COLUMBIA - The state Supreme Court spent more than an hour Thursday hearing arguments about a new state law that requires payroll retirement contributions from state retirees who return to work under a special incentive program.

The Legislature had ordered those deductions to begin as it tried to put the state's pension plan on firmer financial footing. The $50 million in deductions from Teacher and Employee Retirement Incentive participants and other retirees back on state payrolls would be linked with higher employer contributions and other changes. The goal is to generate money for retiree cost-of-living increases and address financial concerns overhanging the pension system.

The contributions were supposed to begin in July, but four retirees affected by the new deductions sued to keep the 6.5 percent deductions from coming out of their checks. The Supreme Court took the case immediately and made it a class-action covering all retirees back on state payrolls and ordered the state to set aside the contributions. It affects the 13,400 TERI employees and most of the other 8,600 retirees who have returned to state jobs.

The justices appeared particularly interested in whether state law creates contracts or other guarantees with the retirees.

Under TERI, state employees can retire after 28 years and return for up to five years without contributing to the retirement system. The pension benefits of TERI participants are set aside until they finally retire.

Dropping the 6.5 percent payroll deduction for the retirement system attracted people to TERI, the retirees' lead lawyer said.

The program also amounted to a contract with those workers, Cam Lewis said.

"The state says if you retire, if you agree to put your money in the box and get no interest, we will let you work up to five years. ... And you don't have to pay anything into the retirement system because your benefits are frozen at that time," Lewis said.

Justice James E. Moore asked Lewis whether the Legislature could change that. Lewis agreed it could, but only for people who had not decided to retire and enter the incentive program. For current TERI participants, "it is a right that the state can't take away," Lewis said.

The state, Lewis said, thinks that it is OK to take "a thousand dollars out of your pocket" and promise to pay that back during the next 30 years. "I just don't think our Constitution allows the government just to reach in your pocket and take a thousand dollars" and say it will be given back later.

It could be weeks before the court's decision, which could include overturning parts of the law.