House Republicans Propose Pension Reforms

In a news conference this week, House Republicans announced a package of pension legislation to “revamp” the system and put it on “better footing.”  As reported by the Baltimore Sun (limited free views available):

One bill, sponsored by Howard County Del. Gail H. Bates, would require the state pension board to change its assumed rate of return from its current 7.75 percent to 6 percent. Such a move would, at least in the short term, force some hard choices on the state: either increasing its yearly contribution to the system, requiring employees to contribute more or cutting benefits.

Another bill. sponsored by Anne Arundel County Del. Nicholaus R. Kipke, would limit to 10 percent the amount of the plan’s assets that can be put into so-called “alternative investments” such as hedge funds and venture capital. The system now has more than 20 percent invested in such instruments.

A measure proposed by Haddaway-Riccio would add two local government representatives to the pension board to reflect last year’s shift of part of the burden of teacher pensions to Baltimore City and the counties.

Republicans members formed a workgroup during the interim to formulate proposals.

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