South Carolina PORS: Payment Options, Refunds, Survivors

Updated October 16, 2026. Quick answer: A South Carolina PORS member chooses among three monthly payment options at retirement, and the handbook says the choice generally cannot be changed once the benefit is first payable. Option A pays the maximum monthly benefit. Option B pays a reduced benefit that continues at 100% for a beneficiary, and Option C continues 50%. The benefit is 2.14% of average final compensation for each year of service. Taking a refund after leaving forfeits any future service retirement or disability benefit, and 20% of the taxable portion is withheld on a refund that is not transferred directly into another qualified plan. The pages read describe no retirement lump-sum option.

More on public pension systems, topic by topic: South Carolina PORS purchasing service credit, South Carolina PORS disability retirement and South Carolina PORS return to work on disability.

What this page covers and what it does not

This page covers the South Carolina Police Officers Retirement System (PORS). The member handbook describes it this way: “The Police Officers Retirement System (PORS) is a defined benefit retirement plan administered by PEBA for public safety employees of state agencies, public higher education institutions, public school districts, charter schools and other local subdivisions of government that have joined PORS.” The page works from the PEBA fiscal year 2027 PORS Member Handbook and the PORS actuarial valuation report as of July 1, 2025, whose appendix summarizes the plan’s benefit provisions. It covers both membership classes and flags where a rule differs. “Class Two members are employees who currently have earned service credit in PORS or a correlated retirement system for a period of service prior to July 1, 2012.” “Class Three members are those members who do not currently have earned service in PORS or a correlated retirement system for a period of service prior to July 1, 2012.”

The statute defines the classes by when membership began. S.C. Code 9-11-10(11A) says: ““Class Three member” means an employee member of the system with an effective date of membership after June 30, 2012.” And 9-11-40(7) says: “Any member who is not a Class Two member shall be a Class One member.” The handbook test about earlier service in a correlated system is not stated in the statute sentences read, so a member who joined PORS after June 30, 2012 with earlier service in another system should ask PEBA which class applies.

The valuation counts 29,000 active members as of July 1, 2025 (“Active members 29,000” in its membership summary). Disability retirement is outside this page. State tax questions are at South Carolina retirement taxes and does South Carolina tax pensions, and the state plan for other public employees is at South Carolina SCRS retirement decisions.

When a PORS pension can start

Service in correlated systems is combined for eligibility: “If you have contributions in more than one of these correlated retirement systems, your service credit is maintained separately within each system; however, your service credit is added together to determine your eligibility for a retirement benefit.”

Retirement is not automatic. “You can file your application as early as six months prior to your desired effective date of retirement but no later than 90 days afterward.” The handbook adds a warning about timing: “Do not terminate employment until PEBA has verified your service credit and you receive written notice of your retirement eligibility from PEBA.”

The statute makes a third condition cumulative with the service or age test. S.C. Code 9-11-60(1)(a) to (c) says: “(a) five or more years of earned service or eight or more years of such service for a Class Three member; (b) attained the age of fifty-five years or has twenty-five or more years of credited service, or twenty-seven or more years of such service for a Class Three member; and (c) separated from service.”

How the monthly benefit is figured

The averaging period differs by class. The handbook says “If you are a Class Two member, your AFC is the 12 highest consecutive quarters” for Class Two, and “If you are a Class Three member, your AFC is the 20 highest consecutive quarters” for Class Three. The multiplier step reads: “Multiply the result of Step 1 by 2.14% (0.0214), which is the benefit multiplier.” Monthly benefit is the AFC times 0.0214 times years of service, divided by 12.

That formula covers Class Two and Class Three service only. The statute pays the sum of three parts. S.C. Code 9-11-60(2) says: “Upon service retirement on or after July 1, 1989, the member shall receive a service retirement allowance which is equal to the sum of (a), (b), and (c) below:” Part (a) reads: “(a) a monthly retirement allowance equal to ten dollars and ninety-seven cents multiplied by the number of years of his Class One service;” Part (c) reads: “(c) an additional monthly retirement allowance which is the actuarial equivalent of the member’s accumulated additional contributions.” And the statute sets a floor: “The sum of the retirement allowances computed under (a) and (b) above may not be less than the allowance which would have been provided under (a) if all of the member’s credited service were Class One service.” Class One service is early service, so most members will see only the 2.14% part.

