Refund for working retirees in Friday's paycheck

Associated Press

COLUMBIA, S.C. - Nearly 14,000 working retirees employed by the state will see more money in their paychecks Friday, as South Carolina begins to fulfill a state Supreme Court order to refund pension contributions.

The high court ordered the state in May to refund retirees who signed up for the Teacher and Employee Retention Incentive program before July 1, 2005. The court upheld its ruling June 1 and gave the state until Saturday to pay the money back at 6 percent interest.

Most employees will get their full refund one day before the deadline. The state is paying $31.9 million to 13,891 employees Friday. That breaks down to about $1,000 per person, but each refund amount will vary, said Mike Sponhour, spokesman for the State Budget and Control Board.

A second, smaller group of refund checks will be mailed by Sept. 1. As per the court's ruling, interest will accrue at 11.25 percent starting July 1. The state does not yet know the amount of checks to be mailed out then, Sponhour said.

"The state of South Carolina made a promise to them and went back on that promise," said attorney Cam Lewis, who, along with Dick Harpootlian, represented retirees in the class action lawsuit.

"Why you have three branches of government is shown in what happened here," Lewis said about government checks and balances. "The judicial branch tells the legislative branch and executive branch you can't go back on your word. ... You've wronged the citizens, and you've got to make it right."

Lewis said one of his clients called Thursday to say he's getting more than $6,000 back.

Under the TERI program, retirees can work up to five years after they retire and continue to accumulate pension benefits. Their money is held in a no-interest account to be paid out in a lump sum at the end of the program or rolled into a qualifying retirement fund.

The Supreme Court's May 4 ruling said the state broke a contract with the TERI workers when it deducted pension contributions from their paychecks.

The circuit judge has yet to decide how much the plaintiffs' lawyers will receive.