Retired state employees aren't likely to be getting cost of living adjustments, or COLAs, this year unless changes are made to the state's retirement system, its director said Friday.

Peggy Boykin told reporters that COLAs are not required by law, but retirees have come to expect them. Economic advisors say that the state would need to give retirees an increase of 3.4 percent to keep up with inflation.

The system doesn't have enough money to pay for the cost of living adjustments and remain financially sound.

Gov. Mark Sanford has proposed ending the TERI program and raising retirement from 28 years to 30. But that wouldn't save enough immediately to allow a COLA, Boykin says.

TERI, or Teacher and Employee Retention Incentive, was passed as a way for the state to keep good employees and teachers. It allows them to retire but then keep working and drawing their salary. They don't pay into the retirement system anymore, but their employer does, adding to their future retirement benefits at no cost to the employee.

When they went into effect in 2000, TERI and 28-year retirement cost the state retirement system $1.8 billion.

Elementary school principal Cynthia Detuelo turned in her paperwork just this week to join the TERI program. She's worried by the talk of eliminating it.

"There are a lot of people in this profession who can retire soon," she says. "And we're at a shortage. So if you start to take those people and send them away or have a reason for them to say, 'That's it. I'm walking out of this,' we could all be impacted by that."

There are options to provide retirees with a COLA, since ending TERI won't be enough to pay for it. The state Budget and Control Board will have to decide what to do.

One option is to give a cost of living increase and pay for it out of the state's general budget. But that takes away much-needed money from other programs. Another option would be to increase the contributions that current state employees are making into the system. But after years of not getting any pay raises and seeing their health insurance costs go up, that wouldn't be a popular choice, either.