Allegany County had proposed a withdrawal from the State’s pension plan, which allows local governments to offer the state pension benefits as “participating governmental units.” From coverage in the Cumberland Times-News, the County had inquired about a withdrawal from that status, but fiscal effects will shelve the idea. From the online article:
County officials had planned to have all new hires move into a new type of pension plan. Current employees would have remained under the state plan. Offering new hires a defined contribution plan could have saved a good chunk of money in tight budget times, Bennett has said. Bennett said he’d keep discussions open with the state pension officials to see if there was any way around the problem.
The reason for the fat bill is that Allegany County, through no fault of its own, has its pensions 79 percent funded, said Bennett. The $6 million would bring the county to 100 percent funding.
Contributions to the state retirement fund have skyrocketed over the years, [County Finance Director Jason] Bennett said.
Under state law, withdrawal from the state-managed pension system requires satisfying the apportioned share of the system’s unfunded liabilities, thus the county’s calculated withdrawal payment.