SC gov unable to cut retirement fund return rate

COLUMBIA, S.C. - Republican Gov. Mark Sanford lost a bid to lower expectations for investment returns on South Carolina's retirement funds that they saw as a threat to annual inflation increases in pension funds.

The average rate of return is now set at 8 percent and Sanford wanted the figure reduced to 7.25 percent, saying that investment returns over a 100-year period really are closer to 5.3 percent.

"I think this is going to meet with disastrous consequences," Sanford said before the Budget and Control Board he chairs rejected his effort with a 4-1 vote. "I think we're going to go into an incredibly steep downturn. If not a wrenching recession, then the possibility of a depression."

Sanford said missing the targets will lead to tax increases and could cut into retiree pension increases.

Sam Griswold, president of the State Retirees Association of South Carolina, said those increases aren't granted when the state doesn't meet targets. Even with the market's downturn, Griswold said, returns are close to meeting what was expected.

"We've got nothing against retirees," Sanford said. "Now we're just basing our numbers on totally make-believe numbers. There is no way that these numbers will prove out in the long run."

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