Let’s be real. Nobody actually wants to spend their Saturday afternoon reading a 100-page handbook from the South Carolina State Retirement System. It’s dense. It’s full of acronyms like SCRS, PORS, and PEBA that sound more like dorky undercover agencies than your ticket to a beach house in Pawleys Island. But if you’re a teacher, a police officer, or a state employee in the Palmetto State, this system is basically the biggest financial asset you own.
Most folks just see a deduction on their paycheck and figure it’ll all work out. That’s a mistake.
The South Carolina Public Employee Benefit Authority (PEBA) manages the money, and honestly, the rules have changed so much over the last decade that what your retired coworker told you might be totally wrong now. There is a massive divide between "Class Two" and "Class Three" members. If you started after July 1, 2012, the game is different. You have to work longer. Your "high five" average salary matters more than the old "high three."
It’s not just a savings account. It’s a defined benefit plan. That means the state is promising you a specific monthly check for the rest of your life, regardless of whether the stock market decides to tank the year you retire. That’s a huge deal.
Why the South Carolina State Retirement System is basically a math problem
At its heart, the SCRS (the main plan most people are in) is a formula. It’s not magic. It’s your years of service multiplied by 1.82% of your average final compensation. Simple, right? Not really.
If you’ve got 30 years in and your average salary was $50,000, you aren’t getting $50,000. You’re getting about $27,300 a year. For some, that’s a wake-up call. You’ve gotta realize that the pension is meant to be one leg of a "three-legged stool," with the other two being Social Security and your own personal savings like a 401(k) or 457b. Relying solely on the state pension is a risky move that leads to a lot of "Golden Years" stress.
Then there is the contribution rate. It’s gone up. Employees are now chipping in 9% of their gross pay. That’s a chunky bit of your check.
The Class Two vs. Class Three Divide
This is where the confusion usually starts. If you were hired before July 1, 2012, you are Class Two. You’re the "lucky" ones in the eyes of the newer hires. You can retire with 28 years of service or at age 65. Your "Average Final Compensation" is based on your three highest-paid consecutive years.
Class Three members? You’re looking at a different horizon.
For Class Three, you need 30 years of service. Or you have to wait until you’re 65. Your average salary calculation is stretched over five years instead of three. It sounds minor, but stretching that average usually lowers the final number because it pulls in years when you were making less money. It’s a cost-saving measure for the state, but a bit of a bummer for the employee.
The TERI Program is dead, so stop asking about it
I still hear people talking about the Teacher and Employee Retention Incentive (TERI) program. Look, it’s gone. It ended effective June 30, 2018.
Back in the day, TERI let you "retire" on paper, keep working for five years, and have your pension checks accumulate in a side account while you still drew a salary. It was a sweet deal. It also caused some political headaches and funding concerns. Nowadays, if you want to work after retiring from the South Carolina State Retirement System, you’re dealing with the "earnings limitation."
If you retire and then return to work for a covered employer, you’re generally capped at earning $10,000 a year unless you wait a full 12 months or meet very specific exceptions (like some school bus drivers or certain legislative roles). If you go over that cap, PEBA will literally stop your pension checks. They don't mess around with that rule.
Buying back "Time" might be your smartest move
Did you work in another state? Were you in the military? Did you have a stint at a different public agency? You can often "buy back" that time to add to your South Carolina service credit.
But here’s the kicker: it’s expensive.
The cost to buy service is usually based on an actuarial calculation of how much that extra time will increase the value of your future lifetime benefit. For some, it costs $20,000 to buy two years of credit. Is it worth it? Maybe. If buying those two years lets you retire two years earlier and start drawing a $3,000 monthly check immediately, the "payback period" on that $20,000 is less than seven months.
You’ve got to run the numbers. Don't wait until the month before you retire to ask for a service purchase quote. The closer you are to retirement, the more expensive the time usually gets because the state knows they’ll have to start paying you sooner.
The State ORP: The Road Not Taken
When you first get hired, you have a 30-day window to make a choice that lasts forever. You can join the SCRS (the pension) or the State Optional Retirement Program (State ORP).
