TERI refund checks on way

State to send more than $30 million to almost 14,000 participants

By JOHN O’CONNOR

johnoconnor@thestate.com

The check is in the mail for thousands of public employees whose pay the S.C. Supreme Court ruled the state had wrongly withheld beginning in 2005.

The state will begin mailing out today $31.8 million in withheld wages and interest to 13,891 participants in the Teacher and Employee Retention Incentive program to meet a court-ordered July 1 deadline.

The money had to be repaid after the court ruled a 2005 law changing the program — which required enrolled workers to begin contributing 6.25 percent of their pay to the retirement system — had broken a contract.

Those contributions were held in a separate account until the lawsuit was resolved.

The average check will be more than $2,300, including 4 percent interest.

Aiken resident Sam Turnipseed already knows how he will spend his roughly $3,000 check — donating it to a mission group that does charity work in Honduras.

“I think the legislators who screwed this up ought to match that contribution,” Turnipseed said. “I’m tickled to death.”

TERI, created in 2000, was designed to keep on the job experienced state employees who might otherwise retire once they reached the 28 years of service required. Enrolled workers no longer paid 6 percent of their salary into the system and could continue to work for an additional five years.

In addition, they began collecting retirement benefits in a special account they could access once they finished their TERI term.

There are a couple of wrinkles to the refunds, according to documents mailed out by the State Budget and Control Board.

Because of how agencies report employment data, some enrolled workers will receive two checks. A second check for wages withheld after March 31 will be mailed out by September.

In addition, the refunds will have federal taxes withheld, which total 10 percent. Workers can return their refund in exchange for a gross check with no taxes withheld, though they will still owe taxes.

The refund checks will have no state taxes withheld and must be reported as income.

For those in the original program, receiving the refund marks the end of a long court battle.

“Right conquers might,” said David FitzGerald, one of four employees who first sued the state over changes to TERI. “We’re glad to be getting our money.”

Though the case is resolved for TERI workers, the money withheld from the paychecks of an additional 9,000 “working retirees” not part of the program is still in limbo. The S.C. Supreme Court made no decision on their status. It instead sent the case back to a lower court.

Reach O’Connor at (803) 771-8358.