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Article published Jun 18, 2003
State retirement fund has to change, Sanford says

JENNIFER HOLLAND
Associated Press

COLUMBIA -- Retired state employees will have a bit more money added to their pensions starting July 1 to adjust for inflation. But Gov. Mark Sanford and Comptroller General Richard Eckstrom are concerned the state won't be able to afford such adjustments in the future.
The State Budget and Control Board approved a 2.4 percent cost-of-living increase Tuesday after Sanford had delayed the vote one month to review the math behind the adjustments.
A review showed the contribution rate from employees and employers to the state pension fund as well as the return rate on investments won't be enough to support the cost-of-living increases in years to come.
"We are faced with a dilemma that worsens by the year," said Eckstrom, a board member.
A consultant told the five-member board it could cost tens of millions of dollars to fix the problem -- unsavory news considering the budget crisis.
"We do have a crisis that's looming if we don't change the system this year," said Sanford, chairman of the board. "The real question is what do we do with it?"
A watchdog group for state retirees said the solution is not all about money.
Sam Griswold, vice president of the Association of S.C. State Retirees, said his group plans to urge lawmakers to reassess benefits and possible modest contribution increases.
One early retirement program, the Teacher and Employee Retention Incentive, is under scrutiny. The program was created to keep veteran teachers in the classroom by allowing them to work for five years after they retire, earning a salary and accumulating retirement benefits.
"We're not totally convinced TERI is in the best interest of the state," said Griswold.
House Ways and Means Chairman Bobby Harrell, R-Charleston, said it's important for the state to recognize the problem. "We've learned that we have to look very closely at it to make sure it's secure," he said.
"I believe we have a very strong retirement system," said Leatherman, R-Florence. "I don't see this as a tremendous problem."