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Article published Dec 14, 2003
State retirement benefit is too broad and too
expensive
South Carolina lawmakers should phase out a new
retirement benefit that has grown beyond its purpose and is costing the state
too much money.The Teacher and Employee Retention Initiative (TERI) was created
in 2000 in response to a specific need. Some school districts were having a
problem retaining qualified teachers in specific areas of instruction.But the
program does not apply to just specific districts and areas of instruction. It
applies to almost all state, county and municipal employees.In fact, since it
was created, more than 13,000 state employees have taken advantage of it. Fewer
than half of them are teachers.The initiative allows those employees to retire
after 28 years of service and continue to work, earning their regular salary
while their retirement benefits are held in a special savings account. While the
retired employee works, he makes no contribution to the state retirement system,
but his employer must.All this costs the state retirement system a great deal of
money. The Governor's Management, Accountability and Performance Commission
determined that ending the program would reduce the unfunded liability of the
state retirement system by $650 million. The commission recommended ending the
program.The initiative also costs counties, municipalities and school districts.
Retiring state employees get a payout for up to 45 days of unused annual leave.
If they continue to work under the initiative, when they leave, they can get a
second payout for 45 days of unused leave. That one provision alone is expected
to cost $85 million over the next five years.A bill to end the TERI program has
been working its way through the Senate, and a bill has now been introduced in
the House as well. Lawmakers should follow the recommendation of the MAP
Commission and save the $650 million.If teacher retention is still an issue,
another method of keeping valued teachers should be found. This program does not
allow the state or its subdivisions to retain only key people. It applies to any
state em-ployee who chooses to take advantage of it.This program is too
expensive and too broad. The state can no longer afford it.