Says State Pension Fund Accounting Methods Illegal and Unconstitutional
The following is a press release from Treasurer Curtis Loftis:
Columbia, SC – State Treasurer Curtis Loftis has been saying for years the accounting system used to calculate the state pension system’s unfunded liability is reckless, unsound and deceives the public.
For years, his concerns have been ignored. Now the Attorney General’s Office has weighed in with an official opinion, requested by Loftis, concluding that the accounting system is both illegal and unconstitutional. The 13 page opinion is attached.
Signed by Solicitor General Bob Cook of the S.C. Attorney General’s Office, the opinion says the “open amortization” method used by the S.C. Public Benefits Authority violates constitutional requirements for the retirement system to operate on a “sound actuarial basis.”
Loftis says the unfunded liabilities built up by the State pension fund are now in the range of $24-40 billion dollars.
“It’s impossible to give a more precise estimate,” Loftis said, “because the funds have been so grossly mismanaged.”
Loftis urged the S.C. General Assembly to compel the Public Employee Benefit Authority to comply with state law immediately.
“I hope this independent legal opinion provided by our Attorney General’s Office will show once for all that our pension fund management system is a sham and a major scandal that threatens to bury our State in debt,” Loftis said.
For years, Loftis has pushed for the more fiscally sound “closed” amortization system that projects debt more accurately and complies with the law.
The Retirement System Investment Commission, the agency charged with administering the pension fund, is now asking the state legislature to remove Treasurer Loftis from the oversight role his office now provides.
Loftis said the Commission is attempting to take custodial authority away from the one elected official involved in monitoring the process.
“I have been a thorn in their side,” Loftis said, “I know that, but someone has to do it. And now the people who are routinely breaking the law want to get rid of the whistleblower.”
Read Attorney General opinion here: SCAG Opinion w highlights
An Additional Message From Curtis Loftis…
The SC Attorney General has released an official opinion that says the accounting system used to calculate the state pension’s unfunded liability is reckless, unsound and deceives the public. The Attorney General believes that the system may be unconstitutional and in violation of state law.
The Attorney General based his opinion on court cases and actions by the General Assembly and found the “open amortization” method used by the SC Public Benefits Authority violates constitutional requirements for the retirement system to operate on a “sound actuarial basis.”
The opinion is further evidence that efforts to remove the Treasurer, the only elected official, from the Retirement System Investment Commission and as custodian of the state’s retirement funds is misguided and not in the best interest of the taxpayers.
The people who broke the law want to get rid of the whistle-blower.
PEBA’s willful violation of state law and the State Constitution has placed our pension system and taxpayers at risk. The General Assembly must require that the pension system be in compliance with state law and the Constitution.
It is urgent that you call your Senator and your Representative today. Call and tell them that they need to keep the Treasurer on the Investment Commission and as custodian of the retirement funds.
Fixing our mismanaged pension system must be our lawmakers top priority.