City of Charleston investment plan ruled unconstitutional

The state Supreme Court says a trust fund set up to help South Carolina cities and towns cover future retiree benefits is unconstitutional because it invested money in stocks of publicly traded companies. The ruling Monday says Charleston invested in an illegal trust in an effort to get around a constitutional prohibition on investing in corporate stock. The state retirement system is allowed to invest in stocks, but the court says there's no exception for local governments. Charleston and other municipalities have used a Municipal Association of South Carolina trust as they try to comply with new federal accounting rules requiring them to set aside cash for future health benefits and other retiree perks. The association says the fund had $7 million with 11 investors that included Charleston and other cities.

--Associated Press