SC Senate Approves Pension Overhaul

April 8, 2005 ( - The South Carolina Senate has approved a plan to overhaul the state retirement system.

>The bill, which passed the upper house on Thursday, attempts to curb growth in the pension system’s debt, according to the Columbia State. The bill must still pass through the lower chamber, however.

>The reform, if passed, would create an investment board that would manage $24 billion in pension assets for the state, and remove a cap – set currently at 40% of assets – on allowable stock investments. It would also limit who could return to work after the completion of a state initiative – the Teachers and Employee Retention Incentive program – for retired workers.  

>On top of this, the bill would require working state retirees (those in the aforementioned program and those who still work after it is complete) to contribute 6% to the state pension system. It would also let employees decide whether they wish to pay more into the system and retire after 28 year of service, or pay less and retire after 30, the paper reports.

>House members are reportedly making recommendations regarding the bill that they hope will become part of the final plan.

State and local pension reform has been a hot issues as of late, with Alaska, California, New York City and New Jersey all looking into reforming their defined benefit pension plans to take some of the burden away from the government for funding such systems (See Alaska Grapples With Pension Reform  and  Golden State Analysts: Pension Reform Could Save More than $1B ).