Benefit Commission to Vote Soon – Including on Pension Shift

As reported by, the Public Employees’ and Retirees’ Benefit Sustainability Commission will begin voting on proposals to change State pensions and retiree health benefits at its next meeting on December 13.

Committee staff laid out some potential scenario changes in pension and health care benefits in a brief memo Nov. 15. The possible impact of these changes was calculated by actuaries and distributed to the public to discuss at an open hearing a few days later. They include increasing the vesting period to obtain a pension from five to 10 years, and applying the rule of 95 to receive a full pension, meaning a state employee’s age and length of service would have to add up to 95. Currently, state workers can retire after 30 years of service regardless of age, and someone can retire at a reduced pension at 55 after 15 years of service.

Several options would also reduce the amount of pension earned from each year of service from 1.8% of pay to 1.4% or even 1.2% of pay.

There is also a proposal to freeze cost-of-living adjustments for five years or even for as long as 15 years until the state reaches 80% funding. There is even a proposal to base the COLA on the age of the recipient.

There are two different scenarios for decreasing health insurance costs by 10%. One would increase the insurance premiums that employees and retirees pay, and the other would increase direct out-of-pocket costs for medical services.

The Commission will also consider proposals to shift a portion of teacher pension costs to the counties, as at least one such “policy option” to that effect was distributed to Commission members by the staff.  Casper R. Taylor, Jr., chair of the Commission and former Speaker of the House of Delegates, referenced a 50/50 cost shift proposal that was approved by the Senate last session and then asked the Department of Legislative Services to calculate a 60/40 cost shift proposal for discussion at the next meeting.  Chairman Taylor said he would also like the Commission to consider a cost shift proposal based on wealth, referencing the “One Maryland” concept he championed during his years as a legislative leader.

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