S.C. lawmakers say they are ready to take on the remaining pension woes of state workers.
More action on the pension issue has taken a backseat this year to the Legislature’s attention to the state’s continuing nuclear fiasco, they acknowledge.
However, state pensions are set to move to center stage again next week.
A joint House-Senate committee will hear Wednesday from the heads of the Public Employment Benefit Authority and the S.C. Retirement System Investment Commission. It is one of several meetings lawmakers have held since shoring up the state’s underfunded pension system last year.
“Every one wants to work this out and finish this,” said state Rep. Bill Herbkersman, the Beaufort Republican who co-chairs the panel. “We don’t have time to kick it down the road anymore.”
State Sen. Vincent Sheheen, the Camden Democrat who co-chairs the committee, said he wants to know what the results of last year’s pension changes have been.
Those changes, which took effect July 1, require state workers and their employers – from state agencies to county and city governments to schools – to pay more into the state retirement system.
That reform also increased and capped most public employees’ contributions to the retirement system at 9 percent of their pay. Law enforcement officers pay 9.75 percent.
A public employer eventually will pay $18.75 to the retirement system for every $100 an employee earns. Police agencies will contribute $21.24 for every $100 an officer makes.
Lawmakers hope those changes are a start in helping the state pay for the roughly $20 billion in unfunded benefits that it has promised to state workers and retirees.
As of November, there were roughly 188,000 active employees – working at state agencies, colleges, schools or local governments – enrolled in the Public Employee Benefit Authority. Another roughly 84,000 retirees were in that system.
Lawmakers are set to consider what future retirement plans will look like for public-sector workers. That could involve exchanging the state’s existing pension plan for a 401(k)-like system for new employees or something else.
Rep. Herbkersman said there have been some “off-the-grid” talks among lawmakers about potential changes. He would like to have a proposal pass the House by the end of session.
But lawmakers have not struck a deal.
In a conference call Tuesday, state Sen. Sean Bennett, R-Dorchester, said there has yet to be a “joint kumbaya moment.”
Instead, Phase 2 of pension reform has fallen victim to the V.C. Summer nuclear debacle, he said.
“We recognize that there needs to be some changes to the plan itself,” Bennett said Friday, adding he plans to make a proposal as early as next week. “There was a lot of agreement on the first part (of pension reform), and there’s less agreement on the second part.”
Sen. Sheheen agreed the state’s nuclear debacle has consumed much of the energy and time at the State House.
“But when you are talking about a multi-billion-dollar (pension) system, you don’t want to move too quickly without knowing the facts and potential outcomes,” he said.
Look no further than the V.C. Summer fiasco for an example of the perils of rushing, he added.
“That was a multi-billion-dollar decision that got rushed through without good planning and thought,” he said. “I want to make sure we don’t rush through this.”