COLUMBIA--While the governor wants a major overhaul of the state's retirement systems, some lawmakers trying to fix the $25 billion pension program advocate smaller changes that would ensure the plan's financial health and pay cost-of-living increases to retirees.

In last week's state of the state address, Gov. Mark Sanford blamed the Legislature's appetite for adding benefits to the system for turning it into "a ticking time bomb for state retirees."

Sanford wants to close the system to new employees and create a retirement plan like a 401(k).

A panel of lawmakers in charge of looking at retirement issues isn't prepared to go that far but agrees that changes are needed.

"We are going to have to make an adjustment in the retirement system this year," Senate Finance Committee Chairman Hugh Leatherman, R-Florence, said.

The immediate problem is a planned 3.4 percent cost-of-living increase in retiree checks. If the increase is implemented, the plan will exceed a payoff limit of 30 years that is mandated by state law. But the plan is required to pay a cost-of-living adjustment if that limit isn't exceeded.

On "one side, benefits improved; on the other side, the stock investments dropped," said House Ways and Means Committee Chairman Bobby Harrell, a Charleston Republican who is on the board that oversees the retirement plan. "Had the stock investments not dropped, then you'd have more money in the system and we wouldn't be talking about the problems of an unfunded liability."

That liability is determined by how long the state would have to fund the program to pay off benefits promised to retirees. The liability has grown over the years as lawmakers have added benefits such as reducing the years required for full retirement eligibility to 28 from 30 and the Teacher and Employee Retention Incentive program, which encourages people to retire while letting them stay on the job.

Before those two benefits were added in 2000, the gap between benefits promised and investments to pay for them was at two years. The additional programs added $1.8 billion to the system's liabilities -- extending the payoff gap to 13 years.

Last week, a committee Leatherman set up to address the retirement system's problems heard options for the state to be able to pay the cost-of-living increase and reduce the growing liability gap.