Maryland's pension problem isn't state workers' fault
Regarding the Dec. 22 editorial “Pension tension”:
No one disputes that a pension liability exists in Maryland. Where the editorial flew in the face of facts was in its characterization of this problem and how to resolve it.
First, the pension problem was created by the dramatic downturn of the economy, which was brought on by Wall Street greed. This meant that the pension fund began dropping dramatically in the fall of 2008. Before that, funding levels were within the acceptable range. Even so, funding was not increasing as it should have been because of a formula adopted 10 years ago allowing the state to provide less than its share (based on actuarial guidelines).
It might be popular to scapegoat public employees for the shortfall, but the facts say they are not to blame. A modest increase in pension benefits adopted during the administration of Gov. Robert L. Ehrlich Jr. (R) included an increase in employee contributions. In fact, while Wall Street decimated pension funds, and the state did not meet its actuarial funding requirements, employees dutifully continued to contribute their 5 to 7 percent of pay.
It is worth noting that more than 80 percent of the money to fund pensions comes from employee contributions and investments by the fund. As the economy rebounds, so too will the level of funding. This is not to say that other adjustments are not necessary. The Maryland retirement board has proposed alterations to the funding formula that would end state underfunding.
The ultimate issue is the quality of public services that Maryland taxpayers desire. State and higher education employees have endured three years of furloughs and pay cuts with no end in sight. Turnover of state employees seeking better pay and benefits elsewhere jeopardizes the quality of public safety, transportation, and the health and security of Marylanders. Broken promises to employees translate into broken promises to all Marylanders.
The writer is director of Maryland’s American Federation of State, County and Municipal Employees.
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