Public employees are asking legislators to do what they can to fix South Carolina’s hemorrhaging pension system — which faces a roughly $18 billion gap in unfunded liabilities it has promised retirees in the future. But those employees are begging that those changes not include further cuts to the their paychecks or benefits.
Members of the Joint Committee on Pension Systems Review heard from members of the public on Tuesday, under orders not to ask any questions or debate ideas of their own at this particular hearing. Most of the speakers were either state employees or representatives from their advocacy organizations. And nearly all warned of severe consequences with recruiting, hiring and retaining state employees if more was demanded from their paycheck to keep the state’s retirement system solvent.
“The challenge this committee faces is certainly not an easy one,” SC State Employees Association executive director Carlton Washington told the panel. “Our state employees, however, should not be forced to bear that burden.” He said South Carolina’s public employees tend to earn less than their counterparts in other Southern states.
South Carolina Sheriffs Association executive director Jarrod Bruder warned the state is already having a difficult time recruiting new police officers partly because so much of their salary is withheld to pay for the Police Officers Retirement System. “If low pay, working weekends and holidays and laying your life on the line every day was not enough to deter quality individuals from a career in public safety, they must now also consider that over ten percent of their paycheck will soon be going to the retirement system,” he told the committee.
State employees currently pay 8.66 percent of their paychecks into the retirement system. Legislators tried to offset that with a 3 percent across-the-board raise in the current budget year. The contribution rate is even higher (9.24 percent) for officers, who have their own separate retirement fund. Government employers pay 11.65 percent for each employee in the primary retirement fund. All the rates have recently been increased in an effort to offset the fund’s struggling investments, which have failed to meet the 7.5 percent growth required to stay solvent for most of the past decade.
But Comptroller General Richard Eckstrom warns legislators have been overvaluing the fund for years. When combined with risky ventures made by the state’s Investment Commission, he said it puts the system’s very future at risk after another generation. “It is abundantly clear the long-term health of the plan is in peril,” he told committee members.
Legislators on the joint committee plan to submit recommendations before January on ways to reduce the state’s growing pension debt.