South Carolina government employees will be paying more into their public pension fund in the fiscal year beginning July 1, 2017.
This is a result of a 3-2 vote by members of the State Fiscal Accountability Authority to approve an increase of 0.5%, the maximum allowed by state law in any one year. Voting to approve the increase were Gov. Nikki Haley, Sen. Hugh Leatherman and Rep. Brian White.
S.C. Treasurer Curtis Loftis and Comptroller General Richard Eckstrom voted against the increase.
The increase will take employee contributions from their current 8.66% earnings to a new rate of 9.16%.
In addition, the state’s taxpayers will contribute more to government workers pensions. The current employer rate of 11.66% of an employee’s salary will increase to 12.16% for state and local governments and school districts.
The increased revenue for the pension fund will be little more than a finger in the dike of future liabilities. The total of 1% increase in contributions is estimated to bring in $100 million in new revenue for the Public Employees Benefit Association.
For the fiscal year completed June 30, 2016, the actuarial firm of Gabriel Roeder Smith and Co. estimated a shortfall of $1.4 billion in unfunded liabilities just for that fiscal year.
The overall future unfunded liability for the state employee pension fund is estimated at approximately $25 billion.