Columbia, SC (WLTX) - The South Carolina pension system sits $24 billion in the hole according to state Treasurer Curtis Loftis.
"The largest swindle in the history of South Carolina and the biggest debt we've ever had and not one person has paid a price. People ought to be outraged," Loftis said.
He said bad investments, poor planning and intentional underfunding has blown a balloon of debt into our state's pension system.
The South Carolina Public Employee Benefit Authority oversees contributions and disbursements of the funds. Loftis said the system of how they handle the debt is unconstitutional.
A recent opinion given by the Attorney General's office agrees.
"PEBA has exclusive authority over those documents and they complete those documents, they complete that methodology from which the contribution rates are all decided. Then the General Assembly funds the plan based on those contribution rates," said Loftis.
He said this affects the more than a half a million people from state to local government employees, firefighters to school teachers and the taxpayer who may eventually have to foot the bill to bring the debt down. His solution is blunt: reorganize the system and pay more money.
"Right now, every state employee pays 8.86 percent into the system. Those rates aren't sufficient. They should have been more. You wouldn't want to find out that you have been paying too little on your car payment and you find out because they come and repossess your car. That's what this is like. We have been paying too little into the system and now the debt has blown up," he said.
If this isn't fixed soon, he said lawmakers may have to make some serious changes.
"If we don't fix the pension this year. If we don't admit the true depth of the problem, the debt will grow too large. What happens then? We have to close the system to new entrants," he said.
We have reached out to PEBA. The organization released a statement Tuesday and said they do not agree with the opinion of the Attorney General's office.
"The South Carolina Public Employee Benefit Authority (PEBA) is aware of the January 10, 2017, opinion released by Solicitor General Robert Cook and disagrees with its conclusions. The opinion does not accurately reflect the funding methods used for the state’s public employee retirement plans. PEBA has and will continue to administer these plans in compliance with all statutory and constitutional requirements, as well as accounting and actuarial standards of practice. PEBA considers the funding of the state’s public employee retirement plans a high priority and is working collaboratively with the Joint Committee on Pension Systems Review, which was established by the South Carolina General Assembly to study and address the plans’ funding, and will continue to do so."