COLUMBIA - The South Carolina Supreme Court has upheld its ruling that the state shouldn't have deducted pension contributions from 14,000 working retirees, giving the state until July 1 to issue around $30 million in refunds.

The justices Thursday unanimously rejected the state's request it reverse a May 4 ruling ordering refunds to retirees who signed up for the Teacher and Employee Retention Incentive program before July 1, 2005.

The order also called for the state to pay back the money at 6 percent interest. If the refunds take more than 30 days, the interest rate jumps to 11.25 percent, the justices said.

The state will immediately stop taking pension contributions out of paychecks of affected workers and should have most of the money paid back in 30 days, said Mike Sponhour, spokesman for the State Budget and Control Board.

Under the TERI program, retirees can work up to five years after they retire and accumulate pension benefits. Their money is held in a no-interest account to be paid out in a lump sum at the end of the program or rolled into a qualifying retirement fund.

The Supreme Court's May 4 ruling said the state broke a contract with the TERI workers when it deducted pension contributions from their paychecks.

The state doesn't plan to appeal Thursday's decision to uphold the initial ruling, Sponhour said.

"The taxpayers and retirees and workers are losers in this case," he said. "We remain strongly concerned that the plaintiffs lawyers will receive a huge windfall at the taxpayers expense."

But for workers, Thursday's decision was welcome. "It's such an incredible sense of relief," said Sandra Balthis, who teaches at Ridge View High School in Columbia. "Its been an emotional roller-coaster."

The justices sent a few issues back to a circuit court to decide.

The lower court will consider whether another group of working retirees not covered under the TERI program is entitled to any refunds.A circuit judge also will decide how much the attorneys for the TERI workers will receive.

Attorneys for the state have estimated the fees could be as much as $50 million.