- The Washington Times - Saturday, December 24, 2005

ANNAPOLIS (AP) — Maryland lawmakers say one of their top priorities in the 2006 General Assembly session will be improving the pension system for teachers and state employees, which ranks nationally near the bottom.

Whether the system is the worst in the county, as union leaders claim, is arguable because of such variables as employee benefits, salary levels and how much workers pay into it. But the plan is definitely among the least generous, said state Sen. Edward J. Kasemeyer, co-chairman of the legislature’s joint pensions committee.

“I think that from the Senate perspective, there is a desire and the intent to make what I would call a significant improvement,” said Mr. Kasemeyer, a Democrat who represents parts of Baltimore and Howard counties.

House Speaker Michael E. Busch, Anne Arundel Democrat, agrees.

“You can’t be the wealthiest state in the union and have the worst pension system for state employees and teachers if you want to compete in the region for the best and the brightest,” he said.

Despite the rapid growth of tax revenues from a booming economy and a growing consensus that pension improvements are needed, there is no guarantee benefits will be increased next year.

Gov. Robert L. Ehrlich Jr., a Republican, recently said he was still working on his budget and had not decided what to do about pensions. But the governor said demands for increased spending outstrip revenues, even with the strong growth in tax revenues.

The Maryland State Teachers Association and the American Federation of State, County and Municipal Employees have organized a lobbying campaign, using a plan put forward by teachers that would cost the state about $480 million a year. About $318 million would go to improvements in teacher pensions and the rest for state employees.

The teachers association cites information gathered by the National Education Association to back its claim that the system is the worst in the country.

Based on a national average of $61,100 for the final three years of employment, a Maryland teacher would get $22,974 annually. A teacher with the same salary retiring in Virginia would get $31,162, according to the association.

Pension-system officials say the figure is misleading because teachers and state employees in Maryland contribute just 2 percent of their pay to the pension plan, a lower figure than in many other states.

Union officials say state employees have such small pensions because their pay is so low.

Curtis Johnson, 53, who works at Spring Grove Hospital in Catonsville, said if he retired now after 32 years on the job, his pension would be $919 a month before deductions for health insurance. “Certainly, I couldn’t live on that,” he said. “I’m working and struggling to get by.”

Pension payments are typically based on three factors — average salary over the final three years of employment, the number of years of service, and what is called a multiplier, the percentage of the average salary that is paid for each year of service.

The multiplier in Maryland is 1.4 percent, which would give an employee who works 30 years a pension of 42 percent of the final average salary. But the multiplier was only 1.2 percent before 1998, so workers who were employed before that would get less than 42 percent.

The teachers association plan would increase the multiplier to 2 percent with retroactivity for previous years worked. That would boost pensions to 60 percent of the final average salary for 30-year employees.



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