A proposal to change the funding method for state pensions that will reduce state contributions to the system and delay reducing the state’s unfunded liabilities was criticized by two private sector representatives on the special commission studying retirement benefits.
“The pension plan will never get to 100% funding,” said George Roche, former chairman and president of mutual fund giant T. Rowe Price, at a hearing Monday. “The workers are really exposed to a lot of risk and I don’t like it.”
The plan presented by Dean Kenderdine, executive director of the Maryland State Retirement and Pension System, and the system’s actuaries would replace the current “corridor” funding method with a plan that spreads the pension liability over a rolling 20-year period.
The new plan, approved by the system’s Board of Trustees, would initially cost the state $500 million more over the next six years, but eventually would reduce state costs $18 billion over the following 16 years.
“It’s not sound in the private sector, and it shouldn’t be for the state,” Roche said, who called the proposal “some gimmick.”
No comments:
Post a Comment