MISSISSIPPI LEGISLATURE

2000 Regular Session

To: Finance

By: Senator(s) Hyde-Smith

Senate Bill 2972

AN ACT TO CREATE A SEPARATE RETIREMENT SYSTEM FOR SHERIFFS; TO PROVIDE THAT THE SYSTEM SHALL BE ADMINISTERED BY THE BOARD OF TRUSTEES OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM; TO DEFINE ELIGIBILITY FOR MEMBERSHIP IN THE SYSTEM; TO PROVIDE FOR EMPLOYEE AND EMPLOYER CONTRIBUTIONS TO FUND THE SYSTEM; TO ESTABLISH BENEFITS FOR DISABILITY AND SUPERANNUATION RETIREMENT AND ESTABLISH DEATH BENEFITS; TO AMEND SECTION 47-5-901, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE DEPARTMENT OF CORRECTIONS SHALL PAY TO THE SHERIFFS' RETIREMENT SYSTEM ONE DOLLAR PER STATE OFFENDER FOR EACH DAY THAT THE OFFENDERS ARE CONFINED IN THE COUNTY JAILS, TO PROVIDE ADDITIONAL FUNDING FOR THE SYSTEM; TO AMEND SECTIONS 25-15-3, 25-15-9, 25-15-14 AND 25-15-15, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT RETIRED MEMBERS OF THE SHERIFFS' RETIREMENT SYSTEM SHALL BE ELIGIBLE TO PARTICIPATE IN THE STATE EMPLOYEES HEALTH INSURANCE PLAN; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. There is established and placed under the management of the Board of Trustees of the Public Employees' Retirement System a retirement system for the purpose of providing retirement allowances and other benefits under the provisions of this act for the county sheriffs and their beneficiaries. This retirement system shall be known as the "Sheriffs' Retirement System." The retirement system shall go into operation on October 1, 2000, when contributions by members shall begin and benefits shall become payable. This retirement system is designed to supplement and is in addition to the provisions of Section 25-11-1 et seq. Under the terms of this act, sheriffs shall retain all social security benefits under Article I of the Public Employees' Retirement Law of 1952 but shall not be eligible for benefits under Article III of that law. This act is a substitute for and in lieu of Article III of that law, and is designed to provide more liberal benefits for sheriffs by reason of the dangerous nature of and special risk involved in the duties of their office.

SECTION 2. (1) For the purposes of this act, the definitions in Section 25-11-5 and Section 25-11-103 shall apply unless a different meaning is plainly expressed by the context.

(2) As used in this act:

(a) "Board" means the Board of Trustees of the Public Employees' Retirement System.

(b) "Sheriff" means each duly elected county sheriff and each county sheriff appointed to office to fill a vacancy.

(c) "Member" means any person included in the membership of the system as provided in Section 4 of this act.

(d) "System" means the Sheriffs' Retirement System established by Section 1 of this act.

SECTION 3. (1) The general administration and responsibility for the proper operation of the system and for making effective the provisions hereof are vested in the Board of Trustees of the Public Employees' Retirement System.

(2) The board shall invest all funds of the system in accordance with Section 25-11-121.

(3) The board shall designate an actuary who shall be the technical advisor of the board on matters regarding the operation of the system and shall perform such other duties as are required in connection therewith.

(4) At least once in each two-year period following October 1, 2000, the actuary shall make an actuarial investigation into the mortality, service, withdrawal and compensation experience of the members and beneficiaries of the system, and shall make a valuation of the assets and liabilities of the system. Taking into account the result of the investigation and valuation, the board shall adopt for the retirement system such mortality, service, and other tables as shall be deemed necessary. On the basis of those tables that the board adopts, the actuary shall make biennial valuations of the assets and liabilities of the funds of the system.

(5) The board shall keep such data as shall be necessary for the actuarial valuation of the contingent assets and liabilities of the system and for checking the experience of the system.

(6) The board shall determine from time to time the rate of regular interest for use in all calculations, with the rate of five percent (5%) per annum applicable unless changed by the board.

(7) Subject to the limitations hereof, the board from time to time shall establish rules and regulations for the administration of the system and for the transaction of business.

(8) The board shall keep a record of all its proceedings under this act. All books, accounts and records shall be kept in the general office of the Public Employees' Retirement System and shall be public records except for individual member records. The Public Employees' Retirement System shall not disclose the name, address or contents of any individual member records without the prior written consent of the individual to whom the record pertains.

(9) The Executive Director of the Public Employees' Retirement System shall serve as the executive director of this system.

SECTION 4. (1) The membership of the system shall be composed of sheriffs. Membership in the system shall not include deputy sheriffs and secretarial, clerical, stenographic or administrative employees of the office of the sheriff.

(2) All sheriffs eligible for membership in the system as provided in this section who are serving in that capacity on October 1, 2000, shall become members of the system on that date, unless they file with the board within thirty (30) days after October 1, 2000, on a form prescribed by the board, a notice of election not to be covered in the membership of the system and a duly executed waiver of all present and prospective benefits that otherwise would inure to them on account of their membership in the system.

(3) All sheriffs eligible for membership in the system as provided in this section who are elected or appointed after October 31, 2000, shall become members of the system as a condition of holding that office, provided that the sheriff is under the age of fifty-five (55) years at the time of taking office.

(4) Membership in the system shall cease by a member withdrawing his accumulated contributions, or by a member withdrawing from active service with a retirement allowance, or by death of the member.

SECTION 5. (1) Creditable service on which a member's service or disability retirement benefit is based shall consist of prior service and membership service. "Prior service" means service performed before October 1, 2000, for which contributions were made to the Public Employees' Retirement System, and "membership service" means all service for which credit may be allowed under this act after October 31, 2000, and all lawfully credited unused leave as of the date of withdrawal from service, as certified by the employer.

(2) In computing the period of service of a member of the system, anything in this act to the contrary notwithstanding, any member who served on active duty in the Armed Forces of the United States, or who served in maritime service during periods of hostility in World War II, shall be entitled to creditable service for his service on active duty in the Armed Forces or in such maritime service, provided he entered state service after his discharge from the Armed Forces or entered state service after he completed such maritime service. The maximum period for creditable service for all military service shall not exceed four (4) years unless positive proof can be furnished by the person that he was retained in the Armed Forces during World War II or in maritime service during World War II by causes beyond his control and without opportunity of discharge. The member shall furnish proof satisfactory to the board of certification of military service or maritime service records showing dates of entrance into service and the date of discharge. In no case shall the member receive creditable service if the member received a dishonorable discharge from the Armed Forces of the United States.

