Moody’s: Pension reform is “credit positive” for S.C.
July 11, 2012
COLUMBIA, SC – July 11, 2012 – Pension reform legislation signed intolaw last month by Governor Nikki Haley has had an immediate positiveimpact on South Carolina’s fiscal condition, according to analysis fromMoody’s, one of the country’s three primary credit ratings agencies. Thenew law reduces the state’s unfunded liability by $2 billion in yearone and completely eliminates it over the next 30 years.
“Ourpension system’s unfunded liability had grown $10 billion over the lastdecade, and it threatened our long term fiscal health and stability. Intalking to credit rating agencies about how to best protect the creditof South Carolina, they repeatedly insisted that the most importantaction we could take was to reduce those unfunded liabilities,” Gov.Haley said.
“We did just that this year, and as we can see, it’salready paying off. By doing things like getting rid of the TERIprogram, closing the separate, privileged retirement system forlegislators, and cutting the taxpayer dollars going to pay for theretirement of state employees, we have established a solid foundationfor the state’s two largest retirement systems, and for South Carolinaas a whole. This is great news.”
Moody’s Weekly Credit Outlookfor July 9, 2012, reports, “South Carolina’s $2 billion pensionliability reduction is credit positive for state and localgovernments…Last Tuesday, actuaries for the state of South Carolina (Aaastable) determined that recently enacted public pension reformlegislation reduces the South Carolina Retirement System’s (SCRS)current unfunded liability to $12.4 billion from $14.4 billion, a creditpositive for the state and for local governments that participate inSCRS…the law will reverse liability growth and reduce state and localgovernment contributions requirement over time.”
Moody’s Weekly Credit Outlook (PDF)
