Governor, S.C. retirees clash over vote

COLUMBIA — Gov. Mark Sanford called Thursday for the state to be more conservative with the management of South Carolina retirees' money to brace for what he sees as a potential "wrenching recession" but the proposal was defeated.

A crowd of retirees cheered and one booed the governor when the Budget and Control Board voted 4-1 to shoot down his suggestion. Tangled up in the complicated issue, retirees saw the potential loss of their annual cost-of-living increases at a time when they can least afford it, said Sam Griswold, president of the State Retirees Association.

"They had a kind of feeling of disgust: 'do we have to fight this battle again? Do we have to jump through these hoops again?' " Griswold said of the reaction he got when alerting retirees to the vote.

Griswold, who retired after heading a couple of state agencies and serving as deputy director of the Budget and Control Board, said he is not sure the governor understands how hard it is for retired state employees to survive when the average pension pays $17,000.

"I don't know where he's coming from," Griswold said. "I will have to assume he's going on what he thinks is right."

Sanford said he does understand the perspective of the retirees who gathered to protest the vote, but he is concerned that down the line unstable investment decisions will ultimately cost retirees and taxpayers more.

The governor bases his argument on this: retirees now receive an immediate benefit based on future projections but if the market tanks and those projections don't materialize, South Carolina will be out $2.7 billion.

"If the math does not work, someone's got to pay the piper and it's going to be these retirees," Sanford said.

The Republican governor argued that the Budget and Control Board should reset the assumed rate of return on investments to 7.2 percent. The assumed rate was increased this summer to 8 percent.

The expected rate of return affects a retirement system's finances and could possibly reduce cost-of-living increases granted to 100,000 retirees who receive pensions from that particular retirement system.

Most of those retirees are former schoolteachers and state agency workers.

"I think we're going into an incredibly deep downturn if not a wrenching recession," Sanford said.

Sanford and other members of the Budget and Control Board, specifically Treasurer Converse Chellis, strongly disagree on details surrounding the fiscal health and management of the retirement system.

Both Sanford and Chellis have accused the other of being disingenuous with the facts.

The governor also believes strongly that the Budget and Control Board should be dissolved and replaced by a Department of Administration to make South Carolina government more efficient.

The board is a one-of-a-kind entity that splits is power among board members: the governor, the Legislature's top two budget writers, the comptroller general and state treasurer.

"We can continue to discuss this matter until we are blue in the face," Chellis said in a statement. "But the fact of the matter is that we are on the right track in regards to securing and strengthening our state's retirement system."

Reach Yvonne Wenger at 803-799-9051 or ywenger@postandcourier.com.