SECTION 6. (1) The board shall act as custodian of the system, and shall receive to the credit of the system all donations, bequests, appropriations, and all funds available as an employer's contribution thereto from any source whatsoever.

(2) Beginning October 1, 2000, the employers shall cause to be deducted each month from the earned compensation of each member seven and one-fourth percent (7-1/4%) thereof, and shall pay the amount so deducted to the board to be credited to the system. The board may vary the percentage of future employee contributions biennially on the basis of the liabilities of the system for the various allowances and benefits as shown by actuarial valuation. From the funds credited to this account, the board shall pay retirements, disability benefits, survivors benefits, expenses and shall refund contributions as provided in this act. The funds of the system shall be maintained as a separate fund, separate from all other funds held by the board and shall be used only for the payment of benefits provided for by this act or amendments thereto.

(3) Beginning October 1, 2000, on account of each member the employers shall pay monthly into the system from funds available an amount equal to a certain percentage of the earned compensation of each member to be known as the "normal contributions," and an additional amount equal to a percentage of his earned compensation to be known as the "accrued liability contribution." The percentage rate of those contributions shall be nine and three-fourths percent (9-3/4%). The percentage rate of those contributions in the future shall be fixed biennially by the board on the basis of the liabilities of the system for the various allowances and benefits as shown by the actuarial valuation.

(4) In addition to the funding provided for in this section, the system shall be funded from the payments made to the system by the Department of Corrections under Section 47-5-901(8).

(5) The board is authorized to deduct two percent (2%) of all employer contributions paid into the system to be transferred to the expense fund of the Public Employees' Retirement System to defray the cost of administering the system.

SECTION 7. The employers shall pick up the member contributions required by Section 6 of this act for all compensation earned after October 31, 2000. The contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code and Mississippi Income Tax Code. However, the employer shall continue to withhold federal and state income taxes based upon these contributions until the Internal Revenue Service or federal courts rule that pursuant to Section 414(h) of the United States Internal Revenue Code, these contributions shall not be included as gross income of the member until such time as they are distributed or made available. The employer shall pay these member contributions from the same source of funds that is used in paying earnings to the member. The employer may pick up these contributions by a reduction in the cash salary of the member or by an offset against a future salary increase or by a combination of a reduction in salary and offset against a future salary increase. If member contributions are picked up, they shall be treated for all purposes of this act in the same manner and to the same extent as member contributions made before the date the contributions were picked up.

SECTION 8. (1) Upon application of a member or his employer, any active member who has not attained the age of fifty-five (55) years may be retired by the board, not less than thirty (30) and not more than ninety (90) days next following the date of filing the application, on a disability retirement allowance, if the medical board of the Public Employees' Retirement System or other designated governmental agency, after a medical examination, certifies that he is mentally or physically incapacitated for the performance of duty, that the incapacity is likely to be permanent, and that the sickness or injury was caused or sustained as a direct result of duty as a sheriff after October 31, 2000.

Upon the application of a member or his employer, any member who is not yet eligible for service retirement benefits and who has had at least ten (10) years of creditable service may be retired by the board, not less than thirty (30) and not more than ninety (90) days next following the date of filing the application, on a disability retirement allowance, if the medical board or other designated governmental agency, after a medical examination, certifies that he is mentally or physically incapacitated for the further performance of duty, that the incapacity is likely to be permanent, and that he should be retired. This disability need not be service connected.

(2) Upon retirement for disability, a member shall receive a disability benefit equal to fifty percent (50%) of his average compensation for the two (2) years immediately preceding his retirement, but not less than any retirement benefits for which he may be eligible at the date he is granted disability.

(3) Once each year during the first five (5) years following retirement of a member on a disability retirement allowance, and once in every period of three (3) years thereafter, the board may, and upon his application shall, require any disability retiree who has not yet attained the age of fifty-five (55) years to undergo a medical examination. The examination shall be made at the place of residence of the retiree or other place mutually agreed upon by the medical board or other designated governmental agency. If any disability retiree who has not yet attained the age of fifty-five (55) years refuses to submit to any medical examination provided for in this subsection, his allowance may be discontinued until his withdrawal of his refusal, and if his refusal continues for one (1) year, all his rights in that part of the disability benefit provided by employer contributions shall be revoked by the board.

(4) If the medical board or other designated governmental agency reports and certifies to the board, after a comparable job analysis or other similar study, that the disability retiree is engaged in, or is able to engage in, a gainful occupation paying more than the difference between his disability benefit and his average compensation, and if the board concurs in the report, the disability benefit shall be reduced to an amount that, together with the amount earnable by him, equals the amount of his average compensation. If his earning capacity is later changed, the amount of the benefit may be further modified, but the revised benefit shall not exceed the amount originally granted nor an amount that, when added to the amount earnable by the retiree, together with the member's annuity, equals the amount of his average compensation.

(5) If a disability retiree under the age of fifty-five (55) years is restored to active service at a compensation not less than his average compensation, his disability benefit shall cease, he shall again become a member of the retirement system, and he shall contribute thereafter at the same rate he paid before disability. Any such prior service certificate on the basis of which his service was computed at the time of retirement shall be restored to full force and effect. In addition, upon his subsequent retirement he shall be credited with all creditable service as a member, including the period for which he was paid disability benefits.

SECTION 9. (1) Any member upon withdrawal from service upon or after attainment of the age of fifty-five (55) years who has completed at least four (4) years of creditable service, or any member upon withdrawal from service upon or after attainment of the age of forty-five (45) years who has completed at least twenty (20) years of creditable service, or any member upon withdrawal from service regardless of age who has completed at least twenty-five (25) years of creditable service, shall be entitled to receive a retirement allowance that shall be payable the first of the month following receipt of the member's application in the office of the executive director of the system, but in no event before withdrawal from service.

(2) Any member whose withdrawal from service occurs before attaining the age of fifty-five (55) years who has completed four (4) or more years of creditable service and has not received a refund of the member's accumulated contributions shall be entitled to receive a retirement allowance of the amount earned and accrued at the date of withdrawal from service, beginning upon his attaining the age of fifty-five (55) years.

(3) The annual amount of the retirement allowance shall consist of:

(a) A member's annuity, which shall be the actuarial equivalent of the accumulated contributions of the member at the time of retirement, computed according to the actuarial table in use by the system.

(b) An employer's annuity, which, together with the member's annuity provided above, shall be equal to two and one-half percent (2-1/2%) of the average compensation for each year of membership service.

(c) A prior service annuity equal to two and one-half percent (2-1/2%) of the average compensation for each year of prior service for which the member is allowed credit.

