The Washington Post writes that it's time for Governor Martin O'Malley and lawmakers to take a hard look at Maryland's underfunded pension system. On Monday, a state commission recommended reducing benefits for new employees and raising the vesting period from 5 to 10 years. In Maryland the county governments set the level of benefits for teachers and the state funds the system. This has led counties to promise large benefits while passing the bill to Annapolis, something the commission says needs to change. However, recent legislation to split the costs 50-50 failed due to opposition from Montgomery and Howard counties.
The Post calls the Commission's reforms moderate, "and if anything, too modest." Given a decade of under-contributions and an unfunded liability of $18 billion in the pension system (based on an assumed rate of return of 7.75 percent) plus a further $15 billion obligation for health care benefits means Maryland can't afford to hesitate.
The Post calls the Commission's reforms moderate, "and if anything, too modest." Given a decade of under-contributions and an unfunded liability of $18 billion in the pension system (based on an assumed rate of return of 7.75 percent) plus a further $15 billion obligation for health care benefits means Maryland can't afford to hesitate.
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