Scoppe: The SC legislative pension system is dead. Maybe.

Associate EditorOctober 4, 2012 

SO NOW we have two retirement plans for legislators: a breathtakingly generous one for everyone who is currently serving or ever has served in the Legislature, and a different one that everyone who doesn’t work for the government would be delighted to have, but that doesn’t compare to the first one, for everyone who becomes a legislator in the future.

Of course, shutting off the General Assembly Retirement System to all future legislators was the easiest thing current legislators could have done to quell public disgust with their cushy pension package, because it doesn’t reduce by a penny the pension of anyone who voted for the change.

It’s true that our part-time lawmakers could not have closed their pension system without being sued, and losing, and having to make up financially for the time the system was closed and pay more attorney fees to Dick Harpootlian and reopen the system. But they could have significantly reduced their super-sized benefits, which allow them to draw pensions that are larger than those received by the typical full-time state employee.

They did consider eliminating the provision that lets them stop receiving their salaries and instead collect much larger pensions while they continue to serve: as much as $33,000 instead of a salary of $10,400. But while the House voted to stop any more legislators from choosing this option, the Senate refused to go along with that. Of course, that’s the least egregious problem with the legislative pension system.

They did not consider bringing their taxpayer subsidy into line with the subsidy for regular state employees, whose pensions are subsidized at less than half the rate that legislators’ are. They did increase their own contributions, which has the effect of reducing the portion taxpayers have to fund. But they were pretty much forced to do that after they increased the regular state employees’ share of their contributions by even more.

Last year, for every dollar legislators put into their system, taxpayers contributed $3.89; for every dollar most state employees contributed, we contributed just $1.47. Even with the increase for legislators, we still will be contributing $3.52 for every dollar they put in. The taxpayer subsidy for regular employees will drop by more than that.

They did not consider changing the law that requires all current legislators to be part of the legislative pension system, thus allowing themselves to keep telling constituents, “Gee, I oppose this, but the law forces me to benefit from it.”

Nor did they consider repealing the law that allows former legislators to keep buying pension credit after they leave office — even after we kick them out of office — at the same super-subsidized rate as legislators who are still serving us. This is the most egregious part of the pension system — I’m not even convinced that federal law allows it — and yet it remains firmly in place. Not because changing it would put the pension reform package in legal jeopardy — the law took away a similar, though far less generous, perk for former state employees — but simply because legislators didn’t want to give this up.

Legislators even discretely exempted themselves from one of the significant reforms of the law: the $10,000 cap on pensions that retirees can earn if they return to work in government. That provision, one of several designed to ease us away from paying people longer to not work than we pay them to work, doesn’t apply to anyone who retires before January, who works until at least age 62, who is appointed by the governor or the Legislature or who is elected to office. That last carve-out goes way beyond the Legislature, but it does include the Legislature.

Yet despite the fact that closing the system to new legislators didn’t hurt a single one of them, and that it would have been easy to do this last year, or the year before that, or 10 years ago, or any of the other times that I and you harangued them about this obscene perk, the fact is that they did not do that earlier. Didn’t even consider doing it. Only once in all these years did anyone in the Legislature even propose doing that — and that proposal was defeated on an unrecorded voice vote.

Which is to say that it was never a given that our lawmakers would do even this much.

Despite all the things they didn’t do and should have done, what they did do is in fact a huge, huge deal. Of all the things legislators could have done to address their pension system, it was the most important. Because eventually — once all current and former legislators die — there will no longer be a legislative pension system.

That is, barring some change.

And this is where it gets tricky.

The existential problem with creating a bifurcated system for similarly situated people — a separate-but-unequal system, if you will — is that at some point, the people on the short end of the deal start asking why they should be on the short end of the deal.

At some point — probably not next year, and maybe not for several years — one of two things will happen: Either legislators who were first elected after 2011 will decide that it makes no sense to give senior legislators and former legislators all those ridiculous benefits that they themselves can never hope to receive, and they’ll rein in those outsized benefits. Or else they’ll decide there’s no reason they shouldn’t have those same benefits.

If they decide the former, they’ll make the change to great fanfare. And rightly so. Depending on how soon they do it, that will be a huge step forward. (It becomes less significant each year, as more recipients of the GARS largesse die off.)

If the latter, they’ll be very quiet about it. In fact, the resurrection of the General Assembly Retirement System probably will be tucked deep inside a very complicated pension bill. That is, after all, how legislators have always tried to increase their benefits. Very quietly. So quietly, in fact, that sometimes even their colleagues didn’t realize what they were trying to do. Until they were discovered. And their colleagues were shamed into voting no.

Don’t delude yourself into believing we can stop watching the legislative pension system. Its resurrection will be a very real possibility until the Legislature scales back the super-subsidy and eliminates the defeated-legislator perk — or until the last legislator in office today dies.

Ms. Scoppe can be reached at cscoppe@thestate.com.

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