(d) In the case of retirement of any member before attaining the age of fifty-five (55) years, the retirement allowance shall be computed in accordance with the formula set forth above in this section, except that the employer's annuity and prior service annuity shall be reduced by three percent (3%) for each year of age below fifty-five (55) years, or three percent (3%) for each year of service below twenty-five (25) years of creditable service, whichever is lesser.

(e) Upon retiring from service, a member shall be eligible to obtain retirement benefits, as computed above, for life, except that the aggregate amount of the employer's annuity and prior service annuity shall not exceed more than eighty-five percent (85%) of the average compensation regardless of the years of service.

SECTION 10. (1) Retired members who on December 1 of each year, or July 1 of each year as provided for in subsection (5) of this section, are receiving a retirement allowance for service or disability retirement, or their beneficiaries, shall receive in one (1) additional payment an amount equal to a cumulative percentage of the annual percentage increase in the Consumer Price Index set by the United States government for the calendar year ending during each fiscal year for each full fiscal year of retirement, not exceeding two and one-half percent (2-1/2%) for any fiscal year, times the amount of the annual retirement allowance. The cumulative percentage provided in this subsection for any particular year shall not be less than the cumulative percentage provided for the previous year.

(2) Retired members who on December 1 of each year are receiving a retirement allowance for service or disability retirement, or their beneficiaries, may receive, in addition to the cumulative percentage provided in subsection (1) of this section, a payment as determined by the board, calculated in increments of one-quarter of one percent (1/4 of 1%), not to exceed one and one-half percent (1-1/2%) of the annual retirement allowance, for each full fiscal year of retirement, but any such payment shall be contingent upon the reserve for annuities in force for retired members and beneficiaries providing sufficient investment gains in excess of the accrued actuarial liabilities for the previous fiscal year as certified by the actuary and determined by the board.

(3) The percentages in this section shall be based on each full fiscal year that the retired member or beneficiary has actually drawn retirement payments from the date of retirement, or the date of last retirement if there is more than one (1) retirement date.

(4) Persons eligible to receive the payments provided in this section shall receive the payments in one (1) additional payment, except that the person may elect by an irrevocable agreement on a form prescribed by the board to receive the payments in not less than equal monthly installments not to exceed six (6) months during the remaining months of the current fiscal year. In the event of death of a person or a beneficiary receiving monthly benefits, any remaining amounts shall be paid in a lump sum to the designated beneficiary.

(5) Retired members or beneficiaries thereof who on July 1 of any fiscal year are receiving a retirement allowance may elect by an irrevocable agreement in writing filed in the office of the Public Employees' Retirement System no less than thirty (30) days before July 1 of the appropriate year, to begin receiving the payments provided for in subsection (1) of this section in twelve (12) equal installments beginning on July 1. This irrevocable agreement shall be binding on the member and subsequent beneficiaries. The cumulative percentage provided in subsection (1) of this section and paid in twelve (12) equal installments for any particular year shall not be less than the cumulative percentage provided for the previous year. However, payment of the installments shall not extend beyond the month in which a retirement allowance is due and payable. Any additional amounts approved by the board under subsection (2) of this section shall be paid in one (1) lump sum payment to retirees and beneficiaries in accordance with subsection (2) of this section.

SECTION 11. (1) Upon the death of any member who has retired from service or disability and who has not elected any other option under Section 12 of this act, the member's spouse shall receive one-half (1/2) the benefit that the member was receiving and each child not having attained the age of nineteen (19) years shall receive one-fourth (1/4) of the member's benefit, but not more than one-half (1/2) of the benefits shall be paid for the support and maintenance of two (2) or more children. Upon each child's attaining the age of nineteen (19) years, the child shall no longer be eligible for the benefit, and when all of the children have attained the age of nineteen (19) years, only the spouse shall be eligible for one-half (1/2) of the amount of the member's benefit. The spouse shall continue to be eligible for the benefit in the amount of fifty percent (50%) of the member's retirement benefit as long as the spouse may live or until remarriage. Upon remarriage of the spouse at any time, the spouse's eligibility for the fifty percent (50%) benefits shall end, but the spouse will be eligible to continue to receive benefits for their children until the last child attains the age of nineteen (19) years.

(2) Upon the death of any member who has served the minimum period required for eligibility for retirement, the member's spouse and family shall receive all the benefits payable to the member's beneficiaries as if the member had retired at the time of death. Those benefits shall cease as to the spouse upon remarriage but shall continue to be payable to each child until he reaches the age of nineteen (19) years. The benefits are payable on a monthly basis.

(3) The spouse and/or the dependent children of an active member who is killed in the line of performance of duty or dies as a direct result of an accident occurring in the line of performance of duty shall qualify, on approval of the board, for a retirement allowance on the first of the month following the date of the member's death, but not before receipt of application by the board. The spouse shall receive a retirement allowance equal to one-half (1/2) of the average compensation of the deceased member. In addition to the retirement allowance for the spouse, or if there is no surviving spouse, a retirement allowance shall be paid in the amount of one-fourth (1/4) of the average compensation for the support and maintenance of one (1) child or in the amount of one-half (1/2) of the average compensation for the support and maintenance of two (2) or more children. Those benefits shall cease to be paid for the support and maintenance of each child upon the child attaining the age of nineteen (19) years; however, the spouse shall continue to be eligible for the retirement allowance provided for the spouse. Benefits may be paid to a surviving parent or lawful custodian of the children for the use and benefit of the children without the necessity of appointment as guardian. That retirement allowance shall cease to the spouse upon remarriage but continue to be payable for each dependent child until the age of nineteen (19) years.

(4) All benefits accruing to any child under the provisions of this act shall be paid to the parent custodian of the children or the legal guardian.

(5) Children receiving the benefits provided in this section who are permanently or totally disabled shall continue to receive the benefits for as long as the medical board or other designated governmental agency certifies that the disability continues. The age limitation for benefits payable to a child under any provision of this section shall be extended beyond age nineteen (19), but in no event beyond the attainment of age twenty-three (23), as long as the child is a student regularly pursuing a full-time course of resident study or training in an accredited high school, trade school, technical or vocational institute, junior or community college, college, university or comparable recognized educational institution duly licensed by a state. A student child whose birthday falls during the school year (September 1 through June 30) is considered not to reach age twenty-three (23) until the July 1 following the actual twenty-third birthday. A full-time course of resident study or training means a day or evening noncorrespondence course that includes school attendance at the rate of at least thirty-six (36) weeks, per academic year or other applicable period with a subject load sufficient, if successfully completed, to attain the educational or training objective within the period generally accepted as minimum for completion, by a full-time day student, of the academic or training program concerned.