The statute lets a Class One or Class Two member add leave pay to the average. S.C. Code 9-11-10(7)(a) says: “An amount up to and including forty-five days’ termination pay for unused annual leave at retirement may be added to the average final compensation.” It also says: “Average final compensation for an elected official may be calculated as the average annual earnable compensation for the thirty-six consecutive months before the expiration of his term of office.” The 20 quarter Class Three average carries no such add-on.

A computed example using the handbook’s own inputs (“Member who has 25 years of service credit and an AFC of $30,000”): $30,000 times 0.0214 times 25, divided by 12, is a computed $1,337.50 a month on Option A. A computed example from an assumed $48,000 AFC and an assumed 22 years of service, not a PORS figure, gives a computed $1,883.20 a month before any survivor reduction.

“Choosing Option B or Option C to provide a future benefit for beneficiaries will reduce the amount of your monthly benefit.” The table prices Option A only. The estimate PEBA sends before retirement can move: “The final amount might be less than, or more than, your estimated benefit.”

The election: Option A, B or C

This is the central decision at retirement. “There are three monthly benefit payment options available to you at retirement.” The valuation adds that “In each case the benefit amount is adjusted to be actuarially equivalent” to Option A.

On Option A the handbook says: “After your death, PEBA will return, through a lump-sum payment to your beneficiary or your estate, the remaining balance of any member contributions and interest and any working retiree contributions not exhausted through receipt of your benefit during your retirement.” On Option B: “After your death, the same benefit (100% of your reduced monthly benefit, including granted benefit adjustments) will continue throughout your beneficiary’s lifetime.” On Option C: “After your death, one-half of the benefit (50% of your reduced monthly benefit, including granted benefit adjustments) will continue throughout your beneficiary’s lifetime.” The pages read do not print the size of the reduction for B or C, so PEBA’s own estimate decides the reduced figure.

A computed example from an assumed $1,500 monthly benefit under Option B or Option C, not a PORS figure: at 100% continuation an Option B beneficiary would receive a computed $1,500 a month, and at 50% an Option C beneficiary would receive a computed $750 a month. The trade is a lower payment now for the survivor’s share later, covered at single-life versus joint-and-survivor pension.

Option B has a limit on who can be named, and the handbook says the non-spousal limits do not apply if the non-spousal beneficiary is older than you. “You can select Option B only if your designated beneficiary is your spouse, or you designate multiple beneficiaries or a sole beneficiary who is not your spouse and who is within the 10-year age difference limits allowed by an Internal Revenue Code formula.” Option C has no such limit: “You would be able to select Option C, however, with no IRC restrictions.” The statute words the Option B limit this way. S.C. Code 9-11-150(A) says: “Any retirement allowance payable under this option, except an allowance for disability retirement pursuant to Section 9-11-80, shall be subject to the incidental death benefit limitation upon the payment of survivorship benefits to a nonspouse beneficiary under Section 401(a)(9)(G) of the Internal Revenue Code and Treasury Regulation Section 1.401(a)(9)-6, Q&A-2.”

What is irrevocable, and what can change later

The default is fixed: “Generally, your payment option cannot be changed once your benefit is first payable.” Two events can still reopen it. If every named beneficiary dies first: “If you select Option B or Option C, and all of your designated beneficiaries predecease you, your benefit will revert to Option A, effective in the month following the month the last beneficiary died.” “You must notify PEBA upon the death of a beneficiary.”

A change in marital status opens a window: “If you have a change in marital status (i.e., death of spouse, marriage, divorce), you can also select a new payment option and designate a new beneficiary within five years of the qualifying event.” The window is not a free re-pick. S.C. Code 9-11-150(B)(1) says: “A retired member, within five years after a change in marital status, may revoke the form of monthly payment elected and elect a new form of monthly payment, which must be the actuarial equivalent of the maximum retirement allowance payable to the member under law.” “The new form of monthly payment is effective on the first day of the month in which the election of the new form of monthly payment is received by the system and must be calculated based upon the ages of the retired member and the member’s beneficiary or beneficiaries as of that effective date.” There is also a cap: “Your form of monthly payment cannot be changed more than twice regardless of the number of events” “A reversion to Option A after the death of your beneficiary will count as one of the two changes.”

The pages read do not say whether a spouse must consent to a choice that gives the spouse less than a joint option. The general question is at spousal consent to waive a joint and survivor annuity, and PEBA is the place to confirm how it applies to PORS.

