If state lawmakers want to retire, they would have to give up their seat in the Legislature, according to a proposal moving through the state House of Representatives.
The proposal would end the practice of lawmakers retiring but remaining in office and replacing their $10,400 annual salaries with much larger pension benefits − more than $30,000 a year, in some cases.
State lawmakers are members of a separate − and much smaller − retirement system than state workers. Because of that, any changes to the General Assembly Retirement System would have little affect on the much larger state pension system’s debt of $13 billion.
Video from around the world
But lawmakers hope the change would send a message of shared sacrifice to the nearly 500,000 workers, retirees and other beneficiaries on the S.C. Retirement System. Come January, state workers in that system will be asked to pay more into the retirement accounts only to potentially receive lower benefits once they retire.
“You lead by example,” said House Majority Leader Kenny Bingham, R-Lexington, a member of the House Ways and Means subcommittee that came up with the proposal affecting legislators and state workers.
State law says lawmakers − whether still serving in the Legislature or not − can start drawing retirement benefits once they turn 70 or have 30 years of service. They can also combine years of service from multiple retirement systems − as can state employees.
The proposal would not affect the 28 lawmakers − 19 in the Senate and nine in the House − who already have retired and are receiving a pension check in addition to $12,000 a year that they get to cover expenses. But it would prevent future lawmakers from retiring and continuing to serve in office while collecting higher pension benefits.
State lawmakers still would benefit from a more generous pension formula.
State workers calculate their annual pension benefits by multiplying their years of service times their average final salary times 0.0182. State lawmakers multiply their salary and years of service times 0.0482, giving them a higher benefit.
Meanwhile, the proposal to change the retirement system for state employees calls for them to pay 1 percent more into the system − an increase of $408 a year for the average employee − while changing their pension formula, which could result in a lower benefit for some workers.
The S.C. State Employees Association has agreed to endorse having state workers pay more into the retirement system, but only if lawmakers give state employees at least a 2 percent raise. Carlton Washington, the association’s executive director, called the current proposal, which lacks that guaranteed raise, “shortsighted.” But he said the offer from lawmakers to change their own retirement system could be a good sign to state employees.
“If that is put on the table first, then that would send somewhat of a positive message to employees that (lawmakers) are at least interested in a comprehensive review,” Washington said.
State Rep. Jim Merrill, R-Berkeley, chairman of a House Ways and Means subcommittee, called the changes to lawmakers’ retirement system “significant.” He noted state lawmakers are not vested in their retirement system until they have at least eight years of service, while state employees are vested after five years. State representatives have to run for re-election every two years.
The proposal to change the pension systems for state workers and legislators, approved last week by a House Ways and Means subcommittee, has not been released publicly in written form. Merrill and Bingham stressed the proposal has not been formally introduced yet and, undoubtedly, will be changed before lawmakers vote on it.
“I don’t think anybody thinks that that bill, as it is proposed, is not going to be (changed),” Merrill said.
E-Mail
Print
Get The State newspaper delivered to your home. 
