COLUMBIA, S.C. (AP) - A Senate panel recommended Tuesday adding members to the board that invests South Carolina’s pension portfolio to help ease public employees’ concerns about how their retirement money’s being handled.
Senators say three years of public feuding between Treasurer Curtis Loftis and his fellow board members on the Retirement System Investment Commission have scared workers, who want assurances they’ll receive their promised pensions when they retire. Roughly 230,000 employees of state and local governments, schools, and National Guard members contribute to the state’s $27 billion investment portfolio, which provides checks to about 130,000 retirees.
“People want to know their retirement will be there when they retire,” said Sen. Joel Lourie, D-Columbia, co-chairman of a bi-partisan panel created to look into Loftis’ accusations. “Constituency groups are very alarmed at all the back and forth, all the politics and accusations. Our goal is perhaps that some of the rhetoric can be put to bed.”
After seven meetings, the panel issued a report to the Senate Finance Committee on Tuesday calling Loftis’ accusations of criminality unfounded. Senators await the results of an outside audit, expected in the coming weeks, to address Loftis’ contention that the board pays too much in fees.
But the senators agree with one of his recommendations to expand the seven-member board.
Their report says the best way to drive out fear is to restructure the board to give employees a formal seat at the decision-making table. Currently, the one member who represents retirees is elected by the commission.
Loftis believes the board’s membership needs to be more diverse and should include a retiree as well as a current state employee, said his spokesman, Alex Stroman.
Any change to the board requires legislation that has yet to be filed. How many members should sit on the revised board is undecided, said Sen. Kevin Bryant, the panel’s Republican co-chairman. But he believes the impending legislation could pass before the session ends in June.
Senators are adamant that any additional members have financial backgrounds that qualify them to make large investment decisions.
The treasurer is the only elected official on the investment panel, and the only one without a required background in finance.
Lourie said testimony in the panel’s meetings made it “very obvious to me one needs to have a very sophisticated understanding of how pension funds operate and fees are reported.”
Stroman criticized the panel’s report for reaching a “predetermined outcome that has been less about fixing retirement investments and more about taking the only elected person off the commission.”
Although the Senate Finance Committee didn’t specifically discuss that idea Tuesday, Stroman pointed to a statement by its chairman, Sen. Hugh Leatherman.
“You’re in the big boy’s territory when you’re evaluating and making investments with somebody else’s money,” said Leatherman, R-Florence. “Anyone investing retirees’ money has to have those qualifications.”
In 2012, then-Sen. Greg Ryberg tried unsuccessfully to force Loftis to appoint someone to the commission in his stead, as other lawmakers including Leatherman do. The Senate voted 34-10 to kill Ryberg’s proposed amendment. Ryberg is now the commission’s chief operating officer, hired last fall after his predecessor quit.
Bryant said he welcomes that debate again, but it’s too late in the session to happen this year.
Loftis is seeking a second term. Republican Brian Adams of Spartanburg filed Friday to challenge him in the June GOP primary.
The subcommittee’s report pointed to earlier findings by state Inspector General Patrick Maley. His report, released last July, found no criminal conduct or deceptive practices by the commission. But he wrote he’d never seen such a toxic, distrustful relationship between two organizations. Loftis had requested Maley’s investigation.
“We are very gratified that the subcommittee has confirmed the complete absence of wrongdoing as so often is charged by Mr. Loftis,” Ryberg said
Stroman said Loftis is disappointed the panel didn’t focus on the positive effects he’s had on the commission’s processes.
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