SECTION 12. (1) Upon application for superannuation or disability retirement, any member may elect to receive his benefit pursuant to the provisions of Sections 9 and 11 of this act or may elect to receive his benefit in a retirement allowance payable throughout life with no further payments to anyone at his death, except that if his total retirement payments under this act do not equal his total contributions under this act, his named beneficiary shall receive the difference in cash at his death. As an alternative, he may elect upon retirement, or upon becoming eligible for retirement, to receive the actuarial equivalent of his retirement allowance in a reduced retirement allowance payable throughout life with the provision that:

Option 1. If he dies before he has received in annuity payment the value of the member's annuity as it was at the time of his retirement, the balance shall be paid to his legal representative or to such person as he has nominated by written designation duly acknowledged and filed with the board; or

Option 2. Upon his death, his reduced retirement allowance shall be continued throughout the life of, and paid to, such person as he has nominated by written designation duly acknowledged and filed with the board at the time of his retirement; or

Option 3. Upon his death, one half (1/2) of his reduced retirement allowance shall be continued throughout the life of, and paid to, such person as he has nominated by written designation duly acknowledged and filed with the board at the time of his retirement, and the other one half (1/2) of his reduced retirement allowance to some other designated beneficiary; or

Option 4-A. Upon his death, one half (1/2) of his reduced retirement allowance, or such other specified amount, shall be continued throughout the life of, and paid to, such person as he has nominated by written designation duly acknowledged and filed with the board at the time of his retirement; or

Option 4-B. A reduced retirement allowance shall be continued throughout the life of the retirant, but with the further guarantee of payments to the named beneficiary, beneficiaries or to the estate for a specified number of years certain. If the retired member or the last designated beneficiary receiving annuity payments dies before receiving all guaranteed payments due, the actuarial equivalent of the remaining payments will be paid to the estate of the retired member as intestate property.

Option 4-C. The retirement allowance otherwise payable may be converted into a retirement allowance of equivalent actuarial value in such an amount that, with the member's benefit under Title II of the federal Social Security Act, the member will receive, so far as possible, approximately the same amount annually before and after the earliest age at which the member becomes eligible to receive a social security benefit.

(2) Any member in service who has qualified for retirement benefits may select any optional method of settlement of retirement benefits by notifying the executive director of the system in writing, on a form prescribed by the board, of the option he has selected and by naming the beneficiary of the option and furnishing necessary proof of age. The option, once selected, may be changed at any time before actual retirement or death, but upon the death or retirement of the member, the optional settlement shall be placed in effect upon proper notification to the executive director.

(3) No change in the option selected shall be permitted after the member's death or after the member has received his first retirement check, except as provided in subsections (4) and (5) of this section and in Section 16 of this act.

(4) Any retired member who is receiving a reduced retirement allowance under Option 2 or Option 4-A whose designated beneficiary predeceases him, or whose marriage to a spouse who is his designated beneficiary is terminated by divorce or other dissolution, may elect to cancel his reduced retirement allowance and receive the maximum retirement allowance for life in an amount equal to the amount that would have been payable if the member had not elected Option 2 or Option 4-A. The election must be made in writing to the office of the executive director of the system on a form prescribed by the board. Any such election shall be effective the first of the month following the date the election is received by the system.

(5) Any retired member who is receiving the maximum retirement allowance for life, or a retirement allowance under Option 1, and who marries after his retirement may elect to cancel his maximum retirement allowance or Option 1 retirement allowance and receive a reduced retirement allowance under Option 2 or Option 4-A to provide continuing lifetime benefits to his spouse. The election must be made in writing to the office of the executive director of the system on a form prescribed by the board not earlier than the date of the marriage. Any such election shall be effective the first of the month following the date the election is received by the system. The amount of the reduced retirement allowance shall be the actuarial equivalent, taking into account that the member received the maximum retirement allowance or Option 1 retirement allowance for a period of time before electing to receive a reduced retirement allowance.

(6) If the election of an optional benefit is made after the member has attained the age of sixty-five (65) years, the actuarial equivalent factor shall be used to compute the reduced retirement allowance as if the election had been made on his sixty-fifth birthday. However, if a retiree marries or remarries after retirement, and elects either Option 2 or Option 4-A as provided in subsection (5) of this section, the actuarial equivalent factor used to compute the reduced retirement allowance shall be the factor for the age of the retiree and his or her beneficiary at the time that the election for recalculation of benefits is made.

(7) If a retirant and his eligible beneficiary, if any, both die before they have received in annuity payments a total amount equal to the accumulated contributions standing to the retirant's credit in the annuity savings account at the time of his retirement, the difference between the accumulated contributions and the total amount of annuities received by them shall be paid to such persons as the retirant has nominated by written designation duly executed and filed in the office of the executive director. If no designated person survives the retirant and his beneficiary, the difference, if any, shall be paid to the estate of the survivor of the retirant and his beneficiary.

SECTION 13. (1) All persons who are covered under the terms of this act on October 1, 2000, and who become members of the retirement system established by this act shall cease to be members of the Public Employees' Retirement System under the provisions of Section 25-11-101 et seq., upon October 1, 2000, and shall become members of this retirement system with full credit for all prior service performed before October 1, 2000, for which contributions were made to the Public Employees' Retirement System.

(2) In any case in which a sheriff has been a member of the Public Employees' Retirement System under Section 25-11-101 et seq., and has made contributions thereto, all employee's contributions, plus interest credited thereto, inuring to the credit of that person shall be transferred by the Public Employees' Retirement System to the credit of the person in the retirement system established by this act, and shall be considered an asset to the credit of that person in this retirement system.

SECTION 14. If a member of the retirement system ceases to work as a sheriff for any reason other than occupational disease contracted or for any accident sustained by the member by reason of his service or discharge of his duties as a sheriff, and if the member is not eligible for retirement either for service or disability, he shall be refunded the amount of his total contributions under the provisions of this act, including any credit transferred to his account in this system from any other system, at his request, and if he dies before retirement, those funds shall be refunded to any beneficiary that he has named.

If any member who receives a refund reenters service as a sheriff and again becomes a member of the system and remains a contributor for four (4) years, he may repay all amounts previously received by him as a refund, together with regular interest covering the period from the date of refund to the date of repayment. Upon that repayment, the member again shall receive credit for the entire period of creditable service that he forfeited upon the receipt of the refund.

