Republican lawmakers are pushing a bill to cut the expected rate of return on Maryland $38 billion pension investment portfolio — a move that would effectively add billions of dollars to the state’s pension liabilities. The move to reduce what the GOP considers an unrealistic 7.75% rate to something like the corporate rate several points below that drew strong opposition from the State Retirement Agency at a hearing Tuesday.
Another bill backed by county governments to expand the 14-member Board of Trustees of State Retirement and Pension System by adding a county representative was opposed by the state teachers union at the House Appropriations Committee hearing.
The Truth in Pension Accounting Act
HB387 , the Truth in Pension Accounting Act, seeks to address the 7.25% rate of return the pension system has earned in the last 10 years by lowering the current pension rate of 7.75% to echo the interest rate dictated by the Internal Revenue Code for corporations and private pension plans. Currently, state and local governments get to choose their own rates of return, which average 8%.
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4 comments:
Fact is, the major credit rating agencies - (i.e. Moody's, Fitch, S&P) - have already issued an opinion that Maryland's interest rate projections are overstated. The State Retirement Agency has issued pension fund projections that are not realistic in the opinion of the underwriters, particularly the OPEB liability.
This is going to come back around like a boom-a-rang and very soon.
I am a Republican and I think this is a big mistake. Maybe the republican lawmakers can request they reduce their state salaries and pension investments.
"overstated"-Code word for officials knowingly lying to people to make them think things are okay. People need to wake up and realize most of what comes out of most politicians mouths esp the democrats are bold faced lies. Lying is the only thing most democrats are proficient at.
Like when gas was predicted to keep going down in price?
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