COLUMBIA, S.C. - S.C. lawmakers have reached an agreement on how to fix the state's $15 billion pension shortfall -- they just won't say what it is.
Lawmakers met Thursday morning to approve a compromise, mentioning several times what an "outstanding piece of legislation" it is. But they would not way what was in the bill, and quickly adjourned and left without taking questions.
The House and Senate versions of the bill had many differences, including the fate of the controversial TERI program, which allows state workers to retire and return to work for up to five years and earn a paycheck and retirement check at the same time.
Retirees, meanwhile, are wondering if their annual benefit adjustments will be guaranteed at 1 percent capped at $500, or tied to the pension funds investment returns.
Lawmakers are scheduled to debate the compromise on the floor of the House and Senate on Thursday.
"Im coming to you as the No. 1 conspiracy theorist in here to just say calm down," Rep. Gilda Cobb-Hunter told her House colleagues, adding that the bill is lengthy and it takes time to make copies. "Nobody is trying to do anything sinister."
S.C. lawmakers have until June 27 to reach an agreement on how to fix the or else taxpayers will be forced to give the system $150 million just to keep it solvent.
Negotiations broke down for the third straight week on Wednesday, with House and Senate lawmakers walking out of closed-door meetings, unable to agree on who should make decisions for the system that covers nearly 500,000 people.
If state lawmakers cannot reach an agreement, the State Budget and Control Board would have to raise taxpayer contributions to the $25 billion retirement fund by 1.63 percent to keep it solvent, according to Rep. Brian White, one of the boards five members. The changes would take effect July 1, 2013.
Im concerned, said Sen. Thomas Alexander, chairman of the joint House and Senate committee charged with reaching a compromise. I dont even want to think about what they would have to do.
The states retirement fund has $25 billion in it. The state uses it to pay monthly retirement checks to retired state workers, teachers, police officers, firefighters and lawmakers. The money in the fund comes from employee contributions, taxpayer contributions and investment returns.
However, over the last decade, the retirement fund has not been able to keep up with the benefits it owes retired state workers for a variety of reasons, including huge investment losses the system sustained during the Great Recession.
Accountants predict that sometime over the next 30 years the retirement fund will run out of money, falling about $15 billion short. To avoid this, state taxpayers would have to pay billions of dollars to make up that shortfall. Thats why lawmakers want to change the law to make state workers contribute more to the system and work longer before they retire.
State workers and retirees are anxious to get a bill passed this year because next year the shortfall will grow, which could result in more drastic changes to fix the system.
You could almost guarantee that folks who are not supportive of state employees and retirees would push the panic button and consequently any legislation would reflect that, said Carlton Washington, executive director of the S.C. State Employees Association.
House and Senate lawmakers say they have agreed on most issues. The problem is they disagree about what governing body should make decisions about the states retirement systems. The Senate is insisting on creating a Public Employee Benefit Authority, made up of nine members, four of whom would be retirees or employees covered by the system.
House lawmakers say it is irresponsible to give that much power to people with a financial interest in the system.
Late Wednesday, however, both sides indicated they were close to an agreement but they needed help from their colleagues to get it. Committee members said they wanted to increase the number of people on the retirement systems governing authority to 11. Seven of the 11 board members would not have a financial stake in the system, diluting the voting power of state workers and retirees.
The House and Senate unanimously approved the requests. The retirement committee is scheduled to meet today.
South Carolina is one of just seven states nationwide that has not passed some form of major retirement reform to fix shortfalls, according to Ron Snell, who tracks state retirement systems for the National Conference on State Legislatures.