Senators indicate they want to tweak state system, not make major changes

State employees and retirees worried about dramatic changes to their pension plans might be able to breathe a little easier.

A special Senate committee tasked with rescuing this year’s cost-of-living adjustments for state retirees met Thursday to begin weighing long-term changes in the state’s pension system.

None of the changes on the table Thursday would drastically reshape current benefits.

However, the five senators on the committee, which will continue its work Wednesday, agree some perks of the system might be too costly to continue. “To do nothing is really not an option,” said Sen. Greg Ryberg, R-Aiken.

The problem is this: As the state offered more and more benefits and the return on the pension system’s assets began to sag, cost-of-living adjustments became a much larger burden to bear.

Now the pension system is stretched too thin to be able to offer the adjustments this year and still be considered financially strong by auditors.

Bob Sealy, a retired school administrator from Columbia, said he and other retirees are angry at state officials for not heading off a crisis sooner.

“The system was functioning fine until they started offering all these new benefits without any way to fund them,” he said.

Some changes that could lighten the system’s woes include:

• More of the pension system’s assets could be moved from bonds into the stock market, with the goal of earning a better return.

• Retired employees who have returned to work for state and local governments could be asked to start contributing again to the pension system.

• TERI, a plan that allows retired employees to continue working, could be ended.

• Employees could be asked to work 30 years before retirement instead of the current 28 years.

Each of the proposed changes could trigger legal and political pitfalls. But the retirement committee’s chairman, Sen. Thomas Alexander, R-Oconee, said the group must work fast. “As you can see, we’ve got our work cut out for us.”

House leaders also are studying the pension problem, with some calling for a separate joint House-Senate committee to craft legislation.

In his State of the State address Wednesday, Gov. Mark Sanford called the pension system “a ticking time bomb” and urged a radical overhaul.

Retiree Sealy hopes any changes preserve the heart of the pension plan. “This has got to be a long-term solution. But we really don’t need to dismantle the system in order to fix it.”

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