As covered in the Maryland Reporter, the outside advisor for the Maryland pension system told its Board of Trustees at their meeting this week that he was “very disappointed” that the legislature reduced the state’s payment into the retirement fund by $100 million in budget action this month.
State had aimed to put $300M towards paying the unfunded liability of the pension system. However, because of the unknown effects of the federal sequestration, the General Assembly decided to hold $100M of that $300M in its rainy day fund until January 1, 2014. If the funds are not needed, then the state will put that money towards the unfunded liability. For now, they are putting $200M towards the unfunded liability.
As reported by the Maryland Reporter both the outside advisor and the State Treasurer voiced concerns over the budget action,
If the legislature continued “tinkering” with the $300 million added contribution, said Brian Murphy of Gabriel Roeder Smith & Co., it would show the absence of “a firm funding policy” and require recalculating the annual contribution. GRS is the system’s actuary.
“That’s very sad for the system,” Murphy told the 14-member board holding its monthly meeting in Baltimore. “I can’t tell you how disappointed I was.”
State Treasurer Nancy Kopp, chairman of the board of the State Retirement and Pension System, agreed. “I opposed it strongly,” she said.