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Letters to the Editor - Dec. 5

December 10, 2010

Panel studies post-retirement benefits for state employees

To the editor:

During the most recent legislative session, the Maryland General Assembly established the Public Employees' and Retirees' Benefit Sustainability Commission.

The responsibility for this group was to study the current status of post-retirement benefits, consider possible solutions and then report back to the General Assembly. This committee has been meeting this fall and on Nov. 15, had a public meeting.

During this meeting, the commission outlined some possible scenarios. They made it very clear in the opening comments, "These proposals are designed to be discussion starters, not firm recommendations."

As I have promised throughout the last months, I want to make sure that all interested parties are kept apprised of possible changes. The proposed benefit change scenarios can be viewed by going to the Maryland General Assembly website at www.mlis.state.md.us. On the first page, click on "Everything Else." Then, click on "Postings from Committees, Commissions, Task Forces and Study Groups." Next, choose "Public Employees' and Retirees' Benefit Sustainability Commission." Finally, click on "Overview of Proposed Benefit Changes."

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The report covered possible changes to both health and pension benefits. There are two scenarios for the health plan. The first proposes possible increased costs for employees, while the second keeps premiums the same, but changes the plan design.

The second part of the analysis investigates possible changes to the pension plans. The analysis looked into possible changes for normal and early retirement, COLA formulas, benefit multipliers and the DROP program. They also looked at possible hybrid plans known as "Cash Balance" plans. These combine some elements of a traditional pension with defined contribution plans. Once again, all options create from moderate to significant savings to the state.

Obviously, with Maryland facing a $1.6 billion deficit, the end of stimulus funding and a sluggish economy, there will be intense pressure during the next legislative session. My goal is to keep state employees and citizens informed as this debate continues.

Andrew A. Serafini

delegate

Subdistrict 2A

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