Proposal: State workers can’t collect pension until 62

State employees would pay more into the S.C. retirement system but get less when they retired, according to a plan approved Monday by a House subcommittee.

The changes would affect all state employees, teachers, local government workers, police officers and firefighters who have been on the job for less than 23 years. Anyone who has worked for more than 23 years would not be affected by the proposed changes.

The plan, approved by a committee of seven House lawmakers, is far from final.

Its next stop is the full House Ways and Means Committee in January, the first of many steps in a long legislative process. But the plan sets the tone for the debate and draws the battle lines for state workers.

Two changes directly affect paychecks for active employees:

• State employees would have to pay 7.5 percent of their salaries into the state retirement system instead of the 6.5 percent that employees pay now — an average increase of $408 a year.

• Once retired, an employee’s pension check would be based on five consecutive year’s worth of that worker’s highest salary instead of three years, likely to result in a lower benefit.

While lawmakers unanimously endorsed the plan, there already are signs of discord. State Rep. Gilda Cobb-Hunter, D-Orangeburg, said she would push hard for a pay hike for state workers to offset the increased mandatory contributions.

“Sacrifice can’t be a one-way street,” she said. “This can’t be done on the backs of state employees without something to show some kind of appreciation for the work that they do.”

State Rep. Jim Merrill, R-Berkeley, chairman of the committee, called the mandatory increases “one of the most difficult actions that this committee is recommending — one everyone is going to take heat for.” But he said the changes are necessary to keep the system, which has a $13 billion deficit, solvent.

Another big change was just one word: And.

Under the plan, state workers could not earn full retirement benefits until they had worked for 30 years and reached age 62. Now, employees can retire at any age once they have worked for 28 years. The change would not apply police officers and firefighters. They are on a separate system, and can retire after 25 years of service.

So if an employee starts working for the state at age 22 and retires 30 years later at age 52, it would be 10 years before he or she could get a full pension check.

“That means (teachers) would have been in the classroom setting for 40 years before they could retire with full benefits,” said Patti Fowler, a former teacher who now works in the attorney general’s office. “That’s a long time.”

Retired workers did not escape unscathed.

The plan would eliminate the automatic annual 1 percent cost-of-living increases for state retirees. Instead, lawmakers would have to vote each year on whether retirees would get an increase.

“A lot of times, (the increase) isn’t based on sound (accounting) information, but it’s based on who can lobby the hardest,” said Sam Griswold, spokesman for the State Retirees Association of South Carolina. “We thought we were done with that.

“Unfortunately, that decision takes us back there.”