State retirees could see smaller raises
Fri, 23 Sep 2011 12:51:21 GMT —
COLUMBIA, S.C. (WACH, AP) -- Some South Carolina lawmakers are warning that retired state employees might get smaller cost-of-living increases in the years ahead.
The State newspaper reported an actuarial firm has recommended that South Carolina reduce the amount of money it expects its retirement fund to earn.
State law would require the South Carolina Retirement System to reduce cost-of-living increases from 2 percent to 1 percent if the revenue forecast is reduced.Read more SC leader calls retirement system a ticking time bomb SC commission rejects pension monitoring plan Audit plan kept from SC pension chief Lawyers to check for retirement system fraud Financial board balks at pension system report
Carlton Washington with the state employees association says reduced increases and the hike in health care costs would make life harder for retired workers.
State officials expect the retirement fund to earn 8 percent each year. But the actuarial firm recommends reducing that estimate to 7.5 percent, based on market conditions today.
Comptroller General Richard Eckstrom says the General Assembly and the state Budget and Control Board need to take steps to put the system on sound financial footing. Projections show the main pension plan for the state's public employees and teachers has a more than $17 billion gap between money on hand and what it is required to pay current and future retirees.
The retirement system serves more than 106,000 people. It's estimated that if everyone entitled to a state pension retired right now, it would take more than 37 years to cover the bill.
Lawmakers are expected to have proposals drafted before the the next legislative session starts in January.
(The Associated Press contributed to this report.)