I just wanted to write and invite you to a roundtable discussion we’re hosting later this week. On the agenda is one of the most serious problems faced by all South Carolinians in the coming years – the state retirement system’s $12 billion unfunded liability. Add to this the roughly $10 billion in health care-related liabilities, and you as South Carolina taxpayers, as well as your children, are on the hook for more than $21 billion in promises made but not paid for.
Simply put, our state’s Retirement System is headed for disaster unless we take some fairly dramatic steps to make it financially sustainable. Like Social Security at the federal level – which is already paying out more than it’s taking in, and indeed may be completely insolvent in 25 years – our state has over the last decade stacked up about a billion dollars per year in unpaid-for political promises.
Just a decade ago, our state pension plan was basically sound and the system was almost fully funded. As it now stands, we’re $12 billion in the hole and funded at less than 70 percent, with some experts arguing that the state won’t be able to pay out full benefits to state retirees in less than a decade. A finance expert from Northwestern University has even argued that a more accurate total for South Carolina’s unfunded liabilities is not $21 billion, but perhaps twice that or more. In fact, a recent Pew Charitable Trust study ranked our retirement system the 11th worst-funded pension plan in the nation. As the Post and Courier pointed out recently, it’s even more troubling to “learn that South Carolina’s risk ranks well ahead of California when the size of its unfunded liability is compared to its annual revenue.” You can read more by clicking here.
Put bluntly, we can’t continue to gloss over this very real issue. That’s why this week’s Retirement System Roundtable is so important – as we will both explore the numbers behind the numbers, and jumpstart a necessary and frank conversation going into next legislative session and the next administration.
The Retirement System Roundtable will be held at 10:00 a.m. this Wednesday, October 20, 2010, in Room 252 of the Edgar Brown Building on the Statehouse grounds in Columbia. As a fellow taxpayer, I’d urge you to come and be part of the discussion. If you can’t come, I’d ask that you call your representatives in Columbia and ask them what they’re doing to avoid what could well become a fiscal nightmare for South Carolina.
As always, thanks for staying engaged, and take care.