A group of state senators and representatives tasked with shoring up South Carolina’s flagging pension system are working on ways to make the fund more secure for the long-term.
The Joint Committee on Pension Systems Review held the first of a second round of meetings this week, weeks after its plan to recharge the state’s retirement fund became law. The proposal had public agencies devote more tax dollars into the plans to help close a $20 billion gap between what the state has promised future retirees versus what it is expected to have on hand.
The group will recommend whether retirement options need to change for new public-sector employees and moving toward only offering a 401 (k) retirement plan. State Rep. Gilda Cobb-Hunter, D-Orangeburg, said they should look at a state that switched its plan for one employee sector. “I think it was West Virginia that had teachers that they went to a defined contribution plan then came back,” Cobb-Hunter said at the meeting.
State Rep. Bill Whitmire, R-Walhalla, said he would like the group to take a look at how similar funds in other states are working. “I’d like to hear from other states that have been successful in retirement systems. Obviously some of them are in the same boat as we are, maybe worse. There seem to be some doing very well,” said Whitmire at a committee meeting this week.
State Sen. Sean Bennett, R-Dorchester said the committee should look at what other parts of the workforce are doing. “I think we need to hear from the private sector and the industry that plays in this marketplace,” said Bennett.
The group had a key bill passed this year to help shore up the state’s financially trouble pension system. Under the new legislation starting July 1 public-sector employees across South Carolina will pay nine percent of their salaries into the retirement system up from 8.7 percent.
The government agencies that employ those workers will eventually have to pay 18.56 percent of each worker’s income into the pension fund.