Politics instead of pension reform in South Carolina
The South Carolina is poised to remove the State Treasurer from the Retirement System Investment Commission. The legislature created a Joint Committee On Pension Systems Review, and one of the Committee’s recommendations is squarely aimed at Treasurer Curtis Loftis, a Republican and reformer. The Investment Commission sets investment policy and makes investment on behalf of the South Carolina Retirement System.
Several years ago I wrote a series of posts about the sorry state of the South Carolina’s pension investments, and the singular efforts of Treasurer Loftis to identify and fix the problems. Under pressure from the Treasurer, South Carolina has made great strides in restructuring the portfolio and making proper disclosures. For his efforts, the Treasurer’s fellow Republicans are trying to strip Mr. him of his seat on the Commission. Under the Joint Committee’s proposal, the Treasurer would be able to appoint someone to the Commission. The Joint Committee has also proposed stripping the Treasurer of the power to hire a custodian for the pension’s assets.,
Instead of attacking Treasurer Loftis, the South Carolina legislature should make the State Treasurer, chairmen of the Investment Commission. A statewide elected official should have direct oversight over the critical investment decisions made by the Investment Commission on behalf of the state’s public pension. Mr. Loftis seems highly qualified for this role.
South Carolina Investment Commission Airs Some Dirty Laundry
Write of Mandamus: The SC Commission Sues the Treasurer
The Ongoing Saga of the SC Retirement System
South Carolina Retirement System: At It Again
 Treasurer Loftis was involved in a controversy with the South Carolina Ethics Commission over the hiring of a lawyer to help negotiate a settlement with South Carolina’s custodian, Bank of New York. As it turned out the lawyer was a friend of the Treasurer, and the relationship was not properly disclosed. The Ethics Commission found this failure to be an ethical violation.
 The ethical violation aside, I have some sympathy for this proposal. The awarding of the pension’s custody should probably be subject to some type of broader review by the Investment Commission. However, day-to-day oversight of the pension’s custody relationship should remain under the Treasurer’s aegis.