Haley to state employees: Cuts in pay, benefits are possible - wistv.com - Columbia, South Carolina

Haley to state employees: Cuts in pay, benefits are possible

By Jack Kuenzie - bio | email

COLUMBIA, S.C. (WIS) - Governor Nikki Haley says current state retirees don't have to worry about losing their benefits, but she says the retirement system is still heading for red ink and needs to be fixed.

"My commitment is to you," Haley told several hundred state retirees on Tuesday. "We will take care of you as promised. But I need your help in making sure that we become solvent."

Haley's appearance at a meeting of the State Retirees Association allowed her to reassure more than a half-million current and former state employees they would get what they'd worked for.

However, there is less clarity about what future state workers might face. Haley says the state is heading for at least $13 billion dollars in unfunded benefits liabilities.She says it would cost $100 million in the current budget to keep up.

"I think what we do know is that future employees coming in are going to have to work longer, they're going to probably get less benefits and they're going to have to contribute more," said Haley. "That's what we know.

House Ways and Means Committee Chairman Dan Cooper said Tuesday the cost is just $32 million. He says that can be handled by employees and state agencies paying more.

What to change -- and by how much -- depends on a more accurate estimate of the liability gap. Haley wants an independent study. "I don't think anybody's right," she said. "We need to find good actuarial numbers that make sense. We need to find out exactly what the numbers are first and then we need to say how we're going to deal with it. But right now no one knows what the numbers are."

"I know that if our system is based on an eight percent return and we're not getting it, something's gotta be done or else the unfunded mandates will continue to creep up," said retiree and former state senator Jim Lander.

But former DSS leader and former Retirees Association President Sam Griswold says the retirement system is in general is still working well. "My best assessment is the problems are very fixable," said Griswold. "There is no magic wand that we need to wave here."

Haley hasn't said specifically how she thinks the gap should be closed, or whether she wants to do away with state pensions and move to a defined contribution system like former Governor Sanford.

A report on the Pensions and Investments website says at least ten states including North Carolina are exploring that option.

Copyright 2011 WIS. All rights reserved. AP contributed to this report.

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