updated March 4
You’ve heard it before—the S.C. Retirement System Investment Commission and the state Treasurer Curtis Loftis are at odds over the $427 million in fees the commission pays for the $27 billion pension plan. On fees, it’s Loftis versus the commission. On returns—in the bottom 20 percent, according to Loftis—the same. But for one retiree, that debate is an artificial one.
It’s really an internal debate among the members of the commission, a seven-member group that Loftis—the only member not required to be qualified to invest—belongs to, says Wayne Bell.
A former county and regional director for the Department of Social Services, Bell retired from working in state government in 2001. He says the distinction is important because it changes the debate.
For Bell, who is also president emeritus of the State Retirees Association of S.C., the issue isn’t a taxpayer issue, at least not outside of the state employee pool. As a retiree, Bell is confident with the approach the commission takes in investing—conservative and diversified among 12 investment “baskets.” “Most retirees don’t have a private portfolio,” says Bell. “That’s why it’s so important we have a cautious and conservative approach to investing.”
Of course the fund’s unfunded liability—$17 billion, according to an online presentation by Loftis—could impact taxpayers in the long run. Loftis described the liability in an interview as “the single largest debt South Carolina has by far.”
And the pension is one of the most under-funded in the nation, says the commission’s Chief Operating Officer, former Sen. Greg Ryberg. The pension should have $46 billion.
The commission must average earning 7.5 percent over the next 30 years to bring the plan’s liability to zero. If the body fails, members—currently 120,000 retirees and 200,000 active employees—and taxpayers will have to bump up contributions to fund the system.
A special Senate Finance subcommittee will hear from the commission’s chairman, Reynolds Williams and the director of operations, Sarah Corbett Tuesday. The subcommittee has held a series of hearings this year as the body deliberates on how to end the conflict, which some have said breeds uncertainty among retirees in the pension. Senators plan to present recommendations to the full Senate Finance Committee in the coming weeks.