Gov. Mark Sanford has described the state retirement system as "a ticking time bomb for state retirees," and apparently key legislators are finally acknowledging the hazard. It will require strong legislative action this year to avoid a growing liability and a cut in anticipated cost-of-living increases for retirees.

The response of legislative leaders to the governor's plan to privatize the system says it is unlikely to advance this year. But there are ways to improve the system that is now in place, and serves some 412,000 retirees, state employees and former employees who have yet to begin drawing benefits.

The Legislature should first examine if both the 28-year retirement benefit and the Teacher and Employee Retirement Incentive can be revoked more quickly than the governor believes possible.

While Gov. Sanford's privatization plan would be a bold departure for the system, his suggestion that all existing state employees should retain eligibility for a 28-year retirement and for participation in the TERI program seems uncharacteristically timid. Legislators should seek a legal opinion from the attorney general to determine if each benefit can be reduced more substantially by legislative action.

Both have greatly added to the financial liability of the retirement system. Both were created by the Legislature, and their ill effects should be mitigated to the extent possible. Together they have added liabilities estimated at $1.8 billion to the retirement system.

The TERI program allows state employees to continue working for another five years after they retire, and while they receive retirement benefits. The program was designed to give agency administrators the option to keep particularly valuable employees past retirement, but was expanded by a court to create an entitlement program for all state employees.

The Legislature should have no qualms about terminating a program that has been transformed far beyond its original intent by judicial fiat. The governor's commission on downsizing government recommended in 2003 that the program be ended to all but those retirees already participating.

Nor should the Legislature linger over the question of whether to return to the 30-year service requirement for full retirement benefits. The decision to reduce the eligibility requirement may have been politically popular with state employees, but the financial liability it has created now threatens retiree benefits.

The state isn't expected to be able to grant cost-of-living allowances to state employees this year because of the extent of liabilities, estimated at more than $4 billion. Comptroller General Richard Eckstrom says the system's financial problems threaten the state's AAA credit rating. The credit rating guarantees the most favorable interest rates on borrowings, and if downgraded, could cost the state millions.

Mr. Eckstrom has long urged reform of the retirement system, which he says eventually may require the state to look at deferring benefits now immediately available after 28 years of state service. That could mean that retirees would receive benefits when they actually reach what is generally considered retirement age.

That solution probably won't be among those discussed by legislators this session, but the system still requires a substantial adjustment, including a fix for its disjointed investment mechanism. Maybe a privatization plan eventually will emerge as the best long-term solution. In the interim, the Legislature should get a better idea of how it can apply solutions to the 28-year retirement benefit and the TERI program, and then proceed with the appropriate cure.