South Carolina officials look for pension system fixes

Lawmakers hope reform will cut debt

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COLUMBIA — South Car­o­lina’s public employees would need to work a couple of years longer and contribute more toward their retirement under potential fixes to the state’s pension system.

Legislators and Gov. Nikki Haley agree that reforming the pension is a priority when the legislative session resumes in January, as they look for ways to shave the state’s $13 billion debt in benefits promised over the long term. A rough draft on how they could do that faces a vote Monday by a House panel that’s been meeting since September.

Lawmakers will spend next session debating the details, but changes are definitely coming, said House Majority Leader Kenny Bing­ham, a member of the House panel.

“We all have the same goal to make sure we have a system that’s solvent and secure, because if we don’t, it means the state’s not fiscally secure,” said Bingham, R-Cayce.

Possibilities under discussion include requiring employees to work 30 years, up from 28; setting a minimum age of 62 to collect benefits; basing benefits on employees’ last five years of pay, rather than three; and not rolling money paid for unused vacation and sick days at the end of careers into benefit calculations.

Employees would also see their take-home pay reduced, as their retirement contributions increase from 6.5 percent to 7.5 percent.

The proposed legislative changes follow a vote in November by the five-member Budget and Control Board to increase employers’ contributions by nearly a percentage point, to 10.6 percent.

If lawmakers don’t act, the long-term consequence is that the state won’t be able to meet its obligations to public workers, said Rep. Jim Merrill, who is leading the House panel.

“My goal is to guarantee that people in the future will always get their check. That will require a meaningful fix,” said Sen. Greg Ryberg, R-Aiken, who is leading a separate effort in the Senate. “We need to have one that is financially sound.”

Merrill notes that the issue is not confined to public workers. In the near turn, any downgrade in the state’s credit rating would increase the cost of borrowing money for public projects. If agencies have to pony up increasingly more to fill the liability gap and pay retirees, that means taxpayers pay more, he said.

The state’s $13 billion unfunded liability represents the difference in the pension system’s assets and what the state owes everyone currently in the system, including those decades from retiring.

“It’s what we owe in today’s dollars for the benefits they’ve earned,” Ryberg said. So, it’s not an amount the state has to dole out in any lump sum, but putting off a fix now will make it much harder and more expensive to fix in the future, he said.

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Riverman1
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Riverman1 12/11/11 - 01:29 am
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Sounds good to me. Now let's

Sounds good to me. Now let's get Georgia onboard.

KSL
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KSL 12/11/11 - 01:33 am
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I have a friend who is 7

I have a friend who is 7 years younger than I am. I'm not yet 65, but close to it. He has worked for the state of SC since he got out of grad school. He was able to retire several years ago.

KSL
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KSL 12/11/11 - 01:34 am
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Actually, he is almost 8

Actually, he is almost 8 years younger than I am.

Ushouldnthave
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Ushouldnthave 12/11/11 - 07:58 am
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Riverman, Georgia's state

Riverman, Georgia's state retirement system is fiscally sound. It was revamped under Perdue to a very small pension with a modest 401k match. Ga. would be a good model for SC.

soldout
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soldout 12/11/11 - 08:27 am
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If they would use market

If they would use market timers to manage their investments it might help. The best ones are found at timertrac.com. That company tracks them and everything is actual. They are seriously honest. I was 15 seconds late giving them a trade one day and they moved it to the next day. Managers using timing don't take big loses during market turn downs. These timers also make money on market moves down. Look for those with good long track records at timertrac. Lots of folks cannot time the market but it can be done. Market timing got me retired at 51 many years ago and it was a very simple method.

JRC2024
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JRC2024 12/11/11 - 10:37 am
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Are you not bored retiring at

Are you not bored retiring at 51. That is what I worry about. They say old men retire and die. Not ready yet.

socks99
250
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socks99 12/11/11 - 06:31 pm
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The average citizen ought

The average citizen ought realize that politicians, here, were forced to act because they know this unfunded liability threatens to eat away at the state's budget, and ultimately, at the power of the 'tax and spend' majority of elected leaders. No one is likely to raise his or her hand and volunteer that state leaders failed to oversee the pension system; it's just 'lo and behold Bessie has jumped the tracks!'

In any event, the public ought to demand transparency and end the 'gravy-train' that state pension and health care plans have become.

1. Some state workers can 'buy' their way into the system without working a set number of years.
2. The benefits assigned workers, at the top, is political and most states keep pay-outs secret, and that secrecy is to deprive citizens from becoming aware that the political bosses ARE robbing them!
3. Many state workers are aware, and joke about, the fact that in very many cases employees are given boosts in salary just before they retire in order to bump-up their pension benefits.
4. Most state health care plans, similarly, are NOT sustainable and probably can't be saved at all! (Due to skyrocketing health care costs).

Granted, it is nice that some leaders want to fix the system, and equally nice of the media to report on the matter. Still, it'd be nicer if police and prosecutors could investigate to see if their were dirty dealings and prosecutable crimes involved! The politicians made the mess, not the citizens and not retirees!!!

Riverman1
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Riverman1 12/11/11 - 06:45 pm
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Ushouldnthave said,

Ushouldnthave said, "Riverman, Georgia's state retirement system is fiscally sound. It was revamped under Perdue to a very small pension with a modest 401k match. Ga. would be a good model for SC."

I don't know about that. From what I've read the entire budget for the state of Georgia will go to pay the health care costs of state retirees in about 15-20 years. Something has to give.

soldout
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soldout 12/11/11 - 10:01 pm
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jrc I retired but have been

jrc I retired but have been very busy ever since doing a lot of ministry. Also have a small part time business that I do for fun but don't have to have the money. The extra money helps me to bless a few folks and do the Lords work. Figuring out better timing systems for the stock market keeps me busy too.

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