South Carolina Treasurer Curtis Loftis blasted the recommendations of the Joint Committee on Pension Systems Review. The Committee, consisting of 12 House and Senate members appointed by Speaker Jay Lucas and Senate President Hugh Leatherman, recommended changes to the pension system which must be approved by the full House and Senate and signed into law by Gov. Henry McMaster to go into effect.
One of the panel’s recommendations would be to increase the pension contributions paid by school districts, local governments and state government from 11.6% of employee salaries to 13.6%, effective July 1 of this year and eventually increase the contribution to 18.6% within six years. Since many school districts and local governments have calendar year budgets, the pension contribution increase would impact their current budgets.
The pension review committee also recommended removing Loftis from the seven-member Retirement Systems Investment Commission and stripping the Treasurer’s office of custodial control over the pension fund. Loftis has been critical of the pension fund’s high management fees and low rates of return since taking office in 2011.
A recent ruling by Attorney General Alan Wilson indicates that the accounting methods used by the Public Employee Benefit Authority (PEBA) were in violation of state law and masked the unfunded liability in the pension fund, estimated to be at least $25 Billion.
Loftis issued a statement criticizing the legislative panel. “The Committee recommendations do not make meaningful movements towards curbing the ballooning debt, skyrocketing contribution rates or halting the likely illegal and unconstitutional actions of the PEBA,” Loftis said.