Working retirees await pension ruling

Court to decide if workers must pay into state fund

By JOHN O’CONNOR - joconnor@thestate.com

Tommy Johnston has waited almost two years to learn the fate of his retirement.

Johnston, principal at Gold Hill Middle School in York County, is one of approximately 15,000 employees in the state retirement system who have retired and come back to work. Those working retirees still are waiting for a court to decide whether they must keep paying 6.5 percent of their salary into the retirement system.

As in a related case involving the Teacher and Employee Retention Incentive program, or TERI, Johnston believes the Legislature broke a contract when they forced already-retired workers to begin paying into the system.

The wait is costing Johnston hundreds of dollars monthly — money he does not expect to recoup.

“We honor and respect the retirement system because we’re vested in it,” Johnston said, “but I do feel betrayed.”

Struggling with ways to keep the retirement system on good financial footing, lawmakers opted in 2005 to require those already retired or in TERI to begin paying into the system.

In May 2006, the S.C. Supreme Court unanimously ruled that lawmakers violated the law when they forced workers already in the TERI program to begin contributing to the retirement system. Those who retired and came back to work after July 1, 2005, when the law took effect, do have to pay a portion of their paycheck to the state retirement system.

But the court chose not to rule on Johnston and other working retirees who did not join TERI, instead sending the case back to a lower court. Attorneys and state officials said a court could decide the case by year’s end.

Dick Harpootlian, one of a team of attorneys who argued the TERI case before the S.C. Supreme Court, said a judge could issue two key rulings later this year.

An Orangeburg County judge must decide if the Legislature violated a contract, as in the TERI case, by forcing working retirees to pay into the system again after retiring. The court also must decide if the retirees can band together in a class-action case, or argue their cases individually.

The case involves two classes of workers, retired police officers who came back to work and the other working retirees, many of them school employees.

“It’s very, very labor intensive, and it’s going to take some time,” Harpootlian said of the research involved. “We’re slogging through it.”

Efforts to reach Bobby Stepp, the state’s attorney in the case, were unsuccessful. A spokesman for the S.C. Retirement System declined to comment, other than to say the case was slowly moving forward.

Johnston said he and other retirees will “continue to march” to move to bring the case to a decision.

“It’s been somewhat frustrating because we paid our dues,” Johnston said. “We’re making a valuable difference ... and we’ve been left out to dry.”

Reach O’Connor at (803) 771-8358.