The Senate approved a plan Thursday to overhaul the state’s pension system, including allowing billions of dollars more in assets to be invested in the stock market.

The bill is intended to curb growth in the pension system’s debt, which threatens annual cost-of-living increases to retirees.

If approved by the House and signed by the governor, the bill would:

• Create an investment board charged with managing $24 billion in pension assets

• Remove a 40-percent cap on how much of those assets can be invested in stocks

• Restrict who can come back to work after completion of the Teacher and Employee Retention Incentive (TERI) program for retired employees

• Require working state retirees — those in TERI and others who are still working after TERI is complete — to contribute 6 percent to the pension system

• Let employees decide whether to pay more into the system to be able to retire after 28 years or pay less and retire after 30 years

Sen. David Thomas, R-Greenville, said he was wary of investing too much in the stock market, calling it a “liberalized investment scheme.”

Others thought the changes should go even further.

Sen. Greg Ryberg, R-Aiken, argued unsuccessfully that the TERI program should be eliminated because it’s too costly.

“It’s basically a good bill,” he said, “but you need to look at all aspects of the pension plan, and we didn’t address the liabilities.”

Members of a House subcommittee are developing other recommendations — including changes to the TERI program — they hope will become part of the final legislation.

Lawmakers must adopt a plan before the State Budget and Control Board meets in June to consider a 3.4-percent cost-of-living increase for retirees.

Reach Stensland at (803) 771-8358 or jstensland@thestate.com