Update – October 14 to October 25, 2010

The House of Representatives has adjourned for the 2010 session. I hope that you find this update helpful and informative:

State Retirement System Basics: The S.C. Retirement System has five defined benefit plans. Membership consists of 232,000 active members and 118,000 retired members. Over $2 Billion is disbursed annually within the system. A number of employers participate in the System including State Government; public school districts; higher education institutions; local governments; and quasi-governmental organizations like Santee Cooper. The trust funds of the System are separate from the State General Fund, but if the state is called upon to make up a deficiency and fulfill its commitments to retirees, then the demand will fall upon the general fund and the state’s taxpayers.

State Retirement System Roundtable Discussion: Last week, I attended a Roundtable discussion on the State Retirement System in Columbia. Attendees received a report from the Director of the State Retirement System (available here); the Director of the State Retirement Systems Investment Commission (available here); and a national pension fund expert from the Northwestern University School of Business (available here). There was a spirited debate as to the extent of the unfunded liabilities in the state pension system. The System’s Director said that the unfunded liability is approximately $11 Billion and that the real issue that has to be dealt with in our state is the expense of cost of living adjustments in the retirement plan. On the other hand, the professor from Northwestern stated that the unfunded liabilities exceed $53 Billion. The State’s investment director said that 3% of the state’s investment portfolio is paid out in benefits each year and that it is probably unrealistic to expect an 8% annualized return on investments. Other attendees noted that the top 100 private pension funds in the U.S. have an annualized rate of return of 6.36%. There is resistance to moving from a defined benefit plan like we have now for most retirees and current state employees to a defined contribution plan for most, if not all, new hires. Other ways to address the problem include, but are not limited to, increasing the number of years of service necessary for retirement; increasing the number of years used to calculate a member’s average final compensation; and eliminating the use of sick leave, annual leave, and overtime pay in the calculation of a member’s average final compensation.

State Retirement System — Research Reports: In my research on the South Carolina Retirement System, I found some interesting past reports. First, the Strom Thurmond Institute at Clemson study from 1997 predicted that the unfunded liabilities by 2010 would exceed $6 Billion. That report can be seen by clicking here. Second, the GEAR Report from 2007 in state government recommended four measures to be implemented to address the unfunded liabilities in the system. The retirement system portion of that report can be accessed by clicking here. Finally, the National Association of State Retirement Administrators recently produced a position paper to critique the analysis provided by the Northwestern University professor who spoke at last week’s Roundtable discussion. That can be seen here.

My Observations on State Retirement System Issues: As you can see from the above, there are substantial differences in opinion as to (1) the extent of the problem here in South Carolina and (2) the solutions to the problem. It is important to note that South Carolina is not alone: Many other state and local governments are facing the same issues. It is critical that we recognize that, for the long term, this is a significant problem that those in my generation in our state will have to face. Now is the time to identify the problems; to discuss the issues; and to craft solutions. I am not convinced that we do not have a problem which does not deserve attention. The Thurmond Institute Report from 1997 predicted a shortfall of $6.28 Billion in the System by 2010. Last week’s Roundtable presentations show that the shortfall is at least $11 Billion despite changes that were made by the legislature in 2005 and 2008. Hence, I am studying available information; listening to concerned citizens; and working on ways with other elected officials to address these problems for the long term. If you have any input that you would like for me to consider, please let me know.

State Constitutional Amendments on Election Ballot on Election Day: Next week, on November 2, four constitutional amendments will be considered by all of those voting in South Carolina. For a look at what those amendments are, please click here: http://www.scvotes.org/2010/07/27/2010_constitutional_amendment_questions

Legislative Scorecards: Some groups have issued their legislative scorecards in recent weeks. For example, I received an “A” from the National Rifle Association (NRA) and a “100” from the Palmetto Family Alliance which advocates for pro-family issues at the State House. The Alliance works to promote, protect, and preserve family values. A copy of the Alliance’s report can be accessed by clicking here.

Aiken County Public Library: Check out the new digital branch library available through the Aiken County Public Library website (www.abbe-lib.org). This new service, powered by OverDrive, is free to Aiken Library patrons with a valid library card and password. You can browse the collection for audio books, eBooks and videos. You can also download the titles to PC, Mac, iPod, Sony Reader and many other mobile devices to enjoy immediately. Some audio titles can even be burned to CD to listen to on-the-go. At the end of the lending period, the titles automatically expire. The Library is able to offer this new service thanks to a federal Library Services and Technology grant, administered by the South Carolina State Library. NOTE: To get started, patrons need to download free OverDrive Media Console® and Adobe Digital Editions® software, which are available on the digital branch library’s website. You can also receive library e-news in your e-mail with another new service. Choose the types of information you want to keep up-to-date with library events, kid’s activities, or new materials available for borrowing. Visit www.abbe-lib.org/abbeinfo for more information or to subscribe now. For more information, call the Library at 642-2020.

Planning for the 2011 Legislative Session: The 2011 legislative session will convene on the second Tuesday in January. I am seeking input from constituents on the critical issues facing our state and area including tax reform; spending reform; K-12 education; the costs of higher education; health care; immigration; economic development; job growth; and the unfunded liabilities in our state’s retirement systems. Your input is welcome on any issue important to you. Please email me back or contact me by phone or in person at your convenience.

Speaking In Schools: Earlier this month, I was invited to speak to the 3rd grade students at East Aiken Elementary School. While there, I provided each of them a copy of the South Carolina symbols and emblems booklet. If you would like for me to speak with students in a local school, please let me know.
Speaking to Groups Around the District: Several local groups have asked me to attend one of their meetings to provide an end of session report to their members. If you have a group that would like for me to come to a meeting during the next few months, please let me know. Recently, I spoke to the Aiken Sertoma Club, and I am scheduled to speak with the Greater Aiken Chamber of Commerce on November 5.

Frequency of My Updates: Since the legislature is not in session, my updates will not come every Monday as they do during session. I will strive to provide an update each week. However, there may be some weeks where I combine two weeks of updates into one. The frequency will be back to every week when the legislature reconvenes in January.

Email Updates: Many people in District 81 are receiving this email update. However, there are many others who do not receive them because I do not know their email addresses. If you know of people who do not receive my updates but they would like to, please email their names and email addresses to me.

Road Issues: If you see a road problem, you can call the SCDOT at 641-7665 or Aiken County at 642-1532 to report the problem. If you do not get a prompt response, please let me know at TomYoung@schouse.gov or call me. In general terms, most paved roads in the County are maintained by SCDOT and are identified on the road- sign poles by a small black and white sign listing the road number, such as S-2-1669. On the other hand, nearly all unpaved roads in the County are maintained by the County.

Thank you for the opportunity to represent you. Please let me know if I can help you in any way or if you have questions about these or other issues. Your feedback is meaningful and appreciated.

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