The State, a Columbia, South Carolina, newspaper, said Sanford wrote in a letter to House Speaker Bobby Harrell that he worries about the solvency of the pension plan, which is underfunded by billions of dollars. “This bill is fundamentally flawed, and as such will prove to be a real problem in the long run to both taxpayers and retirees,” Sanford wrote, according to the news report. “We have absolutely no plan for addressing the existing liability — which would put you in jail if you did this with private pension fund assets — and yet we are going to add to spending commitments.”
The bill would have increased the guaranteed annual cost-of-living adjustment for the state’s roughly 100,000 retired employees to 2% from 1%. Harrell predicted the legislature will override the governor’s veto before it adjourns for the year in two weeks.
Sanford also took issue with raising the projected annual return on pension plan investments from the current projected level of 7.25%, saying it was “out of line with other states facing similar retirement issues.” Voters gave those responsible for managing pension funds approval in 2006 to put the funds in a variety of investments in hopes of improving the return.
Harrell said the governor’s arguments do not make sense as the legislation was designed to shore up the retirement system, according to the news report.