House robs veteran state employees' retirement benefits

If this action occurred at the intersection of Main and Gervais streets in Columbia, the police would be called, someone would be arrested and 220,000 charges of grand larceny -- felonies, all -- would be filed.

But because it happened a couple hundred yards away, in the House Ways and Means Committee meeting, it's entirely legal. It's still highway robbery -- still grand larceny -- but it's legal.

What happened is this: Committee members voted to take retirement benefits away from 220,000 state employees by making them pay one percent more per year, by stretching out the period of years upon which the retiree's final average compensation is based, and by robbing employees of their ability to include unused sick leave and vacation leave in their benefit calculation.

Stealing back their unused sick leave and vacation leave alone will cost retirees roughly $1,000 per year, or five percent of their lifetime benefit. That's because most state employees are not paid well -- we're not talking about Steve Spurrier or those secret legislative retirement packages; we're talking about municipal workers who began their careers during the Carter administration. State retirees collect an average retirement benefit of $18,500 per year.

The Ways and Means Committee unanimously approved Tuesday a bill requiring newly hired employees to work an additional two years to collect full retirement benefits, while current employees could still retire after 28 years.

It would require workers to contribute more toward their retirement. The committee approved a phase-in, increasing the contribution from 6.5 percent of their salary to 7.5 percent over two years, instead of in one shot July 1.

This is called paying more and getting less.

Other parts of the bill are meant to prevent what's called spiking. Benefits would be based on employees' last five years of pay, rather than three.

Until the pay freezes of the past four years, state employees could count on a little bit of an increase in their pay each year -- enough of a raise to add cheese to a Whopper combo, not enough to buy a new Oldsmobile -- and an employee's final average compensation was calculated on their last twelve consecutive quarters, or three years. Lawmakers have decided its wiser to stretch that out to twenty consecutive quarters, or five years, in order to lower the employee's potential retirement benefit.

The difference means that during winter months, when heating fuel prices spike, retirees will be keeping their thermostats down at 65 degrees rather than 72 degrees.

Various attempts were made to limit the carnage, including throwing some veteran state employees under the bus in order to protect other ones.

The Palmetto Teachers Association believes employees within five years of retirement should be exempted from those changes, while the South Carolina Education Association wants all current employees exempted from them.

Why only exempt employees within five years of retirement? That boneheaded notion concedes that the theft from those just outside the arbitrary five-year line is legal, fair and ethical.

In fact, every current state employee should be exempted from any changes that are made to the retirement system. It's a foreign concept, I know, but there's an issue of fairness here: The agreement made with a public employee when he or she is hired is the agreement that should stand throughout that employee's career. You don't change the terms of the contract ten years down the road, or 20 years, or 28 years, and make the changes retroactive to day one.

That is r o b b e r y.

I noticed that a district court judge in Florida ruled on behalf of teachers and public employees there just yesterday, saying that any changes made to the retirement system may be prospective -- meaning they apply to future public employees -- but not retroactive. Sure, that's Florida, and South Carolina's lawmakers take no direction from Florida's laws, but then South Carolina lawmakers take no direction from their own laws, either.

Rep. Joe Neal, D-Hopkins, said the changes and increased contribution requirement will "inflict pain and damage on very vulnerable people."

The average salary for all employees who are paid at least partially through the state budget is $49,000. Nearly 56 percent of public employees earn less than $35,000 yearly, according to the state Budget and Control Board.

Neal's absolutely right. Ask the nearest public employee what he or she earns, and marvel at how little it is -- even teachers in your child's school. There's no danger of becoming wealthy as a public employee in South Carolina, unless you're a heart surgeon at the Medical University of South Carolina, or you coach football at USC.

The State newspaper quoted Rep. Jim Merrill on the matter:

“The easy thing to do would be for this committee and the House to do nothing. You do nothing and everybody walks away and no election impacts, no dirty emails,” said state Rep. Jim Merrill, R-Berkeley, chairman of the subcommittee that crafted the bill. “What the committee did is it rolled up its sleeves and made difficult decisions.”

Yet I've seen no one discussing the difficult decision of replacing all those public employees laid off and fired during the past several years' budget cuts, when everyone understands that adding more public employees would infuse the retirement system with fresh contributions.

Nope, no one's mentioned that. Can't afford it.

But we can afford to give $37 million in tax breaks to wealthy parents who enroll their children in private and parochial schools.

Something's rotten in this picture, as The State cannily observed.

Just moments before discussing the retirement bill, the House Ways and Means committee approved a bill that would give tax deductions to parents of home-school and private-school students. If that proposal becomes law, it would cost the state $36 million, money that state Rep. Brian White, the budget committee’s chairman, said he did not know where the state would get.

“They should have dug deeper to protect current employees just like they dug deep on (the private- and home-school deduction),” said Carlton Washington, executive director of the S.C. State Employees Association. “State employees expect the General Assembly to do what was promised to them.”

Wise words from the state employees' leader. Promises were made.

But in South Carolina, a promise made by our legislature is just so much hot wind.