SECTION 15. Regular interest shall be credited annually to the mean amount of the employee reserve account for the preceding year. This credit shall be made annually from interest and other earnings on the invested assets of the system. Any additional amount required to meet the regular interest on the funds of the system shall be charged to the employer's accumulation account, and any excess of earnings over the regular interest required shall be credited to the employer's accumulation account. Regular interest shall mean such percentage rate of interest compounded annually as determined by the board on the basis of the interest earnings of the system for the preceding year. Once that interest is credited it shall be added to the sum of all amounts deducted from the compensation of a member and shall be included in determining his total contributions.

SECTION 16. No person who is being paid a retirement allowance from this system shall serve or be paid for any service as a sheriff. If any member retired under this act returns to service as a sheriff, the retirement allowance shall cease and the member shall become a contributing member of the system and shall be credited with all creditable service at the time of the previous withdrawal of service on a retirement allowance. The retirement allowance payable upon subsequent retirement shall be based on the total creditable service rendered before and after return to service. The total retirement allowance paid to the retired member in his previous retirement shall be deducted from his retirement reserve and taken into consideration in recalculating the retirement allowance.

SECTION 17. The right of a person to an annuity, a retirement allowance or benefit, or to the return of contributions, or to any optional benefits or any other right accrued or accruing to any person under the provisions of this act, the system and the monies in the system created by this act, are exempt from any state, county or municipal ad valorem taxes, income taxes, premium taxes, privilege taxes, property taxes, sales and use taxes or other taxes not so named, notwithstanding any other provision of law to the contrary, and exempt from levy and sale, garnishment, attachment, or any other process whatsoever, and shall be unassignable except as specifically provided otherwise in this act.

SECTION 18. (1) The maintenance of actuarial reserves for the various allowances and benefits under this act, and the payment of all annuities, retirement allowances, refunds and other benefits granted under this act are made obligations of the system. All income, interest and dividends derived from deposits and investments authorized by this act shall be used for the payment of the obligations of the system.

(2) If the system is terminated, all members of the system as of the date of termination of the system shall be deemed to have a vested right to benefits to the extent and in the same manner that rights would be vested under the laws existing as of the date of termination of the system. However, any member who has not fulfilled the requirements for length of service because of a termination of the system shall be entitled to compensation as of the date that the member would otherwise be eligible. That compensation shall be computed on the basis of the time he was actually a member of the system and the compensation he actually earned during the time he was a member, in the manner provided by this act.

If there is a deficit in the availability of funds for payment due under the provisions of the system, an appropriation shall be made that is sufficient for the payment thereof, as an obligation of the State of Mississippi.

(3) Notwithstanding any provisions of this section or this act to the contrary, the maximum annual retirement allowance attributable to the employer contributions payable by the system to a member shall be subject to the limitations set forth in Section 415 of the Internal Revenue Code and any regulations issued thereunder as applicable to governmental plans as that term is defined under Section 414(d) of the Internal Revenue Code. If a member is a participant in any qualified defined contribution plan required to be taken into account for purposes of applying the combined plan limitations contained in Section 415(e) of the Internal Revenue Code, then for any year the sum of the defined benefit plan fraction and the defined contribution plan fraction, as those terms are defined in Section 415(e), shall not exceed one (1). If for any year the foregoing combined plan limitation would be exceeded, the benefit provided under this plan shall be reduced to the extent necessary to meet that limitation.

(4) Notwithstanding any other provision of this plan, all distributions from this plan shall conform to the regulations issued under Section 401(a)(9) of the Internal Revenue Code, applicable to governmental plans, as defined in Section 414(d) of the Internal Revenue Code, including the incidental death benefit provisions of Section 401(a)(9)(G) of the Internal Revenue Code. Further, those regulations shall override any plan provision that is inconsistent with Section 401(a)(9) of the Internal Revenue Code.

(5) The actuarial assumptions used to convert a retirement allowance from the normal form of payment to an optional form of payment shall be an appendix to this act and subject to approval by the board of trustees based upon certification by the actuary.

(6) Notwithstanding any other provision of this plan, the maximum compensation that can be considered for all plan purposes is One Hundred Fifty Thousand Dollars ($150,000.00) per year, adjusted annually to reflect changes in the cost of living to conform to the regulations issued under Section 401(a)(17) of the Internal Revenue Code.

SECTION 19. Section 47-5-901, Mississippi Code of 1972, is amended as follows:

47-5-901. (1) Any person committed, sentenced or otherwise placed under the custody of the Department of Corrections, on order of the sentencing court and subject to the other conditions of this subsection, may serve all or any part of his sentence in the county jail of the county wherein such person was convicted if the Commissioner of Corrections determines that physical space is not available for confinement of such person in the state correctional institutions. Such determination shall be promptly made by the Department of Corrections upon receipt of notice of the conviction of such person. The commissioner shall certify in writing that space is not available to the sheriff or other officer having custody of the person. Any person serving his sentence in a county jail shall be classified in accordance with Section 47-5-905.

(2) If state prisoners are housed in county jails due to a lack of capacity at state correctional institutions, the Department of Corrections shall determine the cost for food and medical attention for such prisoners. The cost of feeding and housing offenders confined in such county jails shall be based on actual costs or contract price per prisoner not to exceed Twenty Dollars ($20.00) per day per offender.

(3) Upon vouchers submitted by the board of supervisors of any county housing persons due to lack of space at state institutions, the Department of Corrections shall pay to such county, out of any available funds, the actual cost of food, or contract price per prisoner, not to exceed Twenty Dollars ($20.00) per day per offender as determined under subsection (2) of this section for each day an offender is so confined beginning the fifth day following the date the offender is committed and taken into custody by the sheriff and will terminate on the date on which the offender is released or otherwise removed from the custody of the county jail, and shall pay the actual cost for medical attention for prisoners unless the Commissioner of Corrections shall find that the costs of any medical services rendered are unreasonable. Such payment shall be placed in the county general fund and shall be expended only for food and medical attention for such persons.

(4) A person, on order of the sentencing court, may serve not more than twenty-four (24) months of his sentence in a county jail if the person is classified in accordance with Section 47-5-905 and the county jail is an approved county jail for housing state inmates under federal court order. The sheriff of the county shall have the right to petition the Commissioner of Corrections to remove the inmate from the county jail. The county shall be reimbursed in accordance with subsection (2).

(5) The Attorney General of the State of Mississippi shall defend the employees of the Department of Corrections and officials and employees of political subdivisions against any action brought by any person who was committed to a county jail under the provisions of this section.

(6) This section does not create in the Department of Corrections, or its employees or agents, any new liability, express or implied, nor shall it create in the Department of Corrections any administrative authority or responsibility for the construction, funding, administration or operation of county or other local jails or other places of confinement which are not staffed and operated on a full-time basis by the Department of Corrections. The correctional system under the jurisdiction of the Department of Corrections shall include only those facilities fully staffed by the Department of Corrections and operated by it on a full-time basis.

