COLUMBIA -- A typical state retiree will lose about half his or her cost of living adjustment next year, or about $180 for the year, under a plan the South Carolina financial oversight board adopted on Thursday.
The five-member Budget and Control Board approved a plan that reduces the state's outlook for investment returns. As a result, people drawing benefits from the state's main retirement system stand to get a 1 percent cost of living adjustment instead of the 2 percent increase under the old investment return calculation. And there will be no increase at all in the Police Officer Retirement System, said Bill Bloom, director of the South Carolina Retirement Systems.
Bloom said the typical retiree draws about $18,000 a year from the system. That means the typical retiree would see about $180 less than if the old investment rate had been kept in place.
Roger Smith, executive director of the South Carolina Education Association, said the reduction was premature and that instead, employees and employers should both pay more to support cost of living increases. "Current teachers and school employees and retirees are not asking for any additional benefits -- only for what's in current law and has been promised," Smith said. Current teachers and employees, he said have agreed to pay more to keep the system solvent.
Meanwhile, the board approved increasing the contributions that 850 employers make to the system by just under 1 percentage point. Those state, school and local employers will pay 10.6 percent of what employees are paid into to the retirement system. That money mostly comes from taxpayers.