TO UNDERSTAND why the plan to let retired teachers and police officers simultaneously collect a full salary and full pension is such a bad idea, you first have to understand why the Legislature created the current limits on that practice.
And to understand that, you have to understand the crazy thing the Legislature did at the turn of the century.
And to understand why that was crazy, you have to understand that the modern problem with traditional pension systems — and with Social Security — is that people are living much longer today than they were when the systems were created. They are living so much longer that we are in many cases paying people to not work for longer than we paid them to work.
South Carolina’s pension system might have been OK for several more decades, even without adjusting for the increasing life expectancies. But in 2000, when the S.C. Retirement System for state employees was flush with cash, instead of making those changes, the Legislature decided to wreck the system.
Lawmakers agreed to let state employees take early retirement after just 28 years, instead of 30. They also created the Teacher and Employee Retention Incentive, or TERI, program, which allowed employees to retire, bank their retirement pay and keep working, at full salary, for five more years.
The results were, predictably, disastrous. The unfunded liability of our pension system immediately shot up from two years to 27 — dangerously close to the drop-dead, your-system-is-broken limit of 30 years. And it just kept rising from there.
FROM 2012: How to fix the State Retirement Systems
Flash forward a decade, to 2012: The pension system is spiraling out of control, and the Legislature has to make tough choices to save it. Most of the changes apply only to new hires, who will have to work longer before they take early retirement. But lawmakers also agreed to phase out TERI and to make the traditional practice of receiving a state paycheck while also receiving a pension — or double-dipping — less attractive. (More on the difference in a moment.)
The Legislature fixed TERI by ending it effective June 30, 2018; even people who just enrolled receive their final double-dip effective June 30. Lawmakers cracked down on traditional double dipping by cutting off pension benefits in any year that a retiree who returns to work for the state makes more than $10,000.
The 2012 reforms were only Part One of the pension fix. More tough choices had to be made last year, and more lie ahead.
But now senators are trying to undo some of the fixes.
That’s not how they put it, of course. They say they are trying to deal with critical workforce shortages: We need more teachers, so Sens. Mike Fanning, Kevin Johnson and Nikki Setzler introduced S.828, which would waive the $10,000 salary cap for retired teachers and other school employees who possess “unique qualifications required by the hiring school district.”
By the time a subcommittee approved the bill on Wednesday, it also allowed teachers who joined TERI between 2013 and 2017 to come back to work and keep collecting their pensions, without the salary cap, after the TERI program ends in June. And the subcommittee waived the salary cap for retired police officers who come back to work as school resource officers or instructors at the Criminal Justice Academy.
After arguing correctly that removing the anti-double-dipping provisions for 1,500 teachers would damage the retirement system, Sen. Sean Bennett said he’d like to find a way to expand the law-enforcement exemption even more. But he wanted to make it absolutely clear that this was a one-time thing, that the Legislature wouldn’t be coming back every year or two and adding other categories of retirees.
But of course if the Legislature were to pass this bill, it would be sending precisely the opposite message: Just make a case that you’re working in a critical, hard-to-fill position, and we’ll make another exception.
It’s not like the people who would benefit from S.828 got caught by surprise. The TERI-ed teachers signed up since 2013, knowing full well that the program was being phased out; the police officers probably retired in the past year or two. If they thought they wanted to keep working, they shouldn’t have retired.
If we’re having trouble keeping important jobs filled, the Legislature needs to suck it up and improve the salary or benefits for those particular positions — not rely on an inherently unfair and unwise program that further destabilizes the pension system.
The problem with double-dipping isn’t just cost. Whether to participate in TERI was entirely up to the employee, with no input from the employer. That meant, essentially, that employees were deciding to give themselves a substantial raise. Traditional double-dipping is less offensive, because it requires employees to retire and take the chance that they might not get rehired. But it still means getting paid twice to do one job.
And what message does that send to state employees who could have double-dipped, but instead decided to keep working until they actually wanted to retire — that is, to be treated like most of the rest of us are? It says they’re suckers.
Ultimately, we need to get to a system where you don’t feel like a sucker if you keep working until you’re actually ready to retire, because you can’t draw a pension until you’re old enough to actually retire — an age that ought to be increasing every year, as lifespans continue to increase. Until then, we at least need to stick to our guns on double-dipping.
Ms. Scoppe writes editorials and columns for The State. Reach her at email@example.com or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.