Joint Committee on Pensions Reviews 2016 Legislative Proposals

In its most recent meeting, the General Assembly’s Joint Committee on Pensions reviewed legislation proposed by the Board of Trustees of the Maryland State Retirement and Pension System (SRPS).

This year the Board is proposing two changes. The first change will adjust the amortization schedule for the current participating governmental unit (PGU) pool to mirror the amortization schedule in effect for the State systems.From the Board document describing the proposals:

There is a large negative amortization base that will be fully amortized during fiscal year 2021. As a result, the pooled employer contribution rate for the PGU pool is projected to experience a large increase from 4.22% in fiscal year 2021 to 8.57% in fiscal 2022. In anticipation of this large increase, the actuary for the SRPS, GRS, is recommending that the funding policy be changed for the PGU pool such that the pooled unfunded liability is amortized over a period that is 25 years or less. This change would increase the contribution rate over the next five years above what is being projected, but would avoid the dramatic jump in the contribution rate in 2022.

The second proposal identifies seven sections in statute that are obsolete or in need of simplification or clarification.

Additional information on both proposals can be found in the document distributed by the Board.