April 15, 2008 - Calculating the cost of education should include the lawsuits by a "handful of people" and their lawyers. Story
The dispute over who should pay the $1 million in court fees started with a 2005 court case.--------------------
A handful of employees enrolled in the Teacher and Employee Retention Incentive program sued the state over a law changing their benefits.
The S.C. Supreme Court expedited the case, ruling the state law changing the benefits was unconstitutional. Lawmakers, the court said, could not change the terms once the employee agreed to the TERI program.
Initially, a circuit court awarded $8 million in fees. That figure was reduced to $400,000 before the S.C. Supreme Court, on appeal, upped the final fees to $1,075,701.
TT FOUND
The TERI program FAQ (from the S.C. Budget and Control Office of Human Resources)
The program was created in 2001 as a means of retaining teachers, however, by June 2005, 14,000 state workers chose the program, which allowed them to no longer have retirement deductions taken from their paychecks and begin getting pension benefits while continuing to work.
In 2004, the Greenville News carried an article by Sen. Greg Ryberg on why the program should be abolished. The page is no longer online, but is in the Google cache.
Individuals who are eligible for TERI are all members of the SCRS with 28 years of service, and they include county and municipal employees, state employees, teachers, and many elected officials!The result was the unfunded pension liability rose 1300%.
Participants continue to receive their annual pay in addition to receiving retirement benefits that amount to about half of their annual salary (for example, TERI participants who make $50,000 annual salary will receive an additional $27,000 per year in retirement salary for a total pay of $77,000 per year).
The TERI participant permanently discontinues his 6 percent contribution to the retirement system, while the state continues to contribute to the employee's retirement fund. When the employee retires, at the end of the five-year TERI program, the employee collects his full retirement.
A bill was introduced to eliminate the program. Later SB 619 was approved that meant that an employee who enters the TERI program after June 6, 2005, is exempt from the State Employee Grievance Procedure Act and Employees beginning participation in the TERI program after June 30, 2005 will not receive payment for unused annual leave upon retirement and entering the TERI program and they will have to continue to contribute(6.25%) to the retirement fund. FAQ (from the S.C. Budget and Control Office of Human Resources.)
That latter was the basic dispute contention that they hoped would derail the whole reform.
Background story on effect of the change in law and the lawyers involved. SC Supreme Court decision. 26146 - Layman v. State of South Carolina The state refunded employee contributions to those enrolled in the program prior to July 1, 2005 who made contributions to the program. The Supreme Court later amended Laymen v. State of South Carolina to address, among other things, attorney fees.
THE ISSUE NOW is who will pay the attorney fees. The state budget committee determined that the S.C. Judicial Department would have to pay the lion’s share of the more than $1 million in attorney fees stemming from a lawsuit over retirement benefits. The House, Senate and Governor each would pay $175,000 of the $1,075,701 verdict; the Judicial Department, which last year had its request for $1.9 million to add six new judges denied by state lawmakers, would pay the rest.
It's a delicious irony, isn't it?
