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Tuesday, July 19, 2011

What Happened to Pension Reform in Wicomico County?

Earlier this year five members of the Wicomico County Council made a deal with the devil. Riding in at the eleventh hour, County Executive Rick Pollitt told the council that they had to pass his “early retirement plan”. The only way he could balance his budget was with great savings to be won from this legislation.

All but councilmen Bob Culver and Joe Holloway relented. The savings never materialized. The vast majority of those taking advantage of the program were anything but “early” retirees. Those that took advantage received and extra 10% of their salary tacked onto their pensions. Everyone was happy … except for the taxpayers.

However, during the debate over this misguided piece of legislation, the public was promised by council that they would look into reforming the county’s pension system from its current defined benefit plan to a more taxpayer-friendly defined contribution plan.

Just as a Democrat promise for spending cuts after tax increases, this promise is proving itself to be hollow. All attempts to put pension reform on the council’s agenda have met with with silence or disdain.

One argument proffered by those who now oppose meaningful pension reform (after giving lip service before) is that our county’s pension system is in solid shape. Let’s assume that is true. We should all know that pension plans are always underfunded. It’s not that the county finance staff is dishonest; it’s just that they flunked the same mind reading class that I failed in school. They can’t see into the future any more than you or I. Even IF it was true, NOW is the time to tackle this problem. I can’t understand why elected officials want to wait until a government is on the verge of financial collapse before thy will tackle this problem.

A second argument being circulated is that the council can’t do anything WITHOUT the agreement of the County Executive. HOGWASH! The council can pass this legislation any time it chooses. Now, Pollitt could veto the legislation. The council would need five votes to override. That doesn’t meant that they can’t pass the legislation.

Wicomico voters were promised that pension reform would be brought up. This will save the county even more money in the future. The only difference is that there is no question that we will save money, rather than the “promised” savings of Pollitt’s laughable “early retirement” plan.

The time is NOW! Council President Gail Bartkovich can place this on the work session agenda any time she wants. Failing to do so magnifies the mistake of giving away hundreds of thousands of taxpayer dollars with her ill-considered vote on Pollitt’s “early retirement” plan.

7 comments:

Anonymous said...

So let me clarify with a question. Do county employees currently receive a pension without contributing anything to the pension? If so, then they should definitely be contributing at least %5 of their pay towards their pension. Or %7 like the teachers since everyone wants try and lump teachers in with county employees.

G. A. Harrison said...

Anon 0942 -

Yes, I am pretty sure that they contribute to their pension. However, that is not what I'm talking about here. A defined contribution plan is like a 401-K. Defined benefit plans, like the teachers and county employees always wind up being a burden on the taxpayers because there is no limit as to what can be paid out.

The county should adopt a plan with the employee putting in X% of their salary and the county matching Y%. This way the cost to the taxpayer is certain.

Anonymous said...

Its a 403B.

Anonymous said...

GA, what do you mean by "I am pretty sure". If you write a piece like this demanding pension reform, shouldn't you know what you are talking about? County employees contribute nearly 6% into the pension plan. The plan is 97% funded. It is in good shape. It isn't broken. 2:39, it is a 457B. If they do a new plan, it should be for new hires. If the current plan is changed, how do existing people in the plan continue to receive the benefit that they paid into their entire employment. The county pay sucks, with the exception of the pension, their benefits aren't that great. Hey, I have an idea, let's cut the worker bees some more, make them do the work of three just to satisfy the vocal minority.

Anonymous said...

Wicomico County has a 457 for it's employees.

G. A. Harrison said...

Anon 1623 -

First of all the plan is not 97% funded according to the county's finance department. When the council considered the "early retirement" plan they were told that it was 90% funded. Now, that is still pretty good.

I never said that the plan was broken. I said that it needed to be changed to a defined contribution plan. This is because defined benefit plans have a history of becoming broken. That can't happen with a defined contribution plan.

Current employees cannot be moved over to a defined contribution plan. This would only apply to new hires. This was why it was stated during the "early retirement" debate that new hires should not be brought into the current plan and that the council wanted time to make a change.

BTW - if your job with the county is so bad, QUIT! There are plenty of people who would be happy to have it. County employees don't deserve pay or benefits better than they could get in the private sector. If you think you can do better in the private sector then go right ahead.

Anonymous said...

GA, I never said my job was so bad. I like my job, however, the pension is the only reason that I have stayed. I am sick of the "if you don't like it quit" and "there are plenty of people.." if that was true, where were they when the county couldn't get people to apply? The employees don't get, and don't expect better than private sector. But why should they be less across the board? The pay never has been as good, but the retirement isn't bad. That is why many choose to stick it out. Right now, the private sector isn't fairing as good, and now they want to beat on the county. Well, they made that choice to take the money, over job security and the retirement. I will never understand why so much energy is spent trying to get blood out of a turnip (county), when some of that energy could be directed to the state level and all their programs, and the fact that they stole millions upon millions of dollars from the local taxpayers, placing local government in such a bad position.