Posted on 09/05/2016 12:40:03 PM PDT by Lorianne
Billions in unfunded obligations in the South Carolina pension funds for state and local government workers, teachers and police officers are “a freight train out of control,” a state representative said Tuesday.
The unfunded obligations of the largest of those pension funds, the S.C. Retirement System, are expected to grow by $1.4 billion over the next year, according to actuarial firm Gabriel Roeder Smith and Co.
That system serves more than 180,000 state and local government employees, including teachers. Another 134,634 retirees also are part of the system.
The Retirement System has about $24 billion in assets, according to the Retirement System Investment Commission. But the system has $16.8 billion in unfunded liabilities — the difference between the amount the pension fund has to pay retirement benefits and the amount it has promised to pay. That red ink is expected to grow to $18.2 billion in the next budget year.
A group of state lawmakers held their first meeting Tuesday to try to come up with a way to meet the state’s unfunded pension obligations.
South Carolina has five pension funds for public workers.
However, the joint panel of state House members and senators will focus on just the two largest retirement systems — the S.C. Retirement System and the police officers’ retirement system.
The police officers’ pension system, created in 1962, serves state and local law enforcement agencies, including the State Law Enforcement Division, and the departments of Corrections and Juvenile Justice. However, the majority of officers in the system are from county sheriffs’ departments, said Public Employee Benefit Authority director Peggy Boykin.
The police pension system has about $3.9 billion in assets. An actuarial firm will project its unfunded liabilities in November.
Lawmakers will not look into three smaller pension systems — ranging in assets from $23 million to $140 million. Those systems cover judges and solicitors, National Guard members, and a generous system that benefits legislators, which is being phased out.
Funding for the pension systems comes from employer contributions, generally state or local governments; employee contributions that come from the worker’s paychecks; and earnings on those contributions, which are invested.
South Carolina’s pension systems are in the hole because of a number of factors.
Once limited to investing only in bonds, the pension funds’ investments in stocks have not been as lucrative as projected, earning just less than 5 percent a year over the last decade. In part, that is because the system bought stocks just before several down markets, including the late 1990s dot.com bubble and 2007’s Great Recession
SNIP
“Now people claim the workers are the bad guys.”
This has nothing to do with workers doing something bad. It has to do with their expectations of getting paid in the manner they were promised.
It’s not going to happen.
There isn’t enough money, and taxpayers without pensions need their money for their own golden years.
The end result is a pension haircut, maybe a big one. The same thing will happen with social security and federal pensions. The feds can print and pay, but those will be dollars of a fractional value of the expectations.
This is how govt pensions end. And end they will when budgets can’t afford to pay pensioners.
It’s just cold, hard reality.
I could say a lot about this, but it would sound like I am complaining, so I won’t.
Welcome to our club (NY and NJ). Tier One retired teachers in NY got astronomical pension awards. Now it’s time to pay the piper, as they are living longer and the economy is poorer. And guess who is paying that piper.
>>This has nothing to do with workers doing something bad. It has to do with their expectations of getting paid in the manner they were promised.
If you don’t get paid what you were promised, do you just shrug your shoulders and say, “Well, that’s OK”?
If the politicians vote in a new tax and the people say they can’t afford it, does the government just shrug and say, “Well, that’s OK”?
Why are workers the only people in America who are ever expected to do more for less, and to just lower their expectations?
the pensioners were the first to get hammered in Weimar...jus sayin...
“Why are workers the only people in America who are ever expected to do more for less, and to just lower their expectations?”
I expect folks will be pissed, and there will be no end to the sob stories, some real, some feigned. None of that matters.
In the end, there simply isn’t enough money to pay everyone in full.
This happens in the private sector all the time. Nobody cares. In the end nobody will care about these folks either.
It’s their bad luck. They will have to figure it out, just like folks always have had to.
The pending SS/Medicare crash is a big driver of legalizing illegals. Professional legislators want to extend the crash by adding new young workers to the payroll scheme to replace the millions of American workers who were aborted over the last 50 years.
>>Nobody cares. In the end nobody will care about these folks either.
This is why I laughed at the hypocrisy during the primaries of all these FReepers who wanted the “Christian” candidate so much because he would bring America back to God. Our only God is the dollar and our Golden Rule is “I got mine. Tough crap that you didn’t get yours!”
The other thing to consider is that if pensions were fully funded there would be far fewer govt emplosses, because their cost would be realized in current year budiets. But then big bureaucracies would have not grown to direct every facet of our lives.
So what needs to happen is to haircut pensioners now, fully fund present workers pensions, and accept that you will have to fire a sizeable chunk of non-retirees to make the budgets work, causing further fiscal drains on pension funds because fewer will be paying in.
It’s a true fiscal disaster, but it isn’t one society as a whole owes these govt pensioners. They are on their own, just like everyone else.
A post for the ages. :)
Thank you, in more ways than one. I really am part of the problem, being an AF retiree. I still work to help pay my way, but I still realize it could end tomorrow if we have an economic collapse. Same with social security. You and the rest of the country helped buy the fuel for the aircraft I loved to fly and pay me for the privilege and provide a pension. For which I remain ever grateful.
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