Updated: The state Supreme Court has agreed to hear the case on Tuesday morning.
The commission that oversees South Carolina’s pension fund is suing State Treasurer Curtis Loftis, arguing that his refusal to sign a check for an investment violates the law.
In documents filed Thursday, the Retirement System Investment Commission (SCRSIC) asked the state Supreme Court to take the case directly and order Loftis to write the check to private equity firm Warburg Pincus.
This is the latest chapter in the ongoing feud between Loftis and his fellow commissioners on the panel responsible for overseeing the pension fund’s investments. The current battle is over a long-term contract with Warburg Pincus. Loftis joined with the commission to approve the payment in November, but said he wanted more information before he would authorize it as Treasurer.
Loftis says he is concerned that the contract could lead to some overpayments by the Investment Commission down the road and wants assurances in writing (as opposed to email) from the commission’s attorney that those will not happen. But the commission’s chief operating officer Darry Oliver says the document Loftis is demanding does not exist in a physical form. He says the emails have equal legal validity, which the Treasurer disputes.
Now Oliver says the $11.7 million must be paid by Tuesday, or else the state will be in default. He wants the battle to end. “We believe his duties are ministerial… That means he needs to write the check for a properly approved investment,” he told South Carolina Radio Network.
Oliver says the state is currently paying $1,600 per day in late interest on the investment because of Loftis’s inaction. He says the Treasurer does not have the power to “veto” payments that have already been approved. “It seems, if you read the law, that some would say it’s an abuse of power.”
Loftis said he supports the investment and does not want to hold it up, but says he also wants a guarantee that the contract will not lead to overpayments. “This investment will help the people of South Carolina, but only if it’s properly made,” he told South Carolina Radio Network, “We’ve got to make sure that we’re not paying too much in fees and we’ve got to make sure that the safe-keeping of this money is proper.”
“For five years, the legal sufficiency was spoken… we’ve transmitted billions of dollars on spoken word,” he continued. “That’s not good enough for the people of South Carolina. I demand that we have written documents signed by lawyers.”
Loftis has often criticized the state’s pension system for having a fee structure that is comparatively high and for its heavy reliance on “alternative” investments (aka, not traditional stocks and bonds). SCRSIC Chairman Reynolds Williams maintains that helped the pension earn a nearly 12.4 percent return on its investment in 2012, well above the assumed annual rate of return the state uses. However, Loftis points out that rate still trailed other states.