As many as 7,500 public workers in South Carolina could decide to throw in the towel next year when an incentive program that keeps employees working after retirement age ends in 2018.

According to a report from the Associated Press, about half of those workers are teachers, which means that the state could be in for a major teacher shortage, as well as losing other public workers.

The Columbia, SC newspaper The State is cited in the report that, under a 2012 law meant to shore up the state’s pension system for public workers, the program known as the Teacher Employee Retirement Incentive program, or TERI, will officially close June 30, 2018.

Under TERI, retirees are allowed to work for up to five years more after they officially retire and continue accumulating pension benefits. Their money is paid in a lump sum at the end of the program.

While the state legislature initially created the program in 2000 to tempt teachers—already in short supply—to stay on the job, court decisions brought other public workers into the program.

That law alone, which also allowed workers to retire with full benefits after 28 years, constitutes close to $2 billion of a total pension debt that now totals more than $20 billion.

The state already has a teacher shortage, with close to 6,500 teachers leaving the classroom for good last year, and it’s not likely that they’ll remain once the program ends.

While public workers who have officially retired can keep working after TERI ends, the 2012 law suspends their retirement benefits once their paychecks total $10,000 for the year. They would then have to wait till next year for their pension benefits to resume, when the process would begin again.

The salary limit for working retirees and the end of the TERI program are “only magnifying what’s already a critical situation,” Pamela Arrington, chief human resources officer for the Newberry County School District, is quoted saying in the report, adding, “We”re all going to be looking for more people than we”ve been looking at before.”

The projected amount of the debt represents the state investment portfolio’s current worth, compared with benefits likely owed to all 550,000 people in the system over their lifetimes. Other changes in the 2012 law affected how long newly hired employees have to work in order to get full benefits, and how those benefits are calculated. Lawmakers have already passed another pension-shoring law earlier this year, increasing contributions, and say more changes are on the way.

Other state departments that could suffer from the program’s end include Corrections, Juvenile Justice and Social Services, all of which also struggle to recruit and retain employees, in part because of tough working conditions and low pay.

Instant Insights /

Wave of retirees could add to teacher, state worker shortage in SC next year

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