COLUMBIA, S.C. - State retirees would get a cost-of-living allowance this summer under a bill given approval Thursday in the final hours of the 2005 session.

Lawmakers said they overhauled the state's retirement system to put it on a firmer financial footing.

The legislation says retirees would be guaranteed at least a 1 percent cost of living allowance each year.

In order to pay for the changes, all workers in the retirement system would pay more in contributions - 6.5 percent during the next year, up from 6 percent now.

Also, workers participating in the Teacher and Employee Retention Incentive, or TERI program, at state agencies would not be covered by a grievance system that protects other workers. The change would not affect teachers and county workers who can take advantage of the program.

The bill now heads to Gov. Mark Sanford's desk.