SC pension overhaul makes progress as bill moves forward
Not everyone in the embattled state pension system is a government worker.
Almost 300 employees and retirees of associations, which lobby the Legislature on behalf of local governments or their workers, also are eligible for a state pension.
The inclusion of the nongovernment employees in the state retirement system is raising questions as legislators weigh how to bail out the underfunded system.
Association leaders say their groups and employees are not the cause of the pension system’s woes, contending they pay their own way.
But legislators point to the pension system’s unfunded obligations to retirees — roughly $20 billion — and say that is not true.
The 285 nongovernment employees who are in the pension system work for or retired from 11 associations that represent cities, counties, school boards, coaches and emergency personnel.
The nongovernment members make up a tiny fraction of the 322,020 workers and retirees who are members of the state’s ailing pension system, which benefits state, city and county workers as well as teachers.
This year, lawmakers are set to increase the amount those state workers and their public-sector employers pay into the pension system. The nongovernment workers and their association employers also would have to pay more.
Lawmakers also might put money from the state’s general fund — made up primarily of state income and sales taxes — into the pension system to shore it up.
After they have started stabilizing the pension system, lawmakers say they will turn their focus to other issues concerning the retirement program, including who is in it.
One option will be cutting off new employees of associations from joining the pension system
“We have, over the years, allowed a number of people to become a part of the retirement system who are not state employees,” said state Rep. Gilda Cobb-Hunter, D-Orangeburg, adding, “That is a part of the cost.”
Association employees have been members of the state pension system since its beginning.
The S.C. State Employees Association urged lawmakers to create the S.C. Retirement System, started in 1946, said current director Carlton Washington.
At the time, association employees were included in the pension system “simply because they wanted the folks working for (government) employees and retirees to have a vested interest,” said Washington, the association’s sole full-time employee.
Six retirees from the State Employees Association, which advocates for pay raises for state workers each year at the Legislature, also are part of the retirement system.
Washington adds association employees and retirees aren’t the only nongovernment workers covered by the pension system. Legislators, who have their own, separate, retirement system for lawmakers elected before 2012, aren’t government workers either, he says.
“If the conversation is about people in the system who are not actually state employees, then we need to start with our leaders,” Washington said.
The S.C. School Boards Association has 39 full-time employees contributing to the pension system and 14 retirees.
The school boards group and its employees —not taxpayers — pay for their contributions to the pension system, said Debbie Elmore of the association. As a result, she added, there is no cost to the state for associations to participate.
“We’re paying our way,” Elmore said.
Who should be in the system?
But state Sen. Sean Bennett, R-Dorchester, says that is not true.
The dollars paid into the retirement system by all workers and their employers — whether the state, a city, a school district or an association — haven’t been enough to prevent it from running up a huge unfunded liability, Bennett said.
The associations’ share of that $20 billion liability would be almost $20 million.
“That’s the problem,” Bennett said.
Lawmakers on a special panel examining the pension system plan to address who should be eligible for state retirement benefits.
“Looking at the eligibility or class of employee or employer that is eligible for the plan ... needs to be evaluated,” said Bennett, a member of the pension panel.
Cobb-Hunter agreed, adding she is not looking to kick association workers out of the pension system but to close the benefits to new employees of the associations.
Association workers in the SC pension system
Almost 300 current and retired employees at S.C. associations, which lobby the Legislature on behalf of public workers, get state pension benefits.
Number of actively working members
Number of retired members
Municipal Association of S.C.
Palmetto State Teachers Association
S.C. Association of Counties
S.C. Association of School Administrators
S.C. Association of School Boards
S.C. Athletic Coaches Association
S.C. Education Association
S.C. Law Enforcement Officers Association
S.C. State Employees Association
S.C. State Firemen’s Association
S.C. Sheriffs’ Association
SOURCE: Public Employee Benefit Authority