PEBA – Grows government, adds bureaucracy, additional costs, constitutionally questionable
(Columbia, SC) – Today, on the final day to take up conference reports before the Sine Die session’s 5:00 pm deadline, the General Assembly approved a retirement reform conference report. After months of hard work, this plan includes major reforms that directly address the retirement fund’s $14 billion unfunded liability and solutions that will make the fund solvent.
On Wednesday, Speaker Harrell and the Conference Committee Members were asked by Governor Haley to come to her office and were instructed to accept the Senate’s PEBA as a part of the retirement bill. The Representatives objected. The Governor insisted that it be included.
House Speaker Bobby Harrell issued this statement about Retirement Reform & PEBA:
“In addition to these well thought out retirement solutions, there was an eleventh hour full court press by the Governor and the Senate to grow government by creating a brand new, and constitutionally questionable, bureaucracy called PEBA. On Wednesday, armed with a PEBA endorsement letter from the Governor, the options proposed to the House were made very clear – include PEBA or watch retirement reform die.
“While the media may be familiar with this new government agency called the Public Employee Benefit Authority (PEBA), most of our state’s citizens probably are unaware of its creation or how much money it will cost taxpayers. As just one example, it is a totally new agency with 11 members who are required to meet once a month and are paid $1,000 a month each.
“Saving our state retirement system and making its fund solvent was one of the biggest issues the General Assembly addressed this session. The system’s $14 billion unfunded liability had to be addressed this year to secure the state retirement system.
“But it is a real shame that in order for us to get this crucial reform plan passed, we were forced to take on unnecessary government growth and a newly added bureaucracy.
“Having PEBA’s non-elected members overseeing state health insurance and retirement plans not only threatens our state’s AAA Credit Rating but makes the entire retirement bill subject to being thrown out as unconstitutional by the South Carolina Supreme Court.
“The last bobtailing case brought before the court resulted in the entire bill, not just the offending sections, being thrown out as unconstitutional. With a ruling that indicated this was going to be the new standard for how our state’s Supreme Court addressed these types of cases from now on, the Governor and Senate are playing a game of constitutional Russian Roulette with our state employees’ retirement fund.
“We do sincerely hope this bill can withstand constitutional scrutiny because of how important the actual retirement reforms contained in this bill are to our state’s workers. But if it can’t, Governor Haley and the Senate certainly cannot claim that they were not thoroughly warned about this possibility ahead of time.”
# # #