State legislators never did explain why they needed to increase judges’ pay by nearly 40% last year when it was teachers, corrections officers and social workers we were having a hard time keeping on the job. They were simply determined to do it, and the cost was relatively small since it affected so few people (around $10 million in a nearly $10 billion state budget), so they just did it.
But as The Post and Courier’s David Slade reports, the cost was actually much higher, because of a special provision in state law that legislators didn’t bother to consider. That provision raises the retirement pay for current and retired judges whenever judicial pay is increased; the state Public Employee Benefit Authority now says last year’s raises added $100 million to the liabilities of the judges’ retirement plan.
Now, that’s not money the state has to pay all at once. It’s the total cost to pay the added benefits to all 213 people who are vested in the judges’ pension system; it will paid out over the next 20 or 30 years.
And the extra benefits won’t affect the solvency of the state’s five pension systems, because that special state law automatically adjusts the employer contribution upward so the system stays funded.
But the long-term cost underscores the lack of justification for the Legislature’s decision to raise the average pay for judges, solicitors and public defenders by $50,000 a year, from $140,000 to $190,000. It underscores how careless the Legislature is with too many of its decisions: Some lawmakers say they weren’t even aware of the retirement implications of the change. And it shines a spotlight on a retirement system that’s long overdue for reform.
The Judges and Solicitors Retirement System has always been incredibly generous. Whereas regular state employees draw on average 40% of their pay in retirement (and just 73% if they work 40 years), judges can receive up to 90%. And they can draw a salary and a pension at the same time. (The pension stays in a state account until they actually retire, but they’re still double-dipping.)
Lawmakers argue that we need good judges, top lawyers can make substantially more in the private sector than on the bench, and judicial pay, as judicial pay goes, isn’t particularly high in South Carolina. When you combine that with the fact that the obscenity of the Legislature’s own retirement system eclipsed the judicial system’s, it just never has gotten the attention it deserves.
The argument for such generous pensions and pay overlooks some important considerations, principally the fact that it’s a buyer’s market for judges, since people who want to be judges (and a lot of great lawyers want to be judges) can’t just move to another state and becoming a judge there. And two things have changed even the flawed assumptions: The Legislature finally agreed to phase out its retirement system, and with last year’s massive raises, S.C. judges are quite well compensated.
Unfortunately, we can’t take back the pension increase; federal pension laws make it practically impossible to rescind a benefit to people already vested in a pension system.
But just as legislators did with regular state employees, they certainly can increase judges’ contributions to their own pensions. Yes, judges pay 10% of their salaries into the pension system, but the state pays far more. Right now, for every $1 regular state employees pay toward their retirement, the state pays $1.72. But for every $1 judges pay toward their retirement, the state pays $6.29.
They also could phase out the double-dipping, just as they did when they closed the ill-considered Teacher and Employee Retention Incentive program in 2018.
And just as legislators closed their own pension system to new members eight years ago, they can close the judges’ pension system to new members, and divert new judges into the regular state retirement system.
It wouldn’t hurt for lawmakers to make all three changes. At the least, they ought to make the first one. Even though last year’s raises were over the top, there’s a legitimate reason to pay judges, solicitors and public defenders much more than the average state employee. There is no reason to contribute to their pensions at a rate nearly four times as high.