S.C. Treasurer Curtis Loftis threw more jabs Monday at the state's Retirement System Investment Commission and its chief operating officer.
Speaking at a meeting of the First Monday Republican Lunch Group on Hilton Head Island, Loftis called the commission's work "sinful" and says it "lacks a moral core."
Loftis, a Republican elected in 2010, and the commission, which manages the $27 billion retirement fund for state workers, have been at odds for the past two years. Loftis has criticized the commission, saying it made too many risky investments and overpaid hundreds of millions of dollars in fees.
The feud has devolved into name-calling and personal attacks, with each side accusing the other of using their public offices for personal gain, leading to law enforcement investigations that resulted in no charges.
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Greg Ryberg, the commission's chief operating officer and a former state senator, threw Loftis' words back at him in an email responding to The Island Packet's request for comment: "Curtis Loftis' serial abuse of state employees for his own political gain truly is sinful and lacking a moral core."
Loftis told the crowd of about 85 on Monday that the commission is corrupt and mismanaged, citing $420 million in investment-management fees paid during its most recent fiscal year. Those fees -- more than 10 times what they were in 2007 -- equal 1.57 percent of the commission's managed assets, far more than the 0.57 percent on average paid by other comparable pension funds, he said.
Other commissioners have said the fees act as an incentive to maximize earnings by the pension fund, yet the fund's earnings remain below the national average.
The fund saw a 9.3 percent annual rate of return over a span of three years, as of the fiscal year ending June 30, compared with a national median rate of 11.2 percent, Loftis said.
"We pay too much; we earn too little, and our portfolio is overly expensive and complex," Loftis said, "which puts retirees and taxpayers at risk."
Like most states, South Carolina has been under pressure to find higher returns and hit annual targets to meet obligations to teachers, police officers, firefighters and other state and local government workers.
Faced with interest rates at record lows and more workers qualifying for retirement, the pension fund turned to riskier, "alternative" investments, such as hedge funds, private equity and real estate. But as pension costs and fees grew, returns did not keep pace, Loftis said.
The pension fund has about $17 billion in unfunded liabilities, up from $348 million in 1999, with about 45 percent comprising alternative investments, compared with a national average of about 20 percent, Loftis said.
A special Senate subcommittee convened in early December to investigate the retirement system. The committee heard testimony from state Inspector General Patrick Maley, who found no evidence of criminal activity, according to The (Columbia) State newspaper. The committee reconvenes at 9 a.m. Thursday.
State Sen. Tom Davis, R-Beaufort, who attended Monday's Republican meeting, praised Loftis.
"I think Curtis Loftis represents what is exemplary about a public servant," Davis said. "He goes ahead and he asks the questions and doesn't accept the status quo. He goes in there with an inquisitive mind, and he's not afraid. ... I wish more people in Columbia were like him."
Video: S.C. Treasurer Loftis ready to fight (1:15)
S.C. Treasurer Curtis Loftis answers questions about the $27 billion retirement fund for state workers after speaking at the First Monday Republican Lunch Group on Hilton Head Island on Jan. 6, 2014
The (Columbia) State contributed to this report. Follow reporter Tom Barton at twitter.com/IPBG_Tom.
- SC treasurer pushes for pension reform during Hilton Head stop: April 2, 2012
- The (Columbia) State Newspaper: SC pension chief quits; Loftis storms out -- Oct. 11, 2013
- The (Columbia) State: SC pension system defends fees it pays -- Dec. 11, 2013
- Forbes Financial Watchdog blog: Yellow Lamborghini, Red Flags: South Carolina Pension's Reckless Gamble May Bankrupt State