Arundel may reduce pension benefits, Curran says

December 31, 1993|By Dennis O'Brien | Dennis O'Brien,Staff Writer

Maryland Attorney General J. Joseph Curran Jr. said yesterday that Anne Arundel County may reduce pension benefits retroactively for appointed and elected officials due huge benefits.

Mr. Curran's opinion had been sought by state Del. Joan Cadden, D-Brooklyn Park, after county officials set out to reform the pension system, which has socked the county with a $14 million liability. Opinions from two private law firms had concluded that a retroactive repeal of benefits would be illegal.

County Executive Robert R. Neall was told by attorneys from Piper & Marbury, a Baltimore firm, Oct. 18 that pension benefits ++ promised to about 90 former and current employees could not be reduced or altered, said Louise Hayman, a Neall spokeswoman.

The county's Pension Oversight Commission obtained an opinion reaching the same conclusion from Steptoe and Johnson, a Washington law firm, on Nov. 12, Ms. Hayman said.

But in an eight-page letter to Ms. Cadden released yesterday, Mr. Curran said the county "isn't powerless" to change the plan retroactively.

Mr. Curran said the county charter and county code grant such power.

He also said that such changes would not violate recipients' constitutional rights nor would they be a breach of contract, as the private law firms had concluded.

"The county isn't powerless to change this plan, whether it's to reduce benefits or increase member contributions," Mr. Curran said. "The courts have upheld the authority of the government to modify or reduce employee benefits."

The county is facing a $14 million liability because of the generosity of previous county administrations in adopting a pension plan for the county's appointed and elected officials.

The plan was amended in 1989 to increase benefits and lower the retirement eligibility age for participants in the system, which also allowed state employees hired by the county to transfer all of their benefits into the county system.

Changes in 1989 lowered the minimum retirement age to 50 with 16 years of service and raised the benefits by 20 percent for appointed officials. Those changes have since been repealed, although not retroactively.

Most of the discussions about pension reform have focused on revamping future pensions.

But Delegate Cadden, a member of the Joint Committee on Pensions in the General Assembly, said she sought the opinion because she was convinced it should be made retroactive.

"It does open the door to an interesting perspective, doesn't it?" she said yesterday.

Ms. Hayman said last night that Mr. Neall would look into changing the system retroactively.

The County Council is scheduled to discuss the pension system at its Jan. 18 meeting.

Council members Maureen Lamb and David Boschert have proposed amendments recommended by the county Pension Oversight Commission to pay future benefits based on employee contributions rather than on years of service.

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