COLUMBIA - More than 84,000 S.C. retirees enrolled in the state's pension system could see their last cost of living adjustment this spring, state officials warn.

That would mean that, starting in 2006, seniors would not get the bump of hundreds of dollars they expect to keep up with inflation unless the General Assembly makes big changes to the system.

But all options to save the adjustments are politically and financially costly, and some officials say retirees have reason to worry.

State Comptroller General Richard Eckstrom is a member of the State Budget and Control Board and a trustee of the pension system. He has called for reforms in the retirement system for years.

"At some point, the state is going to face a financial crisis of epic proportions," he said. Some call those claims irresponsible and insist the retirement system is doing fine.

But the immediate problem is not in dispute. The state retirement system has a $3.4 billion unfunded liability that has placed the adjustments in serious jeopardy.

Beginning next year, it's expected to take 30 years to pay off all the state's obligations to those enrolled in the system. It is that 30-year debt ceiling that blocks the retirement system from spending on anything but the benefits promised to retirees.

According to state law, retirees are not entitled to cost of living adjustments, although they have always been provided in the past.

Peggy Boykin, director of the S.C. Retirement System said projections show 2006 will be the first year the retirement system can't pay adjustments.

To pay for the adjustments in 2006, the General Assembly has few good options.

Lawmakers could:

Raise the amount of money deducted from state and local agencies and the 199,000 current employees enrolled in the plan. Agencies already are stretched thin, and a change would double paycheck contributions for current workers to about 12 percent.

Spend more than $250 million a year in state funds to pay for the adjustments. This would almost certainly require a tax increase or further slashing of state agency budgets, already subjected to three years of across-the-board spending cuts due to lagging state revenues.

Change the benefits future retirees are entitled to. That could include scrapping the popular TERI program and raising the number of years an employee must work before collecting benefits. The TERI program allows longtime employees to continue working for five years without paying into the system. They collect full benefits when they retire.

House Ways and Means Committee chairman Bobby Harrell, R-Charleston, said lawmakers are committed to finding a way to pay for the cost of living adjustments.