Curtis Loftis Fights Pension ‘Reform’ Bill
March 26, 2015
By Hal Milard
From: Lexington County Chronicle
A seemingly innocuous piece of legislation is allegedly threatening South Carolina's $30 billion retirement fund.
State Treasurer Curtis Loftis said Senate bill S.527, sponsored by Columbia Democrat Joel Lourie and Anderson Republican Kevin Bryant, will allow “the fox to guard the henhouse.”
Since his election as treasurer, Loftis has railed against the alleged mismanagement of the state's troubled retirement system and has made fixing it the priority of his office, routinely butting heads in the process.
The bill is currently in committee. On March 12, Loftis sent a blistering letter to members prophesying calamity should the reforms to the state's endangered retirement system go into effect.
Troublesome provisions pertaining to procurement and budgeting have been axed since Loftis sent his letter. But more troubling aspects, such as lack of transparency, remain, according to Loftis.
A portion of the bill would wrest custodial authority from the treasurer's office and place it in the hands of “unelected bureaucrats that will be unaccountable to the public, yet will have total control over the $30 billion pension fund, which currently has more than 400,000 participants,” Loftis said.
That authority held by the treasurer's office would move to the Public Employee Benefit Authority and the Retirement System Investment Commission.
“The same people that invest the funds, monitor the investments, report on the investments, and make bonuses and high salaries deriving from the investments will be the sole source for virtually all of the information available to the public,” said Loftis.
The result of the legislation will lead to higher taxes, higher employer and employee contributions, higher debt, less transparency and a genuine threat to the state's triple AAA credit rating, which would have disastrous effects on future borrowing ability, Loftis warned.
“This bill will make it easier to hide poor performance, disguise the true financial condition of the system, which at present has a debt of over $18 billion,” Loftis said.
While Loftis rants against the bill, Bryant said he has asked Loftis' office to provide information to back up his allegations.
Bryant said the reforms merely stem from suggestions in an audit by Michigan-based Funston Advisory Services, which specializes in analyzing public retirement systems