(7) An offender returned to a county for post-conviction proceedings shall be subject to the provisions of Section 99-19-42 and the county shall not receive the per day allotment for such offender after the time prescribed for returning the offender to the Department of Corrections as provided in Section 99-19-42.

(8) In addition to paying the counties for the cost of feeding and housing of state offenders confined in the county jails, the Department of Corrections shall pay to the Sheriffs' Retirement System established by Section 1 of this act One Dollar ($1.00) per state offender for each day that the offenders are confined in the county jails until the offenders are released or otherwise removed from the custody of the county jails. The Department of Corrections shall make these payments to the Sheriffs' Retirement System on a monthly basis, from funds appropriated to the department for that purpose.

SECTION 20. Section 25-15-3, Mississippi Code of 1972, is amended as follows:

25-15-3. For the purposes of this article, the words and phrases used herein shall have the following meanings:

(a) "Employee" means a person who works full time for the State of Mississippi and receives his compensation in a direct payment from a department, agency or institution of the state government and any person who works full time for any school district, community/junior college, public library or university-based program authorized under Section 37-23-31 for deaf, aphasic and emotionally disturbed children or any regular nonstudent bus driver. This shall include legislators, employees of the legislative branch and the judicial branch of the state and "employees" shall include full-time salaried judges and full-time district attorneys and their staff and full-time compulsory school attendance officers. For the purposes of this article, any "employee" making contributions to the Public Employees' Retirement System or the Highway Safety Patrol Retirement System shall be considered a full-time employee.

(b) "Department" means the Department of Finance and Administration.

(c) "Plan" means the State and School Employees Life and Health Insurance Plan created under this article.

(d) "Fund" means the State and School Employees Insurance Fund set up under this article.

(e) "Retiree" or "retired employee" means any employee retired under the Public Employees' Retirement System, the Highway Safety Patrol Retirement System or the Sheriffs' Retirement System.

(f) "Board" means the State and School Employees Health Insurance Management Board created under Section 25-15-303.

SECTION 21. Section 25-15-9, Mississippi Code of 1972, is amended as follows:

25-15-9. (1) (a) The board shall design a plan of health insurance for state employees which provides benefits for semiprivate rooms in addition to other incidental coverages which the board deems necessary. The amount of the coverages shall be in such reasonable amount as may be determined by the board to be adequate, after due consideration of current health costs in Mississippi. The plan shall also include major medical benefits in such amounts as the board shall determine. The board is also authorized to accept bids for such alternate coverage and optional benefits as the board shall deem proper. Any contract for alternative coverage and optional benefits shall be awarded by the board after it has carefully studied and evaluated the bids and selected the best and most cost-effective bid. The board may reject all such bids; however, the board shall notify all bidders of the rejection and shall actively solicit new bids if all bids are rejected. The board may employ or contract for such consulting or actuarial services as may be necessary to formulate the plan, and to assist the board in the preparation of specifications and in the process of advertising for the bids for the plan. Such contracts shall be solicited and entered into in accordance with Section 25-15-5. The board shall keep a record of all persons, agents and corporations who contract with or assist the board in preparing and developing the plan. The board in a timely manner shall provide copies of this record to the members of the advisory council created in this section and those legislators, or their designees, who may attend meetings of the advisory council. The board shall provide copies of this record in the solicitation of bids for the administration or servicing of the self-insured program. Each person, agent or corporation which, during the previous fiscal year, has assisted in the development of the plan or employed or compensated any person who assisted in the development of the plan, and which bids on the administration or servicing of the plan, shall submit to the board a statement accompanying the bid explaining in detail its participation with the development of the plan. This statement shall include the amount of compensation paid by the bidder to any such employee during the previous fiscal year. The board shall make all such information available to the members of the advisory council and those legislators, or their designees, who may attend meetings of the advisory council before any action is taken by the board on the bids submitted. The failure of any bidder to fully and accurately comply with this paragraph shall result in the rejection of any bid submitted by that bidder or the cancellation of any contract executed when the failure is discovered after the acceptance of that bid. The board is authorized to promulgate rules and regulations to implement the provisions of this subsection.

The board shall develop plans for the insurance plan authorized by this section in accordance with the provisions of Section 25-15-5.

Any corporation, association, company or individual that contracts with the board for the third-party claims administration of the self-insured plan shall prepare and keep on file an explanation of benefits for each claim processed. The explanation of benefits shall contain such information relative to each processed claim which the board deems necessary, and, at a minimum, each explanation shall provide the claimant's name, claim number, provider number, provider name, service dates, type of services, amount of charges, amount allowed to the claimant and reason codes. The information contained in the explanation of benefits shall be available for inspection upon request by the board. The board shall have access to all claims information utilized in the issuance of payments to employees and providers.

(b) There is created an advisory council to advise the board in the formulation of the State and School Employees Health Insurance Plan. The council shall be composed of the State Insurance Commissioner or his designee, an employee-representative of the institutions of higher learning appointed by the board of trustees thereof, an employee-representative of the Department of Transportation appointed by the director thereof, an employee-representative of the State Tax Commission appointed by the Commissioner of Revenue, an employee-representative of the Mississippi Department of Health appointed by the State Health Officer, an employee-representative of the Mississippi Department of Corrections appointed by the Commissioner of Corrections, and an employee-representative of the Department of Human Services appointed by the Executive Director of Human Services, two (2) certificated public school administrators appointed by the State Board of Education, two (2) certificated classroom teachers appointed by the State Board of Education, a noncertificated school employee appointed by the State Board of Education and a community/junior college employee appointed by the State Board for Community and Junior Colleges.

The Lieutenant Governor may designate the Secretary of the Senate, the Chairman of the Senate Appropriations Committee, the Chairman of the Senate Education Committee and the Chairman of the Senate Insurance Committee, and the Speaker of the House of Representatives may designate the Clerk of the House, the Chairman of the House Appropriations Committee, the Chairman of the House Education Committee and the Chairman of the House Insurance Committee, to attend any meeting of the State and School Employees Insurance Advisory Council. The appointing authorities may designate an alternate member from their respective houses to serve when the regular designee is unable to attend such meetings of the council. Such designees shall have no jurisdiction or vote on any matter within the jurisdiction of the council. For attending meetings of the council, such legislators shall receive per diem and expenses which shall be paid from the contingent expense funds of their respective houses in the same amounts as provided for committee meetings when the Legislature is not in session; however, no per diem and expenses for attending meetings of the council will be paid while the Legislature is in session. No per diem and expenses will be paid except for attending meetings of the council without prior approval of the proper committee in their respective houses.

