An Associated Press news report said the Public Employees’ & Retirees’ Benefit Sustainability Commission is also recommending that state employees would have to spend 25 years working for the state, instead of 16 years, to receive the maximum retiree health care premium subsidy and put in 10 years instead of five to become pension vested.
In addition, the panel says cost-of-living adjustments for future retirees should be contingent on investment returns for the pension trust fund meeting or exceeding the actuarial target, according to the news account.
Commission members are expected to present their recommendations to Governor Martin O’Malley and state lawmakers next month. “
The commission was created to help resolve large unfunded liabilities in the pension and health benefit system for state workers. The panel members hope to reduce state health care costs by 10%. The state pension system has $33 billion in unfunded liability, the AP said.
Also, now, the state foots the bill for teacher pensions in Maryland, while local boards pay the Social Security costs. The commission would like the state and local boards to split the cost of teacher pensions and Social Security payments but phase in the changes over at least three years, according to the news report.