South Carolina Lawmakers Contemplating Additional Pension Reforms

New 401(k)-style plans heavily discussed in first-time legislative off-season meeting.

Months after passing a pension law, South Carolina lawmakers are again proposing pension reform to state employee retirement benefits.

For the first time in the legislative off-season, a joint committee tasked with reviewing state employee, police officer, and other local South Carolina government worker pension plans met at a Columbia meeting.

Governor Henry McMaster sent a letter to the lawmakers with blueprints for his retirement system plans in advance.

McMaster pressed for new state employees to be enrolled in a 401(k)-style plan instead of the pension system, with additional promotion and tenure-based benefits to be extended to the new workers.

McMaster also called to raise the retirement age of those currently in the pension system and to ban new cost-of-living-adjustments for pensions that have not reached full funding.

The recently passed pension law increased mandatory pension contributions for state employees and their public employers — including those from the Police Officers Retirement System (PORS) and the South Carolina Retirement System’s (SCRS)— to aid the state system’s estimated $24 billion unfunded liability.

According to the Post and Courier, most of the meeting was spent discussing moving from the state-managed pension system to a 401(k)-style program.

“While [raising employee contributions] was a necessary first step, we must now take on the task of making the hard decisions,” McMaster wrote in his letter. “Like all of you, I strongly believe that we must maintain our commitment to the 11.5% of South Carolina’s population that relies on SCRS and PORS, while protecting taxpayers from bearing any additional financial burden caused by inaction or indecision.” 

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