(c) No change in the terms of the State and School Employees Health Insurance Plan may be made effective unless the board, or its designee, has provided notice to the State and School Employees Health Insurance Advisory Council and has called a meeting of the council at least fifteen (15) days before the effective date of such change. In the event that the State and School Employees Health Insurance Advisory Council does not meet to advise the board on the proposed changes, the changes to the plan shall become effective at such time as the board has informed the council that the changes shall become effective.

(d) Medical benefits for retired employees and dependents under age sixty-five (65) years and not eligible for Medicare benefits. The same health insurance coverage as for all other active employees and their dependents shall be available to retired employees and all dependents under age sixty-five (65) years who are not eligible for Medicare benefits, the level of benefits to be the same level as for all other active participants. This section will apply to those employees who retire due to one hundred percent (100%) medical disability as well as those employees electing early retirement.

(e) Medical benefits for retired employees and dependents over age sixty-five (65) years or otherwise eligible for Medicare benefits. The health insurance coverage available to retired employees over age sixty-five (65) years or otherwise eligible for Medicare benefits, and all dependents over age sixty-five (65) years or otherwise eligible for Medicare benefits, shall be the major medical coverage with the lifetime maximum of One Million Dollars ($1,000,000.00). Benefits shall be reduced by Medicare benefits as though such Medicare benefits were the base plan.

All covered individuals shall be assumed to have full Medicare coverage, Parts A and B; and any Medicare payments under both Parts A and B shall be computed to reduce benefits payable under this plan.

(2) Nonduplication of benefits--reduction of benefits by Title XIX benefits: When benefits would be payable under more than one (1) group plan, benefits under those plans will be coordinated to the extent that the total benefits under all plans will not exceed the total expenses incurred.

Benefits for hospital or surgical or medical benefits shall be reduced by any similar benefits payable in accordance with Title XIX of the Social Security Act or under any amendments thereto, or any implementing legislation.

Benefits for hospital or surgical or medical benefits shall be reduced by any similar benefits payable by workers' compensation.

(3) (a) Schedule of life insurance benefits--group term: The amount of term life insurance for each active employee of a department, agency or institution of the state government shall not be in excess of One Hundred Thousand Dollars ($100,000.00), or twice the amount of the employee's annual wage to the next highest One Thousand Dollars ($1,000.00), whichever may be less, but in no case less than Thirty Thousand Dollars ($30,000.00), with a like amount for accidental death and dismemberment on a twenty-four-hour basis. The plan will further contain a premium waiver provision if a covered employee becomes totally and permanently disabled prior to age sixty-five (65) years. Employees retiring after June 30, 1999, shall be eligible to continue life insurance coverage in an amount of Five Thousand Dollars ($5,000.00), Ten Thousand Dollars ($10,000.00) or Twenty Thousand Dollars ($20,000.00) into retirement; however, retired members of the Sheriffs' Retirement System shall not be eligible for life insurance coverage under the plan.

(b) Effective October 1, 1999, schedule of life insurance benefits--group term: The amount of term life insurance for each active employee of any school district, community/junior college, public library or university-based program authorized under Section 37-23-31 for deaf, aphasic and emotionally disturbed children or any regular nonstudent bus driver shall not be in excess of One Hundred Thousand Dollars ($100,000.00), or twice the amount of the employee's annual wage to the next highest One Thousand Dollars ($1,000.00), whichever may be less, but in no case less than Thirty Thousand Dollars ($30,000.00), with a like amount for accidental death and dismemberment on a twenty-four-hour basis. The plan will further contain a premium waiver provision if a covered employee of any school district, community/junior college, public library or university-based program authorized under Section 37-23-31 for deaf, aphasic and emotionally disturbed children or any regular nonstudent bus driver becomes totally and permanently disabled prior to age sixty-five (65) years. Employees of any school district, community/junior college, public library or university-based program authorized under Section 37-23-31 for deaf, aphasic and emotionally disturbed children or any regular nonstudent bus driver retiring after September 30, 1999, shall be eligible to continue life insurance coverage in an amount of Five Thousand Dollars ($5,000.00), Ten Thousand Dollars ($10,000.00) or Twenty Thousand Dollars ($20,000.00) into retirement.

(4) Any eligible employee who on March 1, 1971, was participating in a group life insurance program which has provisions different from those included herein and for which the State of Mississippi was paying a part of the premium may, at his discretion, continue to participate in such plan. Such employee shall pay in full all additional costs, if any, above the minimum program established by this article. Under no circumstances shall any individual who begins employment with the state after March 1, 1971, be eligible for the provisions of this paragraph.

(5) The board may offer medical savings accounts as defined in Section 71-9-3 as a plan option.

(6) Any premium differentials, differences in coverages, discounts determined by risk or by any other factors shall be uniformly applied to all active employees participating in the insurance plan. It is the intent of the Legislature that the state contribution to the plan be the same for each employee throughout the state.

(7) On October 1, 1999, any school district, community/junior college district or public library may elect to remain with an existing policy or policies of group life insurance with an insurance company approved by the State and School Employees Health Insurance Management Board, in lieu of participation in the State and School Life Insurance Plan. The state's contribution of up to fifty percent (50%) of the active employee's premium under the State and School Life Insurance Plan may be applied toward the cost of coverage for full-time employees participating in the approved life insurance company group plan. For purposes of this subsection (7), "life insurance company group plan" means a plan administered or sold by a private insurance company. After October 1, 1999, the board may assess charges in addition to the existing State and School Life Insurance Plan rates to such employees as a condition of enrollment in the State and School Life Insurance Plan. In order for any life insurance company group plan existing as of October 1, 1999, to be approved by the State and School Employees Health Insurance Management Board under this subsection (7), it shall meet the following criteria:

(a) The insurance company offering the group life insurance plan shall be rated "A-" or better by A.M. Best state insurance rating service and be licensed as an admitted carrier in the State of Mississippi by the Mississippi Department of Insurance.

(b) The insurance company group life insurance plan shall provide the same life insurance, accidental death and dismemberment insurance and waiver of premium benefits as provided in the State and School Life Insurance Plan.

(c) The insurance company group life insurance plan shall be fully insured, and no form of self-funding life insurance by such company shall be approved.

(d) The insurance company group life insurance plan shall have one (1) composite rate per One Thousand Dollars ($1,000.00) of coverage for active employees regardless of age and one (1) composite rate per One Thousand Dollars ($1,000.00) of coverage for all retirees regardless of age or type of retiree.

