Benefit Sustainability Commission to Hold First Meeting in Next Few Weeks

After months of waiting, the Public Employees’ and Retirees’ Benefit Sustainability Commission has been appointed and as reported by MarylandReporter, is moving forward to put together a schedule and hold its first meeting, which could be the end of this month or the beginning of October.  The Commission is to study and make recommendations with respect to all aspects of State funded benefits and pensions provided to State and public education employees and retirees in the State.  One issue in particular is the unfunded liability associated with retiree pensions and health benefits.

“What is the reasonable level of unfunding? That is the important question,” said commission chairman Casper Taylor, Jr., a lobbyist who was speaker of the House of Delegates for nine years. “I am not at all sure that our dilemma is currently as bad as some people think it is.”

At the moment, said Taylor, “It’s impossible to say that benefits are too liberal and need to be reduced. If we reach that conclusion, obviously we have to reduce benefits. But we are a long way from reaching that conclusion.”

That being said, State employee unions are expressing concern over the possibility of detrimental changes and reductions in pension and health benefits.

Commission member Barbara Hoffman, a lobbyist who chaired the Senate Budget and Taxation Committee, expects to have “conversations” with union officials, but they won’t be “easy,” she said. “Everyone has to understand that money is not unlimited.”Hoffman noted that some states have cut or reneged on their pension obligations because of insolvency. She said Maryland does not want to be in that position because “it would threaten the state’s Triple A bond rating and open the state to lawsuits.”

Hoffman said she understood the fear of current and past employees and teachers that their benefits could be reduced.

“The biggest fiscal issue is the long-term liability for pensions,” she said.

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