COLUMBIA, S.C. (AP) — A bill reforming South Carolina's pension systems for public workers headed Thursday to the governor's desk, as the special legislative session wound to a close.

The House voted 88-9 and the Senate voted 43-0 on a compromise agreed to hours earlier by a six-member conference committee. The agreement is largely the Senate's version of the bill.

"I think it's a fabulous package," said Sen. Greg Ryberg, R-Aiken. The retiring senator, who's fought for pension reform for years, praised the compromise as keeping the system solvent, while being fair to workers.

Rep. Jim Merrill, who led the House panel on the issue, described it as "very, very, very good."

"To not do retirement is unacceptable. Voters won't accept it. The public won't accept it. It's really not even an option," Merrill, R-Charleston, said in asking the House for approval.

The governor is expected to sign the legislation. In a news conference Thursday morning, she urged legislators to pass it.

Both House and Senate versions already exempted current workers from changes in benefit calculations, applying only to those hired after June 30, and allowed current employees toretire with full benefits after 28 years of work.

Only new employees would be barred from factoring up to 45 days of unused vacation and 90 accrued sick days into their benefit calculations. For new hires, benefits will be based on employees' final five years of pay, rather than the current three-year average.

Under the approved compromise, new employees must meet a so-called "rule of 90" to earn full benefits, meaning that the worker's age and years of service must equal 90 at the time ofretirement.

Employees' contributions would increase by 1.5 percentage points over three years, from 6.5 percent to 8 percent of their salaries, with the first step taking effect July 1.

The Teachers and Employee Retention Incentive program would phase out in 2018. TERI allows public workers to officially retire but remain on the job for up to five years and accumulate pension benefits. Employees could enter the program as late as June 2013 and get the entire five-year benefit.

A limit on return-to-work employees takes effect Jan. 2, giving employees seven months to take full advantage of drawing both a salary and retirement. Next year, employees who officially retire then return to work would stop getting two checks once their regular pay for the year reaches $10,000. After reaching that ceiling, employees would draw only their salary. The process would repeat yearly.

A retiree must sit out for 30 days before returning to a job.

The compromise also adopted the Senate's automatic increase in retirees' checks. The House had tied any increase to the pension portfolio's rate of return. But the compromise guarantees a 1 percent increase, though with a cap of $500.

The threat of a $147 million bill loomed.

If the Legislature hadn't passed the bill, leaving the pension systems in status quo, the Budget and Control Board would need to vote as soon as next week to increase employer contributions to 12.2 percent in July 2013, up from the 10.6 percent taking effect in 10 days.

Those employer contributions equal taxpayers, through budgets of the state, local governments

Instant Insights /

S.C. legislature approves compromise on pension reform

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