Six years after SC Treasurer Curtis Loftis began complaining about the poor performance of public pension investments under the SC Retirement Systems Investment Commission, legislators in Columbia have finally heard the message.
Fixing a seriously underfunded pension system has become a priority for this legislative year, The problem is you don’t fix an approximately $25 billion shortfall overnight.
When Loftis assumed the office of SC Treasurer, he became a statutory member of the investment commission. As a statutory member of the South Carolina Retirement System Investment Commission, Loftis criticized the high fees, low performance and lack of transparency associated with South Carolina’s public pension funds.
Almost immediately, the ‘good ole boy’ system in Columbia struck back. Loftis was subjected to allegations in 2011 that he and Mallory Factor were partners in what was called a “pay to play” scheme involving state retirement funds.
Despite the best efforts of members of the SC Retirement System Investment Commission, Gov. Nikki Haley, then state senator Greg Ryberg and others, Loftis was cleared of all allegations by SLED and the SC Attorney General’s office.
A couple of years later, Loftis was censured by the same SCRSIC he serves on for “false, deceitful and misleading rhetoric.”
At the time, Loftis said the commission members didn’t like him looking under rocks and asking questions about investments made by commission staff.
Things changed last spring when the CEO of the investment commission, Michael Hitchcock, told members of a Senate committee that the returns of the state pension fund have “underperformed” in recent years. He said the approximately $16 billion shortfall in the pension fund accounts has been aggravated in recent years by the gap between the assumed rate of return set by lawmakers (7.5%) and the actual rate of return (1.6%).