Retirees who returned to work for the state or local governments are not eligible to recoup tens of millions they paid into the state retirement system, according to a 4-1 South Carolina Supreme Court decision released Monday.
The decision settles a series of lawsuits that followed a 2005 Legislative change requiring working retirees and those enrolled in the Teachers and Employee Retention Incentive, or TERI, to begin paying a portion of their paycheck — at the time 6.25 percent — to shore up system finances.
The court ruled in 2006 that the change broke a contract with those in the TERI program and ordered a $37.8 million refund to about 14,000 workers.
Monday, the court ruled that working retirees — who did not submit the paperwork to enroll in the TERI program — had no similar contract with the state. About 9,000 people participated in the working retirees program at the time. Cam Lewis, attorney for the working retirees, estimated the decision means those workers will lose at least $25 million they had paid into the retirement system.
“Because there was no guarantee of re-hire, and because these retirees were under no obligation to return to work after retirement,” the court majority said in the decision, authored by Chief Justice Jean Toal, “we view the language of the Working Retiree statutes as providing a mere option to retirees, rather than an offer. Additionally, the TERI statute specifically provided in its text that ‘a program participant makes no further employee contributions into the system.’”