Costly, Unbalanced Pension Enhancement Bill Dies in Committee

A costly, unbalanced pension enhancement bill did not receive a vote in the House Appropriations Committee, and therefore died when the General Assembly adjourned sine die. For county governments that participate in the Law Enforcement Officers’ Pension System (LEOPS), HB 659 would have required an automatic increase in county law enforcement pension benefits, and a new variable in county government pension contributions.

The bill proposed to increase the normal service retirement benefit multiplier for members of LEOPS from 2.0% to 2.5%. The bill also would have raised – for the second time in three years – the cap on normal service retirement benefit payments from 65% to 70% of the member’s average final compensation. Without a true “local option” amendment, the bill was simply not affordable as a statewide county mandate and would have presented substantial budget difficulties.

According to the MACo testimony:

According to the bill’s fiscal note, local pension liabilities would increase by a combined total of approximately $19.6 million, and employer normal costs would increase by $1.5 million. Amortizing the increased liabilities and adding the full normal cost increase will result in pension contributions growing by approximately $3.1 million in fiscal 2022 and annually thereafter, according to actuarial assumptions.

An amendment could resolve this county mandate. There is precedent for providing county members of the state system with an option to join the benefit enhancement, too. Such an option would provide a discrete amount of time for a county government to determine whether they would join the enhancement.

Counties stand ready to work with state policymakers to develop flexible and optional tools to create broad or targeted personnel incentives, but resist state-mandated changes that preclude local input.

For more on MACo’s advocacy efforts during the 2020 legislative session visit the MACo’s Legislative Tracking Database.

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