South Carolina Electric & Gas has its hand out. Again.
This time it wants to raise power rates by an annual average of $9.96 per household so that its employees’ pension plans will continue to grow.
Actually, in 2012 the S.C. Public Service Commission said SCE&G could charge extra money to cover shortfalls in its pension plan.
The commission needs to reconsider that decision. It is difficult to justify to the majority of ratepayers whose employers no longer offer pension plans.
According to Pension Retirement Newsletter, companies from coast to coast “have been busy changing their plans to escape the mounting retirement benefit payments.”
It says that only 17 percent of the largest companies in the U.S. still have pension plans — and most of them are phasing them out.
It’s even more difficult to sell to SCE&G customers who know how much money its top executives make — and how big their pensions are.
Last year, CEO K.B. Marsh was paid more than $5.7 million in salary, stock, pension fund contribution and other compensation. His pension grew by $251,586.
Vice President and CFO J.E. Addison was paid $2.4 million. His pension fund increase was $102,816.
Most businesses are opting for 401(k) retirement plans, which allow workers to save and invest a piece of their paycheck before taxes are taken out. Taxes aren’t paid until the money is withdrawn from the account.
The Public Service Commission should require SCE&G to justify why ratepayers should shoulder the growing cost of its pension plan, instead of switching to a 401(k) model.
Phasing out the pension plan for state employees is due the same scrutiny, particularly considering its perennial unfunded liability. A state audit says that figure is $11 billion.
Most South Carolina residents have enough to do just to pay their own bills. And that includes putting money aside for their own retirements, which infrequently include a company pension.