Tuesday, March 24, 2015

State Raids State Employee Pension Fund Once Again...

The following letter was sent from Timothy Liegey to Governor Larry Hogan, U.S. Sens. Barbara Mikulski and Ben Cardin, as well as members of the Maryland General Assembly. A copy was provided to The Dagger for publication:

Dear Governor Hogan:

My name is Timothy Liegey and I am a school librarian with the Harford County Public School system. I am writing to you in regard to the Maryland State Pension System. As an employee who has contributed nearly 20 years into the state pension system, I have great concerns regarding the Maryland House of Delegate plan to reduce contributions to the state pension system.

The history of the pension system in Maryland has been extremely volatile to say the least. It started with former Governor Parris Glendening who intentionally underfunded the retirement system so he could spend more during his final years in office. During this period, the General Assembly adopted the Corridor Funding Method freezing state pension contributions at their levels unless the system fell below 90 percent of the funding it would need to meet its obligations. Furthermore, Nathan Chapman became a money manager for Maryland’s pension system under Gov. Glendening and in that role, was able to arrange public investment in his own companies, causing an estimated loss for the pension system of $6 million.

Next, former Governor Robert Ehrlich gave state teachers extra pension benefits (to gain political favor) which dragged the retirement programs deeper into unfunded pension obligations.

Finally former Governor Martin O’Malley pushed a series of pension reforms through the legislature that cut worker benefits and increased their current contributions. He pledged to reinvest some of the savings, $120 million in each of the first two years and then eventually as much as $300 million annually, back into the system, with the goal of restoring it to 80 percent funding by 2023 and to 100 percent funding about 15 years after that. Of course, that did not happen and eventually the state legislators “borrowed” $200 million out of the system.

This brings us to the present. I have just read that the House budget includes changing the state’s pension funding system, enabling the state to pay about $75 million less into it and slowing repayments to a local income tax reserve fund.

How long will these games with the Maryland State Pension System continue? This is not Monopoly money being manipulated here. It is the hard work, sweat, and earnings of teachers and state employees who have been paying into this system since the beginning of their careers with the promise that the money would be there for them when they retired. With this latest shell game being played in Annapolis, I am left to wonder if there will be a pension system when I and my colleagues retire in the decades ahead.

I suppose for me (and my fellow teachers) the most galling part about all of this is the fact that the legislators in Annapolis have left their separate pension system alone and have chosen to play all of these games with the people’s money. As a teacher, I have to work 30 years to be vested in a system that will guarantee me a maximum of 41% of my highest salary (assuming I choose a single annuity – 35% if I choose the double annuity). Meanwhile, the politicians in Annapolis only have to work 16 years to earn a maximum of 66% of their highest salary.

I have been a school librarian for nearly 20 years now. Under the legislative pension, I could have retired by now. Also, as an employee in the Harford County Public School system, my teacher contract has not been honored these past 6 years resulting in the loss of step increases promised to all teachers in the contracts we signed when hired on as teachers. The end result is that my future pension benefits have been reduced due to the loss of income in the present.

And if all that was not enough, during Gov. O’Malley’s administration, all teachers were forced to contribute an extra 2% into a pension fund that was underfunded by politicians, not teachers. In addition to the absurdity of superimposing this 2% “tax” on teachers, it is a fact that this extra money is not even going into the pension fund but instead to a general fund where the politicians in Annapolis can spend it any way they like. And on top of that, the legislators in Annapolis exempted themselves from the same increase! Really? I was under the impression that elected officials were supposed to serve the people not screw them.

Now I understand that both you and Comptroller Franchot are against this latest maneuver in the House budget to divert funds from the underfunded pension system. First, I would like to thank both of you for your stance. Second, I would like to implore you and the Comptroller to stand firm against both Speaker of the House Michael Busch and Senate President Mike Miller in their attempts to further devastate the pension fund. Their actions in Annapolis regarding this issue have shown that they are no friends to teachers and state employees.

You ran on a platform pledging to work on behalf of all citizens in Maryland. For the record, I am registered as an Independent and voted for you because I am sick and tired of partisan politics and felt you were the best candidate for the job. I do not believe the pension issue is a Democratic or Republican issue; nor is it a liberal or conservative issue. It is a people issue and there is an obligation on the part of all legislators in Annapolis to honor the wishes and promises made to those people who have worked tirelessly on behalf of the citizens of Maryland to do the peoples’ work and educate the children of all Marylanders.

Please, please, please, fight those who would renege on these promises and protect the pension system for those who have earned it and are entitled to it.


Timothy Liegey
Harford County Public Schools

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