Maryland’s State Treasurer Nancy Kopp addressed MACo’s Legislative Committee on March 26 discussing changes to the plan for reinvestment of pension savings and reforms proposed by the US Securities and Exchange Commission (SEC) that could affect money market funds. The Treasurer described how her past experience as a member of the House of Delegates and her current positions as Chairman of the State Pension Board of Trustees, the Chair of the Capital Debt Affordability Committee, a member of several national associations for state treasurers, and a newly appointed board member of the Financial Accounting Foundation(FAF) gives her a unique perspective on a variety of issues facing the State.
The Treasurer has been an outspoken advocate of continuing to reinvest savings from recent pension reforms back into the pension system in light of a provision included in the Governor’s budget to permanently divert a portion of the pension reform savings to the State’s General Fund. Both the House and the Senate have modified the Governor’s proposal, making it applicable only for the next several years. The Treasurer was pleased that the General Assembly eliminated the permanent diversion of pension savings and committed to a plan that continues to make progress towards 80% funding in 2025 and 100% funding by 2039. As a fiduciary of the fund, along with other members of the Board of Trustees, the Treasurer’s aim is that the State pension fund stay on track to reaching 100% funded status by 2039.
Through her involvement with national associations of state treasurers, auditors, and comptrollers, and as a Board member of the FAF, the Treasurer tracks national financial regulations affecting the State. The SEC’s current proposed reform of money market funds includes a proposal to require money market funds to sell and redeem shares based on the current market-based value of the securities in their underlying portfolios, rounded to the fourth decimal place, i.e., transact at a “floating” net asset value per share. This proposed reform could adversely impact the utilization of local government investment pools. The Treasurer would like to work with local finance and budget offices on this potential fund management issue.
The Treasurer finished her remarks with a pitch for Maryland’s College Saving Program. The savings program is one of the best in the nation, according to the Treasurer, providing tax incentives to parents, grandparents and others who want to invest as little as $25 per month towards a child’s college education. She encouraged those running for office to share information about the plan with their constituents.
Members of the MACo Legislative Committee include representatives from Maryland’s 23 counties and Baltimore City. Each county gets one vote on the Legislative Committee. The committee meets regularly on Wednesdays at the MACo office during the General Assembly Session. During the interim, the committee meets quarterly to develop legislative priorities for the coming year.
For more information, see the following previous posts on Conduit Street, Treasurer Kopp Tabbed for Accounting Leadership, House Gives Preliminary Approval to Budget Plan, Final Vote Today, House Republicans Announce Plan to Limit Budget Growth to 1%, Senate Passes $39 Billion Budget Plan for Fiscal 2015, and this information on the Maryland’s College Saving Program.