South Carolina’s state treasurer, Curtis Loftis Jr., recalls meetings with Wall Street types at the Provocateur nightclub in Manhattan and a dinner with a centerfold model as bankers sought to lure state money into risky investments with hedge funds and private-equity funds.

Loftis, a Republican who took office in January 2011 and is the only elected official on the state fund’s six-member investment commission, has decided to stop writing checks for most ``alternative investments,’’ as the hedge- and equity-fund investments are known, according to the New York Times.

South Carolina’s pension fund, like others across the country, faces a shortfall – an estimated $14.4 billion. It’s among states and localities grappling with how to manage under-funded pensions, a point highlighted last week by the failed recall election of Gov. Scott Walker of Wisconsin.

In California, the pension issue appears set to trigger a battle within the Democratic Party over how and how fast to revamp the pension system, according to a Reuters report. San Jose, the liberal capital of Silicon Valley, voted last week to force employees like firefighters to pay more for retirement or face cuts in benefits.

Governor Jerry Brown, a Democrat, said the vote was a sign the state was ready to move on his 12-point plan to narrow the pension shortfall, according to Reuters.

"The pension vote in San Jose, which is a more liberal city than the state as a whole, is a very powerful signal that pension reform is an imperative,’’ Brown said in a San Francisco Chronicle video interview.

In South Carolina’s capital Columbia, Loftis says he is focused on how pension funds interact with Wall Street, not on the state governorship, according to the New York Times. He says he wants more information about the fees that hedge funds and private equity funds charge, and where they put the money they receive from the state and employees.

Financier Robert Borden, in the six years he served as investment chief for South Carolina’s giant public pension fund, placed about $13 billion, nearly half the total and a higher share than almost any other state, into private-equity or hedge-fund plays.

While Borden was running the fund, fees to fund managers rose to $344 million last year from $22 million in 2005, and the investment returns themselves have proven lackluster at best, the Times said.

South Carolina’s $24.5 billion public pension system earned 3.1 percent, annualized and before fees, in the three years through last June, versus 4.6 percent for all public pension funds tracked by Wilshire Trust Universe Comparison Service.

By the end of 2011, retirement systems with at least $1 billion in assets had raised their positions in real estate, private equity and hedge funds to 18.3 percent from 10.7 percent in 2007, according to the Wilshire TUCS.

Borden, who resigned in December to join a private equity fund, says that if pension funds want higher returns, they have to play in the secretive world of private equity and hedge funds, according to the Times. ``Every one wants their cake and to eat it too,’’ he says.