The Maryland Public Policy Institute
MPPI IN THE NEWS
MARCH 24, 2010
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ANNAPOLIS - Del. Andrew A. Serafini, who during the current General Assembly session has been sounding the alarm about the state's underfunded and underperforming pension system, next week will be on a panel that discusses the issue.
Maryland is one of eight states that faces serious concerns about the funding of its pension system, said Serafini, R-Washington.
A forum called "Will State Employee Pension Bankrupt Maryland?" will be held Tuesday by the Maryland Public Policy Institute at The Maryland Inn in Annapolis.
The policy institute describes itself on its Web site as a nonpartisan public policy research and education organization that focuses on state policy issues.
According to information provided by The Pew Center on the States, there are "serious concerns" about Maryland's pension liabilities, Serafini said Wednesday morning.
The Pew Center on the States works to advance state policies that serve the public interest, according to its Web site. The center conducts research, brings together diverse perspectives and analyzes states' experiences in an effort to identify and advance nonpartisan, pragmatic solutions for problems affecting Americans, the site says.
Eight states are classified by the center as having "serious concerns," according to Pew Center documents.
According to the center, Maryland's pension fund was 96.7 percent funded in 1999. By 2008, it was only 78.39 percent funded, according to The Pew Center.
Experts at the U.S. Government Accountability Office have set an 80 percent funding benchmark, according to the center.
Serafini said he attributes Maryland's pension funding problem to a "perfect storm" of enhanced benefits, underperforming markets and a failure to allocate more than the required amount to the pension fund.
Throughout the country, state and local governments face a collective liability - what will be owed to employees-of more than $3.35 trillion for pensions, health care and other retirement benefits, Pew Center
The governments have saved $2.35 trillion to pay for those benefits, leaving a shortfall of about $1 trillion, according to The Pew Center.
Changes might need to be made to state employees' retirement benefits, Serafini said. For example, the state might need to switch from a pension system to something like a 401(k) system as the private sector has done, he said.
Serafini stressed that benefits are safe for state employees currently receiving them. Any proposed changes to the benefits package would affect only people who are hired in the future, Serafini said.
"I'm not trying to take away people's benefits," he said.
Serafini said he plans to set up meetings with interested parties in Washington County to discuss the issue after the current session.
The state needs to make sure it appropriately funds its promises, he said.
There is a push in the Senate to push some of the cost of teacher pensions on to counties.
"I'm not an advocate of that," he said.
Next week's panel will include Serafini; former Secretary of the Maryland Department of Budget and Management Cecilia Januszkiewicz; Kil Huh, director of research for the Pew Center study; a senior fellow for the Maryland Public Policy Institute; and the executive director of the Maryland State Retirement Agency.
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