Gov. Mark Sanford wants to shore up the long-term financial stability of the retirement system by restoring the 30-year service requirement for retirement and eliminating a controversial post-retirement program that allows retirees to keep working. While the governor would apply each fix to new employees only, the Legislature should consider putting the proposal on a faster track. In addition, the Legislature should re-examine the method by which state pension funds are invested to ensure that the retirement system is getting the best return.

Financier Darla Moore reiterated her concerns about the problems with the system, which she described as a "train wreck getting ready to happen," during a meeting at The Post and Courier this week. She noted, for example, that separate entities are responsible for bond and equity investments, making the overall program unresponsive to events that affect investment returns.

Ms. Moore is among those who believe changes are needed in the state law governing investment procedure and oversight along with revisions in the S.C. Constitution that would allow more investment latitude. She is founder of the Palmetto Institute, a nonprofit think tank that seeks to improve the state's business, political and educational climate.

State Comptroller General Richard Eckstrom has repeatedly warned that the retirement system faces a massive unfunded liability that threatens its long-term health, and possibly the state's AAA credit rating. With continued cost-of-living allowances routinely granted by the state Budget and Control Board, Mr. Eckstrom puts that figure at some $9 billion.

The unfunded liability can be partly blamed on the legislative decision to reduce the number of years required for retirement from 30 to 28 in 2001. And the problem was compounded by the Teacher and Employee Retirement Incentive program, created in 2000 to keep teachers and other valuable employees on the job after retirement.

Unfortunately, a court ruled that TERI is available to all retiring employees, not just those that their supervisors wanted to retain.

The Legislature should consider eliminating the TERI program at the earliest possible date since the court ruling radically altered the original focus and created a substantial new class of state employees while adding to the retirement system's liability.

Gov. Sanford's proposal would assist the long-term health of the system by restoring the 30-year retirement standard for new employees, and by making the TERI program off limits to new employees. Unfortunately, that would still leave thousands of state employees eligible for 28-year retirement and a costly job extension program.

"This may have been great politics," Sanford said of the 28-year retirement standard, in comments quoted by The Associated Press. "It's horrible policy and I think it really is a ticking time bomb."

Eliminating the earlier retirement date and the TERI program, along with needed structural changes in the way the funds are managed, are critical to eliminating the "ticking time bomb" that would affect an estimated 98,000 state employees and a total of more than 300,000 South Carolinians.