Lump sums at retirement

The documents read describe retirement as a monthly benefit under one of three forms. They do not describe a lump-sum retirement option, a partial lump sum or a deferred retirement option plan (DROP). The lump sums the handbook describes in connection with retirement are the refund after leaving, covered next, the return of unspent contributions to a beneficiary or estate after an Option A retiree dies, and, where the last employer provides incidental death benefit coverage, a service-based payment of $2,000, $4,000 or $6,000 to a non-working retiree’s beneficiaries. The general comparison is at pension lump sum versus monthly annuity break-even.

Leaving before retirement: refund or leave the money

A member who stops covered work has two paths. “You can apply for a refund at a later date or apply for a service retirement benefit upon reaching eligibility.” If the money stays, “When you leave your money in your PORS account, you retain your years of service credit, which can be added to any future service you might accrue should you later become employed in a position covered by one of the correlated retirement systems administered by PEBA”. “Your account will continue to earn interest until it becomes inactive.” The handbook sets the interest rule: “Your active PORS account earns 4% interest compounded annually on your balance as of the previous June 30 until you retire or your account becomes inactive.”

The statute says when an account is inactive. S.C. Code 9-11-265(B) says: “Notwithstanding subsection (A), interest must not be credited to an inactive member account. For purposes of this subsection, a member account becomes inactive on July first if no contributions were made to the account in the preceding twelve months.” Money left on deposit therefore earns interest only until that July 1.

Which path is open depends on service. The valuation’s appendix says: “Class Two members are vested after five years of earned service. Class Three members are vested after eight years of earned service.” “All members who are not vested are eligible for a refund when they terminate service.” “Vested members may also elect to receive a refund in lieu of the deferred termination benefit described below.” Its description of the leave-it route is: “Member must be vested (i.e. five years of earned service for Class Two members and eight years of earned service for Class Three members) and must elect to leave his/her contributions on deposit.”

The handbook pages read state the five-year and eight-year figures as retirement eligibility requirements, so the word vested here comes from the valuation. On July 1, 2025 the valuation counts 2,803 vested inactive members with an average annual deferred benefit of $11,195, and 21,948 nonvested inactive members with an average refund due of $4,400. Those are group averages from the actuary’s tables, not what any one member would receive. See pension refund versus leaving it for the general trade-off.

Taking a refund: what it costs and how it is paid

To ask for money, “you must complete a Refund Request (Form 4101) and return it to PEBA”. Timing is set by law: “by state law, PEBA cannot pay your refund sooner than 90 days after your termination, and PEBA cannot pay it later than six months after the date of your request”. “Your refund will include your employee contributions plus the interest earned on your account.”

The cost is stated plainly: “If you receive a refund, you forfeit your rights to any future service retirement or disability benefit.” “Employer contributions are not refunded.”

On payment: “Instead of having the refund paid directly to you, you can choose to roll over the funds into an IRA, a 401(k) plan, a 401(a) eligible plan, a 403(a) plan, a 403(b) plan or some 457 plans.” “PEBA is required to withhold federal taxes of 20% on the taxable portion of any refund that is eligible for a rollover but is not transferred directly into another qualified retirement plan.” For a person younger than 59½ who does not roll over, “you might also be subject to a 10% penalty tax on the taxable portion of your distribution when you file your income tax return, unless certain exceptions apply”.

A computed example from an assumed $10,000 taxable refund paid straight to the member, not a PORS figure: 20% of $10,000 is a computed $2,000 withheld for federal tax, leaving a computed $8,000 in cash before any further tax or penalty. See 20% withholding on a pension lump sum.

Coming back after a refund, and buying service credit

“If you left employment and received a refund of your contributions plus interest from PORS, you can reestablish this service upon returning to active membership.” “A Class Three member who purchases a period of withdrawn service for any period of covered employment rendered prior to July 1, 2012, will revert to Class Two membership.”

Reestablishing withdrawn service has a price. S.C. Code 9-11-50(G) says: “An active member who previously withdrew contributions from the system may reestablish the service credited to the member at the time of the withdrawal of contributions by repaying the amount of the contributions previously withdrawn, plus regular interest from the date of the withdrawal to the date of repayment to the system.”

On buying service generally: “You can establish service credit through a lump-sum payment, a pre- or post-tax installment service purchase or a tax-deferred rollover from an Individual Retirement Account, a 401(k) plan, a 401(a) eligible plan, a 403(b) plan or a 457 plan.” “The interest rate for an installment service purchase is calculated at the prime rate plus 2%.” “Installments initiated July 1, 2026, through June 30, 2027, will be calculated at 8.75%.” “Payment for service purchases must be made in full prior to your retirement date or termination from employment.” The statute has one exception. S.C. Code 9-11-50(O) says: “An active member who is terminated within one year of retirement eligibility shall have five business days after the date of termination to purchase any service credit that the member is otherwise eligible to purchase under this section.” To weigh a purchase against the extra pension it creates, use the pension buyback calculator.

