The Public Employees’ and Retirees’ Benefit Sustainability Commission held its last meeting today to discuss and vote on its final report. The draft document, distributed during the meeting, contains numerous recommendations. One of which reiterates the Commission’s recommendation from its 2010 Interim Report to phase in a requirement that local boards of education, community colleges, and libraries pay half of the total retirement costs for their employees. However, following discussion during the meeting, this recommendation was amended to strike community colleges and libraries.
Other recommendations include:
- the development of a comprehensive transition strategy whereby the retiree prescription plan components are altered to mirror Medicare Part D plan but the benefit levels are altered over time to allow retirees and those contemplating retirement ample time to plan for their future health care needs;
- the continued study of adding a hybrid benefit option to the State’s retirement offerings (Commission approved amended report language recognizing concerns of the Board of Trustees for the State Retirement and Pension System with regard to a Cash Balance option);
- given the ambiguous nature of Maryland case law, the further examination of changes to the COLA formula for existing employees and retirees if additional changes are necessary to the pension systems (Commission adopted language requesting an AG’s opinion of Maryland’s statute with respect to this issue and other states that recently changed COLA formulas for existing employees); and
- that as economic conditions improve and pension liabilities are reduced, the General Assembly and Governor, in consultation with the board, should work together to develop an alternative funding model that provides for both adequate funding for the pension system and more stable contribution rates over the long-term (Commission adopted modified language to insert “maintain in current form until finances improve” and “and be brought back into compliance with GASB 45).
The Commission voted unanimously on all recommendations as amended and its final report should be issued in two weeks.