Pension woes main focus of Senate hearing [Aiken Standard, S.C.]

<table cellspacing=0 cellpadding=0 border=0><tr><td align=right>Source: </td><td>McClatchy-Tribune Information Services</td></tr><tr><td align=right>Wordcount: </td><td>633</td></tr></table><!-- start_body --><br><p><chron>Oct. 20</chron>--More than a dozen <org>South Carolina state</org> retirees and those nearing retirement expressed concern about the status of their benefits at a special S.C. Senate Finance subcommittee hearing in <location value="LU/us.sc.aiken" idsrc="xmltag.org">Aiken</location> Wednesday.</p><p>S.C. Sen. <person>Greg Ryberg</person>, R-<location value="LU/us.sc.aiken" idsrc="xmltag.org">Aiken</location>, is a member of the subcommittee, which is looking at the fiscally struggling system. Another <location value="LU/us.sc.aiken" idsrc="xmltag.org">Aiken County</location> senator, <person>Shane Massey</person>, was invited to sit with the subcommittee in the meeting at <org>Aiken Technical College</org>.</p><p>According to a S.C. Retirement System actuary, the system has more than <money>$19 billion</money> in anticipated debt, for which there are no existing plans to address. Twelve years ago, the liabilities in the system were effectively zero. Investment losses, an increase in retirees combined with fewer state employees in the system, the failure of the <org>S.C. General Assembly</org> to include cost-of-living adjustments in the retirement plan -- those are just some of the cited reasons for the huge debt.</p><p><person>Sandra Shealy</person>, an <org>Aiken-Barnwell Mental Health Center</org> staffer, said possible changes in the system could affect her. She chose to work for the state "and didn't think I'd be rich, but wanted a job that was secure and would have a stable retirement."</p><p>State workers have gotten no pay increases since 2007 and no merit raises since 2001, Shealy said.</p><p>Their insurance premium costs continue to go up, and now they're worried about the future of their cost-of-living increases.</p><p>"We're asked to do more with less," she said. "It's troubling to me that many workers would qualify for <org>Medicaid</org> and food stamps if they applied for them. This is a perfect storm, and good employes would leave because there is no incentive to stay."</p><p>Some proposed ways to alleviate the liabilities include reducing the rate of return expectations, ending the TERI retirement package and the ability to retire after 28 years of service.</p><p>However, speakers <person>Jane Page Thompson</person> and <person>David Kjellquist</person> urged the subcommittee members to consider a more sweeping change. They would replace the existing "defined benefits" plan -- a formal pension -- with a defined contributions plan. The funds received in that structure would depend on how well a state employee did in investing his or her own retirement funds.</p><p>"Each individual makes his own retirement decisions," said Kjellquist. "He could move funds around early in (his career) and become more conservative later... The consequences of unsustainable commitment would be far worse."</p><p>The state of <location value="LS/us.id" idsrc="xmltag.org">Idaho</location> made that change, Thompson said, and reduced its unfunded liabilities by 92.8 percent in just four budget cycles.</p><p>"This must be a legislative imperative," said Thompson. "Something is better than nothing."</p><p>Massey said he hasn't heard of any proposals that would affect current retirees or those already in the system for many years.</p><p>"We're talking now about newer and future employees and a new system," he said. "A contributions program through a 401(k) would be more than adequate. It's a different day and time for younger people."</p><p>Although he's just one vote on the subcommittee, Ryberg said he doesn't think the defined contributions plan would become a significant part of the discussion.</p><p>"We have to have a viable system to make sure the retirement is there for the people who are here tonight and are concerned about that," Ryberg said.</p><p>When his mother was a teacher decades ago, there was no retirement program, said <person>Tom Walton</person>, also a retired educator. Through the years, legislators eventually were convinced to provide a decent pension plan, he said.</p><p>"It's supposed to be there," Walton told the senators. "It's your job to live up to your commitments. Think about us, and don't betray us. You have a tough, tough job, but we deserve everything that was promised to us."</p><p class="shirttail">___</p><p class="shirttail">(c)2011 the Aiken Standard (Aiken, S.C.)</p><p class="shirttail">Visit the Aiken Standard (Aiken, S.C.) at www.aikenstandard.com</p><p class="shirttail">Distributed by MCT Information Services</p>