South Carolina Comptroller General Richard Eckstrom says the “deteriorating condition of the state’s pension fund” is getting worse by $1 billion a year — and that the legislature needs to take it up and fix it when they return to session.
The state’s obligation to pay retirement benefits will not be enough for payouts expected by the next generation of retirees. The state has promised $17 billion in unfunded payments, to be made up over 50 years and that does not suit the Eckstrom, the state’s accountant.
But it’s an election year and Eckstrom says he does not think lawmakers will take on improvements to the retirement system: “Obviously there will be political repercussions from any changes that the board or the General Assembly think need to be made.”
Eckstrom says that the SC Budget and Control Board does not have the power to make the most significant changes, most of which involve changing state law.
“All anyone outside the legislature can do is to make the best argument possible for the most effective changes,” he says. The Comptroller General will try to do that as he testifies to retirement study committees for the House and Senate.
Eckstrom’s idea is to pass a law to discourage state and local government employees from retiring after 28 years. “When a 20-year-old comes to work for the state and is then encouraged after 28 years to draw retirement benefits, that means that they will draw retirement benefits for more years than they actually worked,” says Eckstrom.
Solutions could include increases to what employees or employers pay in, which may also cause some political backlash.
Senate and House panels are meeting for the next few weeks to study the issue, including a few who have championed his concerns, including Sen, Greg Ryberg (R-Aiken).
Without the legislative leadership taking this on, he says, “It’s not going to happen…and the champions (of the issue) don’t come out of the leadership ranks right now,” Eckstrom says.