Council may trim officials' retirement pay, aid pension fund

July 18, 1994|By John Rivera | John Rivera,Sun Staff Writer

The County Council is scheduled to vote tonight on a bill that would reduce the pension benefits of appointed and elected officials if they wish a surviving spouse to continue receiving benefits.

Under current provisions of the financially troubled pension fund for appointed and elected officials, surviving spouses continue to receive the full monthly benefit until they die.

A 1989 law passed by the County Council that increased benefits for appointed officials and lowered the retirement age for all plan participants was a major factor in creating a $14 million liability in the pension fund.

Service transfers from the state also drained money from the plan. Under state law, officials may transfer their accumulated years of service from a state or local government but do not have to transfer pension assets.

The bill to reduce death benefits, sponsored by Council members Diane Evans of Arnold and David G. Boschert of Crownsville, would reduce the monthly benefits for an official during his or her lifetime in return for continuing payments to a spouse after death. The amount of the reduction would be actuarily determined based on the official's age and the percentage of the full benefit the surviving spouse would receive upon the official's death.

The county's actuary, W. F. Corroon, estimates the changes would save the county $1.61 million.

County officials discovered even more savings to the appointed and elected officials plan when an audit conducted by the personnel office found errors in calculating either the length of service or the amount of benefit for 14 plan participants. There are 95 current or former officials participating in the plan.

Adjusting the pensions, which is to take effect Sept. 1, would save about $75,000 the first year, with a projected decrease of $800,000 in the county's pension benefit obligations.

Some of the miscalculations were very minor, such as officials receiving service credit from the date they were hired instead of the date they entered the pension plan.

The audit, which was conducted by Hilton Wade, the county's benefits coordinator, was complicated by the fact that 14 bills have been passed by the County Council since 1973 changing the provisions of the pension fund.

A bill passed last year froze officials' benefits in the pension fund and established a plan for future officials that pays benefits based on employee contributions rather than years of service.

A public hearing also is scheduled for a bill creating a commission that will designate scenic and historic roads in the county.

The meeting is scheduled to begin at 7:30 p.m. in the council chambers at the Arundel Center in Annapolis.

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