Cost-of-living adjustments

For retirees the handbook says: “Per current state law, effective each July 1, eligible PORS retirees are to receive an annual benefit adjustment of 1% of their annual benefit up to a maximum of $500 per year.” The statute sets three conditions the word eligible hides. S.C. Code 9-11-312 says: “Only those retirees and their surviving annuitants in receipt of an allowance on July first preceding the effective date of the increase are eligible to receive the increase.” “Any increase in allowance granted pursuant to this section must be included in the determination of any subsequent increase.” And 9-11-315 says: “Notwithstanding any other provision of law, except as provided below, retirees and beneficiaries under the Police Officers Retirement System receiving Medicaid (Title XIX) sponsored nursing home care as of June thirtieth of the prior fiscal year shall receive no increase in retirement benefits during the current fiscal year.” “However, a retired employee affected by the above prohibition may receive the scheduled increase if he is discharged from the nursing home and does not require admission to a hospital or nursing home within six months.” “The earliest you can receive a benefit adjustment is the second July 1 after your date of retirement.” The valuation words the start differently, describing an increase “increased annually in an amount equal to the lesser of 1.00% of the pension benefit or $500 beginning on the July 1st following the receipt of 12 monthly benefit payments”. PEBA can confirm the first adjustment date for a given retirement date.

What the IRS adds on tax

A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of PORS’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. PEBA’s handbook describes the same 20% withholding on a refund that is not moved directly, and lists rollover destinations. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.

On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and distributions to a qualified public safety employee from a governmental plan, provided the employee separated from service during or after the year in which they attained age 50 or 25 years of service under the plan, whichever is earlier. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.

What this page could not settle

• The pages read do not state how much Option B or Option C reduces a given member’s monthly benefit; the valuation says only that each form is actuarially equivalent to Option A, and the handbook table prices Option A alone.
• The pages read do not describe a lump-sum retirement option, a partial lump sum or a DROP.
• The pages read do not state whether a spouse’s consent is required for Option A or for a non-spouse beneficiary.
• The handbook does not use the word vested in the pages read; the five-year and eight-year vesting rule comes from the actuarial valuation’s benefit summary, which is a summary and not the statute.
• The handbook’s service purchase cost floors appear in side boxes whose placement in the text extraction does not tie each percentage to one service type, so no purchase cost is stated here.
• The pages read cite only a few statute sections, for membership categories and the valuation’s investment return assumption, and none that set the benefit terms; the handbook says the plan terms are set out in the applicable statutes and are subject to change, so the benefit statute was not checked.
• The 29,000 active members figure is the valuation’s count as of July 1, 2025; the handbook gives no member count.
• Disability retirement, the incidental and accidental death programs, health insurance in retirement and the earnings-limitation budget exemptions were not examined in depth.

Common mistakes

• Treating the payment option as changeable at will; the handbook says it generally cannot be changed once the benefit is first payable, with limited events and a cap of two changes.
• Assuming a refund keeps a pension door open; the handbook says a refund forfeits any future service retirement or disability benefit.
• Expecting the full refund check; 20% of the taxable portion is withheld unless the money goes directly to another plan.
• Reading the five-year and eight-year thresholds as the only test; Class Three members also have a 27-year service path and different averaging.
• Naming a non-spouse for Option B without checking the age-difference limit the handbook describes; Option C has no such limit.

Related on this site: South Carolina retirement taxes, does South Carolina tax pensions, South Carolina SCRS retirement decisions, pension refund versus leaving it, single-life versus joint-and-survivor pension, pension buyback calculator and public pension retirement decisions by system.

Sources

• South Carolina Public Employee Benefit Authority (PEBA), Fiscal year 2027 Police Officers Retirement System Member Handbook (SCPEBA 082026, expires 06302027): https://www.peba.sc.gov/sites/default/files/pors_handbook.pdf
• South Carolina Public Employee Benefit Authority (PEBA), Police Officers Retirement System (PORS) Actuarial Valuation Report as of July 1, 2025 (letter dated December 4, 2025): https://www.peba.sc.gov/sites/default/files/pors_val_2025.pdf
• IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
• IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558

Sources: the primary documents linked above, read on October 16, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.