State Retirement Benefits Could Soon Change
COLUMBIA, S.C. (WOLO) — “If it’s going to be paid, it needs to be funded,” says Joe Newton of GRS. Wednesday a Senate panel heard recommendations on how to repair South Carolina’s broken pension system. “Taking into consideration, the idea that you are poorly funded, this shows you need more contributions coming into this plan or this benefit trajectory needs to be dampened, needs to be brought back down,” says Newton. Right now, future projections indicate a $17 billion dollar gap in the pension plan that affects state employees and teachers. That gap represents the money the state has, and the money the state still owes to retirees. A bill that could take decades to pay off, if changes aren’t made. “If you stay at the current contribution rate, we would have 37.6 years,” says William Blume, Jr., of the State Budget and Control Board. That’s seven years more than financial standards accept for debt payments. But, is there a solution? Experts say, the expectations surrounding pension fund investments should be lowered from the current 8% to 7.5%. Also, because people are living longer now, than they were ten years ago, experts recommend cost lof living increases should not excceed one percent. Experts say, regardless of how the state got here, something must be done. “To ignore where market is today, would put you in a situation where you will come up with one solution and have a high probability of having another committee 3 to 4 years from now,” says Newton.
