Maryland May Change Pension Eligibility Requirements

By on December 27, 2010 at 4:50 pm

On Monday, the Public Employee’s and Retiree’s Benefits Commission (PERBC) listed the recommendations they will be presenting to Maryland’s state governor next month in regard to state employee benefits. The commission plans to recommend the following:

• Increase number of years that an employee must work for the state from 5 to 10 before they become eligible for vestment into the state retirement plan
• Increase the number of years from 16 to 25 before employees become eligible for full state health benefits when retired
• Increase number of years from 5 to 15 before employees are eligible to participate at any level in the state retirement health plan
• Move the responsibility for half of the teacher pension costs to local education boards instead of being carried entirely by the state
• Limiting participation of employee health benefits to employees that retire immediately after leaving state service and requiring, by 2020, that employees that are eligible for Medicare Part D take the option and receive a supplement from the state only.

The recommendations by the commission were immediately met with opposition by labor parties throughout the state. However, the commission believes that without investing into the security of the system the state faces loosing these benefits altogether.

These are only recommendations the commission stated, they do not have the ability to write laws or enforce them. Investing into the future is crucial though, they stated, because the system currently faces over 30 billion dollars of unfunded debts. Without making these changes the level of debt could explode.

School boards around the state are nervously watching the outcome of these recommendations. They feel that there will be severe cuts in educational programs and an increase in classroom size if they are forced to cover half of the teacher pension costs. Boards do not have the authority to raise taxes to cover their expenses and must rely on county governments to fund them. At this time the boards cover all the Social Security payments of teacher salaries. If the proposition becomes law, the boards will only cover half of the Social Security costs and half of the pension costs.

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