South Carolina Closes Financial Year with Surplus Despite Growing Pension System Debt

Recently, South Carolina closed the financial year with more money than expected. According to their annual financial report, although the state has made some progress in financing its state agencies, it still has more bills to pay than cash to cover them.The budget for pension systems had significantly grown due to years of underfunding. As reported by the Greenville News, the size of SC’s pension system bills was more than twice the size of their budget. Fortunately, reports from SC Public Benefit Employee Authority illustrate that there has been a 5% improvement in financing for both retirement and disability systems. However, due to past mistakes, this backlog of debts keeps growing with interest piling up on top of these unpaid bills. On the other hand, South Carolina’s improved funding for its state agencies has allowed them to remain afloat despite their mounting expenses and accumulating interest rates.

Summary

• South Carolina ended the last fiscal year with a plethora of funds and an annual financial report that shows that though the state’s improved its financing of key state agencies, it still has more bills to pay than cash to pay for them.
• Earlier this year, the Greenville News reported that SC was battling bills from the state’s pensions systems that were more than twice the size of its annual budget.
• Latest financial statements from the SC Public Benefit Employee Authority, the agency that oversees pension funds, showed the state had improved its financing for its retirement systems by 5%.

What is the amount of interest that SC has accumulated on its pension bills since past underfinancing?

The amount of interest that SC has accumulated on its pension bills since past underfinancing is significant.

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Picture source: Leonel Heisenberg