Indeed, it's imperfect. It's also unnecessary, as lawmakers could have adopted -- could still amend themselves and adopt -- a host of alternative strategies, from raising sufficient revenue to address the state's obligations while holding public workers harmless, to restoring all of the positions that have been eliminated in recent years, which would infuse the retirement system with a wave of new contributions from new, potentially younger, employees.
Or, the legislature could have exempted all current employees from higher costs, but established higher contribution levels for all prospective employees.
Of course, lawmakers could have done something even more honorable and committed themselves to giving public employees decent wages and salaries.
This being South Carolina, I reckon it's too much to ask. We have corporate tax breaks to protect and private school vouchers to fund. It's a matter of priorities.
For the editors of the News, the priority is protection of the state's bond rating, not protection of public workers.
The fix is needed because the S.C. Retirement System fund faces an unfunded liability of at least $13 billion. That liability would double to $26 billion by 2041, according to a recent report in The State newspaper.
Such rapidly increasing liabilities would jeopardize pensions for workers who are depending on the state pension fund to maintain their standard of living in retirement.
The unfunded liability could have an impact on state taxpayers, too. If the state is unable to meet obligations to retirees -- or if it appears those obligations will go unmet -- South Carolina could lose its much-coveted AAA credit rating. That would lead to higher interest rates if and when the state borrows money, and those higher interest rates would lead to higher taxes for everyone in the state.
So when public employees -- many of whom qualify for and receive public assistance due to their low incomes -- pay this additional penalty for the privilege of being a public worker and hoping for a small pension in their retirement, they should feel good about it. After all, they're paying more so that the rest of us won't be bothered.
It's a great burden they carry, I'm sure, but that's why we have an institutionalized and permanent underclass in South Carolina -- to do the work of the wealthy, and to protect them from feeling any pain.
Say, is it still true that the tax on purchases of yachts is capped in South Carolina at $300? It's highway robbery; I don't see why the yacht-sales tax couldn't be cut in half, or eliminated altogether. But that's a note for another day.
These are not easy decisions. But poor decisions and the economic collapse of 2008 have put the state pension fund -- and pension funds in many states -- in a significant hole. That unfunded liability would have significant consequences if it was not fixed. For starters, state employees might not receive the benefits they have been promised. That needed to be addressed.
Great points, but let's pause for a moment on the reference to "poor decisions;" they deserve some attention, and not to be glossed over.
South Carolina has enjoyed some boom years recently, when times were so spectacularly good that we could afford to cut taxes here, cut taxes there, give corporate incentives to locate in our state, give a passel of new corporate tax breaks, and still achieve our highest priorities -- among them, to weaken public schools, cut public employment rolls, reduce public services, and make the poor suffer even worse.
Hey, what's good governance if we can't achieve our priorities?
I have to believe that if, among all that tax-cutting and tax-breaking and incentivizing during the good times, our lawmakers had also invested a teensy bit more in the state retirement system, we might not have wound up in a precarious position as we have. I learned about compound interest in the fifth grade, so it mustn't take much brain power to understand that a tiny increase in investment, when invested appropriately, yields great rewards over the long term.
Poor decisions, indeed, if our legislators didn't attend to their responsibilities year after year after year after year when they could have honored their obligations to the state's workers.
If this bill passes the Senate and is signed by the governor, lawmakers will have been successful in implementing reasonable changes that will preserve benefits for public employees and protect taxpayers from the potential default of the retirement fund. Of course, the state needs to continue watching the fund's performance, and it needs to ensure that further adjustments are not needed.
God forbid that additional adjustments will be needed. We'll have to re-institute poorhouses in which to lodge our public employees when they're evicted from their rental houses, and when their public assistance benefits finally expire.
Other states are facing the same situation as South Carolina and some of them have begun exploring a move toward the 401(k)-style retirement funds that many private-sector workers rely on.
Oh, that's a fine idea. Let's leave our public workers' retirement benefits at the mercy of the stock market and its corporate master, who have just proven since 2008 that they answer to no authority but themselves, and they respect nothing but their own profits.
If that's our best option, we might as well send letters to our public employees advising them to work until they die, as it's the only way to ensure a little income through that eventuality -- with an emphasis on little.
Editors of the News seem more than a little enamored of this notion:
Legislators should at least study such an idea to determine if it's a long-term option for the state's retirement fund. The recent changes, however, could buy some time to see if more dramatic changes would be needed.
After all, public employment is public service, and public service is about sacrifice. Who better to demonstrate sacrifice than our public employees?
It is not unreasonable to ask state employees to make some sacrifices to ensure their retirement remains stable rather than asking taxpayers, many of whom are seeing less stable benefits, to foot the entire bill.
Especially -- it goes without saying -- our wealthiest citizens, who struggle already with the exorbitant sales taxes on their mansions, acreages and yachts. Damn it all, the line must be drawn somewhere!
That's especially true in an era when private-sector workers are being asked to get by with less help from their employer for retirement because of wage cuts or freezes, frozen benefits, and change-overs to defined contribution retirement plans.
Let's not stop with that short list; by all means, let's add because of statutes that prevent private-sector workers from bargaining collectively with their employers.
If we're going to kick the proletariat in the teeth, make sure to get all the way to the ones in the back, the wisdom teeth. Anything worth doing is worth doing well.
These changes are fair, sensible and deserve to be passed. Then lawmakers need to watch carefully to ensure the pension fund can stay on the path to solvency while continuing to provide promised benefits to the many retirees who will rely on this fund during their golden years.
One laughs to keep from crying.