Retirement system compromise attempted by SC House

Posted: May 31, 2012 at 9:17 am

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Changes for the nearly 500,000 people in the S.C. Retirement System would not take effect until Jan. 1, according to the latest proposal to pass the House of Representatives.

The proposal is an attempt to fix the Retirement System, projected to run out of money. Accountants say the fund will fall $15 billion short of meeting its obligations a deficit that would grow larger each year. Taxpayers would have to make up the difference. Ignoring the problem also would hurt the states credit rating, meaning it would cost the state more to borrow money in the future.

To fix the deficit, state accountants say lawmakers have to make changes to the Retirement System that affect current employees and retirees difficult to do in an election year.

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Both the House and the Senate have passed sweeping proposals to change the retirement system. The original House plan would have paid state workers less once they retired. The plan passed by the Senate would require state employees to work longer before they retire.

Wednesday, the House attempted a compromise between those different plans to mixed results.

Were going in the right direction, said Carlton Washington, executive director of the S.C. Association of State Employees.

Its horrible, said Wayne Bell, president of the State Retirees Association of South Carolina.

Current state workers like the House compromise passed Wednesday because it would not affect the amount of their future retirement benefit checks. It also keeps the controversial TERI program available to current workers, allowing them to earn a paycheck and a retirement check at the same time for up to five years.

However, if retired state workers continue to work after the five-year TERI period, their retirement checks would stop once they earned $10,000 in salary in a year. The retirement checks would start again the following year but only until they reach the $10,000 cap.

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Retirement system compromise attempted by SC House

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May 31st, 2012 at 9:17 am

Posted in Retirement