Pension Shift Apparent Compromise: Big Hit in FY13, Slower Phase-In

As the Senate and House budget conference committee continues, tentative pieces of a pending compromise have become available. While no formal action has yet been taken, the shape of the teacher pension shift appears to be an area of agreement.  The favored proposal would largely follow the House’s more aggressive shift schedule, beginning with a move of 50% of the employer’s normal cost in the first year, FY 2013.  While the House then escalated the shift in only two additional years (75% in FY2014, then 100% in FY2015), the new plan takes three additional years (65%, 85%, 100%).

While details are not yet available, the most accurate document available is likely the House Summary document, available online here. The table on Page 27 shows the House’s effects for FY 2013 (which would remain the same) and for FY 2015 (which would still represent a fair reflection of the final phase-in, only not happening until FY 2016.

A statewide summary of the total fiscal effect of the cost shifting follows:

Shift Effect

FY13

FY14

FY15

FY16

Senate Plan

31

96

158

216

House Plan

137

200

223

216

Conference
(tentative)

137

173

190

216

Michael Sanderson

Executive Director Maryland Association of Counties

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