Major Unions Seek Pension Reform Compromise

As the House of Delegates appears prepared to pass its own revised version of pension and benefits reform for state employees and teachers, the two largest unions appear to be lining up behind a compromise proposal to adjust facets of the pension reform proposal.

Coverage in the Baltimore Sun indicates:

The Maryland State Education Association, a 71,000 member union, would go along with O’Malley’s proposed higher contribution rate (5 percent to 7 percent), though the new rate would phase in over two years, according to a presentation MSEA emailed around Annapolis Wednesday.

They also accept O’Malley’s proposal to that new hires would have to work for 30 years before retiring.

The most meaningful difference is over the tricky area of average final compensation — the figure used to determine the size of they pension check: Teachers want it to be calculated as the average pay over their last three years. O’Malley’s plan would extend that time period to five years, diluting the final salary in most cases.

According to the Sun, another major union (AFSCME) is “largely supportive” of the proposal.

The Washington Post notes that the Governor, who proposed the initial round of reforms as part of his budget plan, is contemplating the alternative proposal:

O’Malley spokesman Shaun Adamec said the governor is reviewing the proposal.

The plan would have roughly the same impact in fiscal 2012, Adamec said, but “it takes a little longer in the out years and there is a long-term sustainability problem.”

Early discussion of the alternative proposal indicates that its design would still afford the same savings for FY 2012 ($120 million in general fund relief) that has been incorporated as part of both the Governor’s and the House’s budget plans.

Michael Sanderson

Executive Director Maryland Association of Counties

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