Maryland lawmakers approved a fiscal 2015 budget that trims pension contributions aimed at improving the funded status of the $44 billion Maryland State Retirement & Pension System, Baltimore.
Gov. Martin O'Malley is expected to sign the budget, which was approved April 5.
Under a package of reforms enacted in 2011, state officials agreed to contribute an additional $300 million per year to the pension fund beyond its annual required contribution, to reach an 80% funding level by 2023, up from a current level of 66%. In exchange for the increased funding, state workers and teachers agreed to higher employee contribution levels and reduced benefits, including longer vesting periods and leaner cost-of-living increases.
Diminished revenue projections forced lawmakers to hold back $200 million in 2015, with the promise to catch up an additional $50 million per year until they can reinvest $300 million annually by 2019.
The new budget will add $100 million in 2015, on top of the annual required contribution of $1.6 billion. “We are focused on the money going in. We'd say that's a good thing,” said Jeff Pittman, spokesman for AFSCME Maryland, which represents state workers.
“While we would have preferred the full amount of reinvestment, we recognize that this plan does not call for a permanent reduction of supplemental payments to the pension trust,” said Michael Golden, spokesman for the pension fund, in an e-mail. Officials there “are encouraged that the Legislature has restated its commitment to the long-term goal of 100% funding of the pension trust fund by 2039,” Mr. Golden said.