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Posted at 9:51 PM ET, 01/ 4/2011

Maryland's pension problem isn't state workers' fault

By Patrick Moran, Baltimore

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.

By Patrick Moran, Baltimore  | January 4, 2011; 9:51 PM ET
Categories:  Maryland, economy  
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Comments

Perhaps Mr. Moran could also tell you that an 8% return each year (the amount factored into these investment returns) is a bit high and if you factor in a lower number the situation is much worse........so the pain will only continue to increase.

Posted by: jeffreid2 | January 5, 2011 11:09 AM | Report abuse

I love this naive belief that if you invest your money in a retirement fund you are guaranteed the principal plus a good rate of return. Try telling the former Enron employees that.

Mr. Moran should get a real job. He'd quickly find out that the world is slightly less forgiving than he thinks.

Posted by: simpleton1 | January 5, 2011 11:26 AM | Report abuse

How switching these government employees to 401k's and similar plans like the rest of the middle class? What makes them so special?
Or, on the other hand, why not give all Americans access to the same relatively lavish pension/healthcare plans the unions demand for themselves?
It's worked out so well in so many of the socialistic countries in the E.U.

Posted by: spamsux1 | January 5, 2011 12:04 PM | Report abuse

How about switching these government employees to 401k's and similar plans like the rest of the middle class? What makes them so special?
Or, on the other hand, why not give all Americans access to the same relatively lavish pension/healthcare plans the unions demand for themselves?
It's worked out so well in so many of the socialistic countries in the E.U.

Posted by: spamsux1 | January 5, 2011 12:05 PM | Report abuse

It is agreed that pensions for state employees are approved by the state; however, why not an investigation of higher education professors, e.g. university and college professors who teach 3-6 hours per week, but get paid extremely high salaries. The tax payers pay most of the funds for this. This could decrease tuition at most schools.

Secondly, the first item on the list to cut is any benefits paid to or given to undocumented persons. It was stated previously that if California cut out the benefits and payments to undocumented persons, it could balance its budgets. Also, stop renaming facilities. Besides the signs, new names must be placed on maps, GPS systems, etc. It is an expensive proposition.

I wrote to the state executive (governor) several years ago proposing a state lottery based on social security numbers and tax returns. Filing a tax return would give a person the right to buy a $5 lottery ticket and the winner would be picked at random in a computer program. Filing a joint return would allow each tax payer to buy a ticket. Besides collecting additional monies, it would encourage the filing of a tax return.

Thanks for your attention.

Posted by: keoghnj1 | January 5, 2011 12:41 PM | Report abuse

Sorry, congressional republicans believe no one should have benefits as good as their "GOLD PLATED LIFE TIME HEALTH AND PENSION BENEFITS!" that "We The Small People" are forced to pay for!

Posted by: knjincvc | January 5, 2011 1:51 PM | Report abuse

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