Put Unused Pension Plan Dollars to Work for South Carolina Employees
This column by Palmetto Promise board member Barry Wynn was originally published in FitsNews.
For more than three decades, I’ve worked at the intersection of investment management, retirement planning, and sound public policy — helping families plan for their futures and advising institutions on how to safeguard the assets entrusted to them. As former Chairman of the South Carolina Republican Party, a longtime community leader, and President of Colonial Trust Company, I’ve seen firsthand how financial pressures—from rising healthcare costs to outdated federal regulations — affect both employers and working families here in the Palmetto State.
In that work, one thing has become increasingly clear: Congress has an opportunity right now to deliver immediate relief to workers without raising taxes, cutting benefits, or creating new spending. Lawmakers should move quickly to pass the Strengthening Benefits Plan Act of 2025.
Across the nation, billions of dollars sit idle in overfunded retiree health accounts tied to pension plans. These 401(h) accounts were responsibly funded decades ago by businesses committed to supporting their retirees’ health coverage. Today, many of these plans are funded far beyond what is actuarially necessary — some exceeding 150% or even 175%. Yet outdated federal rules prevent employers from using these surplus dollars to help current workers who are facing higher premiums, steeper deductibles, and growing out-of-pocket healthcare costs.
This isn’t fiscal prudence — it’s federal red tape that stops companies from supporting the very people who keep our economy strong.
Senator Tim Scott’s Strengthening Benefits Plan Act corrects this problem by allowing employers — under rigorous safeguards — to use a portion of excess pension assets to enhance employee health benefits. These funds could help reduce premiums, cover deductibles, or expand coverage options, giving workers near-term financial relief. There is no cost to taxpayers, no reduction in retiree protections, and no weakening of pension guarantees. It simply unlocks dollars that employers have already set aside.
This is exactly the kind of pro-worker, pro-growth, fiscally conservative solution that South Carolina has long championed.
The proposal also strengthens federal revenues without raising taxes. Because original pension contributions were already deducted years ago, using surplus assets for current employees means companies forgo taking new deductions. Workers benefit, employers gain flexibility, and taxpayers save. That’s why respected watchdogs like the National Taxpayers Union and Americans for Tax Reform support the measure.
Equally important, the bill includes extensive protections to ensure pension security and employee fairness. Plans must be well above full funding thresholds before any transfer is permitted, ensuring retirees remain fully protected. Employers cannot manipulate formulas or create artificial surpluses. All transferred funds must stay in trust and can only be used for legitimate health and retirement benefits—not executive compensation or unrelated corporate spending. And benefits funded through these dollars must be fully vested for employees.
For South Carolina, the timing is ideal. Our state continues to draw families and businesses from around the nation because of our strong economic climate and conservative governance. But those families are feeling the squeeze of rising health costs. When employers are allowed to reinvest excess pension dollars into employee benefits, workers feel the impact immediately—often through lower premiums and reduced out-of-pocket expenses.
Business leaders regularly tell me they want to offer competitive benefits to attract and retain talent, but healthcare inflation makes that increasingly difficult. This legislation gives them a practical, responsible tool to support their workforce using resources already available.
South Carolina has long demonstrated that smart, conservative reforms can strengthen our economy and improve life for working families. The Strengthening Benefits Plan Act does just that: it cuts unnecessary red tape, empowers employers, and delivers direct, tangible benefits to workers.
Congress should seize this opportunity. Let’s put these unused pension plan dollars to work for the people who earned them.
