Treasurer Curtis Loftis Quoted on South Carolina Pension Troubles
June 23, 2016
COLUMBIA — Starting in July, teachers, local and state government employees will see part of their new pay raise go toward shoring up the underfunded state pension fund.
A long-awaited 0.5 percent retirement plan contribution increase was approved by the State Fiscal Accountability Authority on Wednesday after Gov. Nikki Haley, Treasurer Curtis Loftis Jr. and other members said the move is a first step to fix the retirement fund’s estimated $23 billion shortfall.
“I think we passed the tipping point — I believe the system has to be altered,” Loftis said. “To fix the plan now is going to be an outrageously expensive proposition.”
Haley was more optimistic and added there needs to be a “new guard” way of thinking, which later prompted senior lawmaker and Senate Finance Chairman Hugh Leatherman, R-Florence, to leave the meeting before the vote.
“What sets South Carolina back is when you have any legislators that think they know all and they aren’t willing to work with anybody,” Haley said after Leatherman left. “Walking out of a meeting just for the sake of walking out of a meeting is unproductive and unprofessional.”
Haley said she canceled the original meeting earlier this month because Leatherman was not in attendance to represent the Senate.
Contribution increases will offset the pension fund’s 1.6 percent rate of return last fiscal year — far short of the 7.5 percent expected rate. The problem is compounded by increased benefit costs and fewer state employees paying into the fund, among other drags. Officials estimated the investments will again be down, this time by some $2 billion when the current fiscal year ends June 30.
The contribution increase chews into the 3.25 percent pay increase legislators and Haley approved in the $7.5 billion state budget. In addition to state employees, police officers, on a separate plan, will also face a 0.5 percent increase. The state matches those increases with tax dollars, as well.
Earlier in the meeting, SFAA gave the state Department of Administration approval to market three state office buildings in Columbia for outside use.
The list includes the S.C. Department of Education’s Rutledge Building, an adjacent property, and the S.C. Department of Probation, Parole and Pardon Services office on Devine Street. The properties were deemed surplus and cost-prohibitive to maintain. Shedding the buildings is part of a push to consolidate and cut costs associated with state-owned property.
This article, witten by Gavin Jackson, can be found here