(e) The insurance company and its group life insurance plan shall comply with any administrative requirements of the State and School Employees Health Insurance Management Board. In the event any insurance company providing group life insurance benefits to employees under this subsection (7) fails to comply with any requirements specified herein or any administrative requirements of the board, the state shall discontinue providing funding for the cost of such insurance.

SECTION 22. Section 25-15-14, Mississippi Code of 1972, is amended as follows:

25-15-14. Any elected state or district official, or any sheriff who is a member of the Sheriffs' Retirement System, who does not run for reelection or who is defeated before being entitled to receive a retirement allowance shall be eligible to continue to participate in the State and School Employees Health Insurance Plan under the same conditions and coverages for retired employees.

SECTION 23. Section 25-15-15, Mississippi Code of 1972, is amended as follows:

25-15-15. (1) The board is authorized to determine the manner in which premiums and contributions by the state agencies, local school districts, colleges, universities, community/junior colleges and public libraries shall be collected to provide the self-insured health insurance program for employees as provided under this article. The state shall provide fifty percent (50%) of the cost of the above life insurance plan and one hundred percent (100%) of the cost of the above health insurance plan for all active full-time employees, and the employees shall be given the opportunity to purchase coverage for their eligible dependents with the premiums for such dependent coverage as well as the employee's fifty percent (50%) share for his life insurance coverage to be deductible from the employee's salary by the agency, department or institution head, which deductions, together with the fifty percent (50%) share of such life insurance premiums of such employing agency, department or institution head from funds appropriated to or authorized to be expended by such employing agency, department or institution head, shall be deposited directly into a depository bank or special fund in the State Treasury, as determined by the board. These funds and interest earned on these funds may be used for the disbursement of claims and shall be exempt from the appropriation process.

(2) The state shall provide annually, by line item in the Mississippi Library Commission appropriation bill, such funds to pay one hundred percent (100%) of the cost of health insurance under the State and School Employees Health Insurance Plan for all full-time library staff members in each public library in Mississippi. The commission shall allot to each public library a sufficient amount of those funds appropriated to pay the costs of insurance for eligible employees. Any funds so appropriated by line item which are not expended during the fiscal year for which such funds were appropriated shall be carried forward for the same purposes during the next succeeding fiscal year. If any premiums for the health insurance and/or late charges and interest penalties are not paid by a public library in a timely manner, as defined by the board, the Mississippi Library Commission, upon notice by the board, shall immediately withhold all subsequent disbursements of funds to that public library.

(3) The state shall annually provide one hundred percent (100%) of the cost of the health insurance plan for all public school district employees who work no less than twenty (20) hours during each week and regular nonstudent school bus drivers. Where federal funding is allowable to defray, in full or in part, the cost of participation in the program by district employees who work no less than twenty (20) hours during the week and regular nonstudent bus drivers, whose salaries are paid, in full or in part, by federal funds, the allowance under this section shall be reduced to the extent of such federal funding. Where the use of federal funds is allowable but not available, it is the intent of the Legislature that school districts contribute the cost of participation for such employees from local funds, except that parent fees for child nutrition programs shall not be increased to cover such cost.

(4) The state shall provide annually, by line item in the community/junior college appropriation bill, such funds to pay one hundred percent (100%) of the cost of the health insurance plan for all community/junior college district employees who work no less than twenty (20) hours during each week.

(5) When the use of federal funding is allowable to defray, in full or in part, the cost of participation in the insurance plan by community/junior college district employees who work no less than twenty (20) hours during each week, whose salaries are paid, in full or in part, by federal funds, the allowance under this section shall be reduced to the extent of the federal funding. Where the use of federal funds is allowable but not available, it is the intent of the Legislature that community/junior college districts contribute the cost of participation for such employees from local funds.

(6) Any community/junior college district may contribute to the cost of coverage for any district employee from local community/junior college district funds, and any public school district may contribute to the cost of coverage for any district employee from nonminimum program funds. Any part of the cost of such coverage for participating employees of public school districts and public community/junior college districts that is not paid by the state shall be paid by the participating employees, which shall be deducted from the salaries of the employees in a manner determined by the board.

(7) Any funds appropriated for the cost of insurance by line item in the community/junior colleges appropriation bill which are not expended during the fiscal year for which such funds were appropriated shall be carried forward for the same purposes during the next succeeding fiscal year.

(8) The board may establish and enforce late charges and interest penalties or other penalties for the purpose of requiring the prompt payment of all premiums for life and health insurance permitted under Chapter 15 of Title 25. All funds in excess of the amount needed for disbursement of claims shall be deposited in a special fund in the State Treasury to be known as the State and School Employees Insurance Fund. The State Treasurer shall invest all funds in the State and School Employees Insurance Fund and all interest earned shall be credited to the State and School Employees Insurance Fund. Such funds shall be placed with one or more depositories of the state and invested on the first day such funds are available for investment in certificates of deposit, repurchase agreements or in United States Treasury bills or as otherwise authorized by law for the investment of Public Employees' Retirement System funds, as long as such investment is made from competitive offering and at the highest and best market rate obtainable consistent with any available investment alternatives; however, such investments shall not be made in shares of stock, common or preferred, or in any other investments which would mature more than one (1) year from the date of investment. The board shall have the authority to draw from this fund periodically such funds as are necessary to operate the self-insurance plan or to pay to the insurance carrier the cost of operation of this plan, it being the purpose to limit the amount of participation by the state to fifty percent (50%) of the cost of the life insurance program and not to limit the contracting for additional benefits where the cost will be paid in full by the employee. The state shall not share in the cost of coverage for retired employees.

(9) The board shall also provide for the creation of an Insurance Reserve Fund and funds therein shall be invested by the State Treasurer with all interest earned credited to the State and School Employees Insurance Fund.

(10) Any retired employee who is not a member of the Sheriffs' Retirement System who elects to purchase retired life and health insurance will have the full cost of such insurance deducted monthly from his * * * retirement allowance from the Public Employees' Retirement System or the Highway Safety Patrol Retirement System or will be direct billed for the cost of the premium if the retirement check is insufficient to pay for the premium. Any retired employee who is a member of the Sheriffs' Retirement System who elects to purchase retired health insurance will have the full cost of such insurance deducted monthly from his retirement allowance from the Sheriffs' Retirement System or will be direct billed for the cost of the premium. If the board determines actuarially that the premium paid by the participating retirees adversely affects the overall cost of the plan to the state, then the department may impose a premium surcharge, not to exceed fifteen percent (15%), upon such participating retired employees who are under the age for Medicare eligibility.

SECTION 24. This act shall take effect and be in force from and after October 1, 2000.