Maryland Legislators at Odds on Pension Reform

March 28, 2006 ( - Both sides of the Maryland Legislature are holding firm that their pension reform proposals are better suited to enhance retirement paychecks.

A news report said that both the state House and state Senate unanimously passed their own bills this week.

The Senate plan would increase employee contributions from 2% to 5% over three years, boost the multiplier used to calculate annual retirement accrual from 1.4% to 1.8% and be retroactive to 1998, the news report said.   The House version raises contributions to 5.5% –  phased in over five years for state employees only –  and offers a 2% multiplier, but provides no retroactivity. It also would relax the restrictions on allowing retired teachers to return to the classroom and remain in the pension system.

”We have two guiding principles. We’re doing this to retain teachers and attract new ones,” said Senator Patrick Hogan (D). ”We firmly believe our bill does that.”    Meanwhile, Delegate Mary-Dulany James (D), the House chairwoman of the Special Joint Committee on Pensions, said ”Our No. 1 goal was recruitment, and we thought taking a prospective approach was important.”

Newly hired teachers and state employees who work for 30 years with an average annual salary of $50,000 would receive $30,000 in retirement under the House plan, while current employees would receive less because they would not get enhanced benefits for past experience.

Senate Majority Leader Nathaniel McFadden said the exclusion of retroactivity from the House bill is a major deficiency.   However, despite the disparities, lawmakers are confident a compromise can be worked out.

Some lawmakers remain wary about what the post-conference product might cost, though. The amended House bill would cost $129 million, about $9 million more than the Senate version.   Governor Robert Ehrlich Jr. (R) did not include any money for pension reform in his budget.