Neall takes a hard look at officials' pension fund

June 20, 1993|By John Rivera | John Rivera,Staff Writer

Anne Arundel County Executive Robert R. Neall has decided not to let anyone else enter a financially troubled pension fund for elected and appointed county officials, and is studying ways to merge it with another plan.

The pension fund has been denounced as a gravy train because it allowed people to retire after they accumulated 16 years of service, either with the county, the state or some other subdivision. Someone could join the pension fund with the required 16 years of service and retire after just one day.

In addition, the pension became even more attractive when the County Council passed a bill in 1989 that lowered the retirement age to 50 and increased the retirement benefit from 2 percent for every year worked, up to 20, to 2 1/2 percent.

A bill proposed by Councilwoman Maureen Lamb, an Annapolis Democrat, would push the retirement age to 60, or 55 with 30 years of service. It specifies that employees can only transfer service from other governments within the state, as opposed to out-of-state jurisdictions and the federal government.

The bill, scheduled to be voted on at tomorrow night's council meeting, also changes the benefit percentage, from the current 2 1/2 percent for the first 20 years and 2 percent thereafter, to 2 percent for the first 10 years and 2 1/2 percent after. Finally, it eliminates the $4,800 minimum pension.

Mr. Neall is expected to sign Ms. Lamb's bill if it passes.

"This is a start. It doesn't solve all the problems," said Louise Hayman, a spokeswoman for Mr. Neall.

But the county executive remains concerned about the financial condition of the pension fund for appointed and elected officials.

"He is strongly considering doing away with it entirely," Ms. Hayman said.

According to a report of the Anne Arundel County Pension Oversight Commission, the fund is only 57 percent funded. The funding represents the pension's assets as compared to the benefits employees have accrued.

The other county pension funds are at least 100 percent funded; several are more than 150 percent.

This year, the county paid $1.588 million into the appointed and elected officials' pension fund. In the fiscal year that begins July 1, the county will pay $1.9 million into the pension fund.

The increase is to bolster the financial health of the pension, said Walter Chitwood, the former county controller who is now serving in a variety of administrative positions as Mr. Neall reorganizes county government.

There are 39 active county employees paying into the pension fund, and 50 retirees are drawing pensions from it. Six others are no longer working for the county but are vested in the fund, although they are not yet drawing pensions.

Among the county's options in dealing with the fund for elected and appointed officials would be to merge it with the county employees' plan, which is funded at a healthy 161 percent.

Another would be to merge the fund with the state pension plan, as is done by most jurisdictions in Maryland.

The county auditor's office, which advises the council on fiscal matters, agrees that merging the pension funds would solve the problem.

"Leaving the appointed fund out there by itself, it is under-funded," said Teresa Sutherland, an assistant county auditor. And because the appointed and elected fund is so small and the county employees fund is so large, combining the two funds would have little detrimental effect.

The County Council will consider the bill to revamp the pension fund for appointed and elected officials at its regular meeting at the Arundel Center in Annapolis.

The council meeting begins at 7:30 p.m.

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