Big pay hike sought by S.C. judges also would fatten their retirement wallets

December 11, 2018

Investigative Reports

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By RICK BRUNDRETT

A little-known state law allows eligible judges in South Carolina to receive generous retirement pay for as much as a dozen years at the same time they’re collecting their regular six-figure salaries.

S.C. Supreme Court Chief Justice Donald Beatty, who heads the state Judicial Department, is now asking for a 33-percent pay hike next fiscal year for himself and other appellate and lower-court judges. His annual salary would go from $156,234 to $208,000 – what a U.S. District Court judge makes.

If the raise is approved by lawmakers, who elect state judges, the separate “retire-in-place” paychecks issued to eligible judges still on the bench – equaling 90 percent of their regular salaries – would grow by the same rate.

Two Supreme Court associate justices – John Kittredge and Kaye Hearn – last week confirmed to The Nerve that they are receiving the special retirement pay. Associate Justice John Few said he is not receiving the benefit. Beatty and Associate Justice George James did not respond to written requests for comment.

The current annual salary for Kittredge and the other three associate Supreme Court justices is $148,974. Kittredge told The Nerve he separately receives about $11,000 a month in gross retirement pay – which works out to be approximately $132,000 yearly – though he added his net monthly direct-deposit check is less than $6,000 after taxes. Hearn declined to reveal her retirement benefit.

The retirement system that covers judges and solicitors is the smallest of the state’s five pension systems, serving 213 retirees, their beneficiaries or other qualified recipients, according to the systems’ financial statement for the fiscal year that ended June 30.

But the Judges and Solicitors Retirement System (JSRS) also pays the highest average monthly benefit – $8,424 over the past 10 fiscal years – of all five systems, the fiscal 2018 Comprehensive Annual Financial Report shows. In comparison, the pension system for general employees – the largest of the five systems – paid an average monthly benefit of $1,487 over the 10-year period.

Like judges, state lawmakers also receive generous retirement benefits as a percentage of their annual pay, as The Nerve has previously reported.

Kittredge, 62, said when he started receiving the “retire-in-place” pay earlier this year, he asked state retirement officials about deferring the payments until after the mandatory retirement age of 72 for judges, but was told if he didn’t accept the benefit while continuing to work, he would “lose it forever.”

“I don’t know a single judge who in their right mind would simply say ‘no’ on a philosophical basis or whatever,” Kittredge said. “The statute mandates it; there’s no discretion. I wished the Legislature would have given some flexibility or some different options to enhance peoples’ retirement benefits at the appropriate age.”

In an email to The Nerve, Megan Lightle, spokeswoman for the state Public Employee Benefit Authority (PEBA), said eligible judges can decline the special retirement pay between ages 60 and 72 while on the bench, but would still be eligible to receive the maximum 90-percent benefit after 72. A judge reaches the maximum benefit with 32 years of credited service, which includes not only years on the bench but also “any eligible service credit purchased or transferred into the system,” she said.

Judges eligible to receive the 90-percent retirement pay but who are not yet 60 can have that amount deposited in a “Deferred Retirement Option Program” (DROP) account, and can receive a payout from that fund when they turn 60, according to the JSRS handbook.

As of July 1, 2017, 22, or nearly 14 percent, of the total 160 active members in the JSRS were either DROP or “retired-in-place” participants, according to an actuarial valuation report, though Lightle said she could not immediately provide a breakdown of the number of judges and solicitors in the system.

The Nerve in 2014 first revealed the double-dipping perk received at the time by then-Chief Justice Jean Toal and then-Associate Justice Costa Pleicones, who later became chief justice. Toal said then she was receiving about $131,000 in retirement pay; Pleicones’ amount was $125,306, according to a financial-disclosure statement he released at the time.

Legislative records show that four senators, including Sen. Hugh Leatheman, R-Florence, and the longtime chairman of the budget-writing Senate Finance Committee, added the “retire-in-place” benefit to a retirement bill on the Senate floor in June 2007 while Toal was the chief justice. Pleicones in 2014 estimated he started receiving the payments in July 2007; Toal said then she began getting her benefit in 2010.

The Supreme Court has given favorable rulings to the Legislature in recent years. In 2013, for example, the Court ruled that Leatherman’s and then-Rep. Chip Limehouse’s membership on the board of the State Transportation Infrastructure Bank, which over the years has funneled several billion dollars to large construction projects in select counties, did not violate the state constitution.

South Carolina and Virginia are the only states where their legislatures play a primary role in electing judges. The S.C Supreme Court has five members while the state Court of Appeals has nine. There are 49 circuit and 60 family court judges under state law.

Underpaid Judges?

Kittredge and Hearn told The Nerve last week they don’t believe the proposed judicial pay raises for next fiscal year should be tied to the “retire-in-place” benefit for senior judges, though Lightle, the PEBA spokeswoman, confirmed that any pay hike for judges would increase their retirement benefits by the same percentage.

Kittredge, who was first elected as a family court judge in 1991 and joined the Supreme Court in 2008 after serving as a circuit and Court of Appeals judge, said S.C. judges haven’t received an “effective” pay raise since 1996, noting pay increases over the years were offset by hikes in their retirement contributions. He also said a separate office-supply budget he receives is taxed as income, forcing him to pay for some items out-of-pocket.

Still, Kittredge said he’s “not complaining” about his pay, adding, “I made the decision as a young father and a young husband 30 years ago that I wanted to do public service, and I knew it was a trade-off that I would never get wealthy as a member of the state judiciary.”

In submitting his proposed pay hikes for judges, which would take effect next July 1, to the state Executive Budget Office, Beatty did not provide a percentage increase or a specific salary schedule, though under the proposal, his salary would be the same as a U.S. District Court judge – a 33 percent hike. Based on formulas in state law for determining judicial pay, other appellate and lower-court judges elected by the Legislature also would receive the same rate hike, The Nerve’s review found.

“There is a vast and growing gulf between the work required of members of the South Carolina judiciary and their compensation,” according to the budget proposal, which noted that circuit judges “carry some of the heaviest caseloads in the country” though their salaries “rank in the bottom third of the country.”

But judges are relatively well-paid compared to most other South Carolina workers in both the private and public sectors. The median household income in South Carolina was $49,501 in 2016, according to U.S. Census Bureau estimates. Only nine states had lower figures for that year.

Following is a list of current S.C judges’ yearly salaries, with the proposed salaries for next fiscal year in parentheses, based on The Nerve’s review:

  • Supreme Court chief justice: $156,234  ($208,000)
  • Supreme Court associate justices: $148,794  ($198,095)
  • Court of Appeals chief judge: $147,306  ($196,114)
  • Court of Appeals associate judges: $145,074  ($193,143)
  • Circuit court judges: $141,354  ($188,190)
  • Family court judges: $137,633  ($183,238)

Brundrett is the news editor of The Nerve. Contact him at 803-254-4411 or rick@thenerve.org. Follow him on Twitter @RickBrundrett. Follow The Nerve on Facebook and Twitter @thenervesc.

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