= = &nb= sp; = &nb= sp; = &nb= sp; = &nb= sp; = &nb= sp; =

The South Carolina = State Employees Association, SCSEA, represents the interests of both active state employees and retirees. Our objective is to effectively advocate positions that are representative of a= ll our members. The article in today’s publication of The St= ate newspaper, SC Pension Fund – Retirees: Put Burden on Workers, Taxpayers mistakenly reported that the SCSEA only represents the interests of active state employees. The reporter= , Adam Beam, is running a correction and will publish another related article in t= he near future. To read this article, go to http://www.thestate.com/2011/10/05/1997307/retirees-put-burden= -on-workers.html

For the record, the= SCSEA advocates protecting three fundamental aspects with regard to any proposed change to the state retirement system.&nbs= p; Those aspects are maintaining a defined benefit plan, 28 year retire= ment, and COLAs for retirees.

As a matter of comm= on interest, we have collaborated for some time with a number of organizations, including the State Retirees Association of South Carolina. Until now, it has been our common position and agreement throughout those discussions that any recommendation= s at this time would at best, be premature.&nbs= p;

At this point, our association has requested cost analysis projections, a fundamental requirem= ent, in order to base any recommendations. In addition, the SCSEA has requested other pertinent information in order to fully address this issue. It is equally important to receive and give full consideration to comments offered during the public hearings. Those hearings are now underway ar= ound the state and extend throughout the month of October. Therefore, any recommendations pri= or to the completion of the public hearing process would serve to preempt the voi= ces and collective interests of state employees and retirees.

An issue of this significance deserves full consideration.&= nbsp; The SCSEA is committed to protecting the interests of all our members. Our association will= not succumb to any pressure to produce recommendations without the benefit of a= ll available information. <= /o:p>

Your attendance and comments during the public hearings is critical to this process. I encourage you to make every effo= rt to attend the public hearings and let your voice be heard. Feel free to include in your comme= nts the association’s priorities – a defined benefit plan, 28 year retirement, and COLAs for retirees.

As always, if you h= ave any questions, please do not hesitate to contact me directly at (803) 765-0680.=

Carlton B. Washington

SCSEA Executive Dir= ector

PLEASE NOTE:

SCSEA Membership Applications can now be downloaded online at www.scsea.com

Online Enrollment and = Dues Payment Options Coming Soon!

Wednesday, Oct 5, 2011 =

Posted on Wed, Oct. 05, 2011

Retirees: Put burden= on workers, taxpayers

Plan would have both groups pay more to address deficit

By = ADAM BEAM

State retirees want taxpayers and current state employees to pay more to fix the = S.C. retirement system according to a plan presented to House lawmakers.

State retirees want taxpayers and current state employees to pay more to fix the = S.C. retirement system.

That= 217;s according to a plan the retirees presented Tuesday to House lawmakers.=

The sta= te retirement system owes about $42 billion in pension benefits to its 458,000 current and retired employees and their beneficiaries, but only has about $= 25 billion to pay them – a debt so large and growing that accountants project the state never will be able to pay it off unless changes are made.=

Account= ing rules require pensions to be able to pay off their debts in 30 years or les= s. Anything larger – and it would take South Carolina between 35 years and 64= years to pay off the pension debts, according to two projections – could af= fect the state’s credit rating, costing taxpayers millions of dollars more= if the state has to borrow in the future.

House a= nd Senate lawmakers have been meeting for weeks to figure out how to fix the pension problem.

Tuesday= ’s meeting of House lawmakers included testimony from the State Retirees Association of South Carolina. The plan put forward by the association, the first group to offer a plan to change the system, includes:

•= Limiting cost-of-living raises to retirees 55 and older. Now, all retirees are eligi= ble for cost-of-living adjustments, regardless of their age.<= /p>

•= Increasing the amount that state employees and taxpayers pay into the retirement syste= m by 0.75 percent of each state worker’s salary. (The employee part would = be phased in over three years)

•= Eliminating interest on the pension accounts of inactive members, meaning employees who= no longer work for government could keep their contributions but not earn inte= rest on them.

Keeping= the assumed rate of return on the state’s retirement fund investments at 8 percent

Sam Gri= swold, a spokesman for the Retirees Association, said he is not sure what impact t= hese recommendations would have on the state’s pension debt. But his “ballpark assessment” is they would lower the state’s deb= t to 20 years of payments or less, well within the 30-year accounting standard.<= o:p>

Carlton Washington, executive director of the separate S.C. State Employee Associat= ion, made up of current state employees, said he thought it was interesting that= the state’s retirees, who no longer pay into the system, want employees working for the state now to pay more.

“= It is not something that we could support at this time simply because we don̵= 7;t have all the information,” he said.

But Gri= swold said state retirees already have “put money on the table” by offering to limit cost-of-living raises to retirees 55 and older and loweri= ng the cap on those annual raises to 2 percent from 4 percent – a change that took place in 2008. “That’s money we put on the table that= state employees did not,” Griswold said.

House lawmakers thanked Griswold for his recommendations but hesitated to pass judgment. They want accountants to review the recommendations to see how th= ey would impact the retirement system. They also closed the meeting to the pub= lic so they could discuss with lawyers what they legally are allowed to do.

“I really want to make sure that, as much as possible, we reduce the ability – or the inclination, I should say – for somebody to file a lawsuit,” said state Rep. Gilda Cobb-Hunter, D-Orangeburg. “Regardless of what we come up with, somebody is not going to like it.”

The key= to Griswold’s proposal is keeping the assumed rate of return on the retirement fund’s investments at 8 percent. Cutting that rate would increase dramatically the state’s pension debt because it would mean = the retirement fund would project to make less on its investments.

Another impact: Cutting the assumed rate of return would, by law, cap the annual cost-of-living raises for retirees at 1 percent. Currently, those raises are capped at 2 percent.

“= By reducing (the rate), you actually are increasing the (pension debt). That is exactly the opposite direction we want to go,” Griswold said.

But the state’s accounting firm said assuming an 8 percent rate of return is unrealistic given the poor state of the economy. For the past five years, t= he fund’s rate of return has been 4 percent. The accounting firm recomme= nded cutting the rate to 7.5 percent, a figure that Bob Borden, the retirement f= und’s chief investment officer, endorsed. Doing so would lower the state’s pension debt by about $3.7 billion, according to a report from Gabriel Roed= er Smith & Co.

The rat= e of return is set by the State Budget and Control Board. Two of the five member= s of that board, Comptroller General Richard Eckstrom and Gov. Nikki Haley, have indicated they are willing to lower the rate.