GREER -- Greer has finally caught up on what it owes to the state retirement system after nine months of late notices and falling $400,000 behind in payments.

Greer's checks of last week and Monday that totaled $400,000 brought the city up to date, according to Michael Sponhour, state Budget and Control Board spokesman. The city paid $10,278 in interest at eight percent, he said.

Greer City Controller David Seifert said the problem with the payments started around nine months ago.

"Our HR (human resources department) and the people we deal with at the retirement system discovered an error in our reports that are generated by the computer system," Seifert said.

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He said the state asked the city to hold payments until the error could be tracked down, which it recently was, and as soon as Seifert received a request for payment, the checks were sent.

"Current employees and those who have retired from work with the city should rest easy because this situation in no way impacts their pensions," Sponhour said. "Those benefits will be paid in full."

Seifert said, "There's no fiscal danger with the city. These monies have all been accounted for. They've been withheld."

Acoording to Sponhour, the "overwhelming majority" of 800 public employers who collect employee and employer contributions for payment into the state retirement fund pay on time, but 24 are in arrears.

Sujit CanagaRetna, senior fiscal analyst, Council of State Governments' Atlanta office, who has researched Southern state retirement systems extensively, said that if local governments are in arrears regularly, "That's going to pose some major problems."

He said, "In general, state and local governments have been fighting this issue related to pension systems for the last three or four years, and it's only going to get more challenging in the coming years with this huge wave of baby boomers that are going to start retiring."

Greer had been in arrears for November and December 2005, and February to April 2006, according to a letter the board sent to the city last week.

Sponhour said, "They did not make payments for many months, and we repeatedly contacted the city administration before we were finally able to get this situation resolved."

Seifert said the city had been working with an employee at the state board to try to track down the error. He didn't know why it took nine months.

"We were giving them information as they requested it," he said.

He said an employee switched from the regular state retirement system to the police retirement system, and a computer program mistakenly placed the employee in both.

Greer employs between 170 and 200 people, he said.

As of July 1, employees pay 6.5 percent of their gross salary into the system, and employers contribute 8.05 percent, Sponhour said.

CanagaRetna said Greer being in arrears about five months seemed "unusual."

He said "eight percent (interest) doesn't jump out at me as an outrageous amount." He said South Carolina invests its pension money in a variety of instruments, which includes the stock market, which in the long run, returns about 10 percent.

Annual contributions to the state retirement fund total $1.1 billion, according to the State Budget and Control Board's Web site.

Nan Lundeen can be reached at 298-4316.