9 except for the National Guard Retirement System.

(17) "Unfunded actuarial accrued liability" means for any actuarial valuation the excess of the actuarial accrued liability over the actuarial value of the assets of the fund under an actuarial cost method utilized by the fund for funding purposes.

(18) "Trust fund paid premiums" means the employer premium for state health and dental plans coverage paid by the SCRHI Trust Fund on behalf of a retiree. When it is expressed as a percentage of trust fund paid premiums, it means that the SCRHI Trust Fund shall pay the stated percentage of the employer premiums, with the retiree paying the balance of the employer premiums and the entire employee premium.

HISTORY: 2008 Act No. 195, Section 3, eff May 1, 2008; 2012 Act No. 278, Pt IV, Subpt 2, Section 31, eff July 1, 2012.

Editor's Note

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."

Effect of Amendment

The 2012 amendment substituted "Board of Directors of the South Carolina Public Employee Benefit Authority" for "State Budget and Control Board" in subsection (9); and substituted "South Carolina Public Employee Benefit Authority" for "board" in subsection (10).