End of state incentive program may cause thousands to retire

June 25, 2017 - 5:28 pm
Categories: 

COLUMBIA, S.C. (AP) — South Carolina could lose about 7,500 public workers when an incentive program that keeps employees on the job past their normal retirement ends next year.

The State newspaper of Columbia reports Sunday that about half of those employees work in public schools, and their exodus would exacerbate the state's teacher shortage.

A 2012 law meant to shore up the state's pension system for public workers phased out the Teacher Employee Retirement Incentive program, better known as TERI. It officially closes June 30, 2018.

Under TERI, retirees can work up to five years after they officially retire, while accumulating pension benefits. Their money is paid in a lump sum at the end of the program.

The Legislature initially created the program in 2000 to entice teachers to stay in the classroom, but court decisions expanded it to other public workers. That law alone, which also allowed workers to retire with full benefits after 28 years, accounts for nearly $2 billion of a pension debt that's grown to more than $20 billion, according to the state's benefits agency.

The projected debt represents the state investment portfolio's current worth compared with benefits likely owed to all 550,000 people in the system over their lifetimes. Other changes in the 2012 law affected how long newly hired employees must work for full benefits and how those benefits are calculated. Legislators passed another pension-shoring law earlier this year that increased contributions. They say more reforms are coming.

Public workers who have officially retired can keep working after TERI ends. But The State reports few will likely do so. That's because the 2012 law suspends their retirement benefits once their paychecks tally $10,000 for the year. Their pension benefits wouldn't resume until the next year, when the process would begin again.

Nearly 6,500 teachers didn't return to the classroom last school year, according to an annual report by the state's Center for Educator Recruitment, Retention and Advancement.

The salary limit for working retirees and the end of the TERI program is "only magnifying what's already a critical situation," said Pamela Arrington, chief human resources officer for the Newberry County School District. "We're all going to be looking for more people than we've been looking at before."

The end of TERI could also hurt state departments such as Corrections, Juvenile Justice and Social Services that also struggle to recruit and retain employees, partly due to difficult working conditions and low pay, The State reports.

___

Information from: The State, http://www.thestate.com

AP Editorial Categories: 
Comments ()