The State ORP is basically a 401(k). You put money in, the employer puts money in, and you manage it through vendors like Voya or TIAA. If the market goes up 20%, you're winning. If the market crashes 40% the year you want to quit, you’re in trouble.
Most people stick with the pension because humans crave security. But for people who know they’re only going to stay in South Carolina for five or six years, the ORP is often better because it’s portable. You can take your contributions and the employer's portion with you. With the SCRS pension, if you leave before you're "vested" (8 years for Class Three), you only get your own money back plus a tiny bit of interest. You lose the employer's contribution entirely.
Survivorship Options: Don't leave your spouse hanging
When you finally fill out those retirement papers, you have to pick an option.
- Option A: Maximum benefit. You get the most money possible, but when you die, the checks stop. Period.
- Option B: 100% - 100% Joint Survivor. You take a smaller check, but when you die, your beneficiary keeps getting the exact same amount for the rest of their life.
- Option C: 100% - 50% Joint Survivor. A middle-of-the-road cut to your check, and your beneficiary gets half your amount later.
If you’re married, you actually have to get your spouse to sign off if you don't pick a survivor option. The state wants to make sure people aren't accidentally leaving their widows or widowers with zero income. Choosing Option B can sometimes drop your monthly check by $200 or $300, which feels like a lot now, but it’s basically a life insurance policy that never expires.
Is the system actually stable?
People love to worry about pension funds going bankrupt. You'll hear talk in the State House about "unfunded liabilities."
Yes, the South Carolina State Retirement System has a gap between what it owes and what it has in the bank. It's roughly 20-30 billion dollars depending on the year and the accounting method. But the state has been aggressive lately about fixing this. They’ve raised employer and employee contribution rates. They’ve adjusted the assumed rate of return.
Is it going broke tomorrow? No. Is it under pressure? Absolutely.
💡 You might also like: Social Security Is Increasing Benefits for Millions of Americans: What Really Happens in 2026
The "Investment Commission" (RSIC) manages the actual stocks, bonds, and private equity. They’ve been aiming for a 7% return. Some years they crush it; some years are lean. But the South Carolina constitution and state law provide significant protections for these benefits. Once you’ve earned them, they are very hard to take away.
The Cost of Living Adjustment (COLA) trap
Here is the part that kind of sucks: the COLA.
In many states, your pension goes up automatically with inflation. In South Carolina, for the SCRS, the COLA is capped at 1% or $500, whichever is less. That’s it. In years where inflation is hitting 5% or 8%, your purchasing power is actually shrinking while you're retired.
This is why that "third leg of the stool" (your own savings) is so critical. You need a source of income that can actually grow to offset the fact that your state pension is mostly fixed. If you're counting on that state check to buy the same amount of groceries in 2045 as it does in 2025, you're going to be disappointed.
What you should do right now
Stop guessing.
First, log into Member Access on the PEBA website. It’s the only way to see your actual "Service Credit." Sometimes things get missed—a year of teaching in 1994 might not be recorded correctly. Fixing that now is a million times easier than trying to track down old payroll records from a defunct school district twenty years from now.
Second, use the retirement estimator tool. Plug in different ages. See what happens if you work until 62 versus 65. The difference is often staggering. Sometimes, working just one extra year can boost your monthly check by hundreds of dollars because you're increasing both your service years and your average salary simultaneously.
Third, look at your "Beneficiary" designations. People forget these. I've seen cases where an ex-spouse from 1988 is still listed as the beneficiary of a $200,000 retirement account because the employee never updated their paperwork. Don't be that person.
Actionable Steps for SC State Employees
- Download your Member Statement: Do this annually to verify your reported earnings.
- Audit your "Service Purchase" options: Request a formal quote for any military or out-of-state time before the price increases.
- Calculate your "Gap": Use the PEBA estimator to find your projected monthly income, then subtract that from your current expenses to see how much you need to save independently.
- Update your Beneficiaries: Ensure your primary and contingent beneficiaries align with your current life situation (marriage, children, etc.).
- Consult a Tax Pro: Remember that most of your pension is taxable income at both the federal and state level in South Carolina, though there are specific state tax deductions for retirees over age 65.