Pension problems require quick attention

Benefits: Stay on prudent investment course, but put more money into state retirees' checks.

November 12, 2001

ANYONE WITH a 401(k) plan had a one-word reaction to news that Maryland's pension fund is down.

"Duh."

Of course it's down. Everything on Wall Street is down.

But that shouldn't completely dismiss concerns about the state's investment strategies.

An analysis of Maryland's performance finds it lags behind just about every other state. Treasurer Richard N. Dixon dismisses this finding because, he says, the analysis doesn't disclose which funds were studied. He has a point - but a limited one.

If this state ranks at the bottom of 38 states by any measure, it can't be doing everything right.

Why not look at the study and pull out ideas that might work here? Reject the rest, but don't turn a blind eye.

Some are suggesting that Maryland needs an expert consultant, a suggestion Mr. Dixon also rejects.

He and others in the system say in-house expertise has taken the system to good health over the last few years - proven by the fact that it is fully funded nearly 20 years before it was predicted to be.

The only thing necessary now, according to Mr. Dixon, is fortitude to ride out a bit of turmoil on Wall Street. History would show the treasurer is right, but every responsible steward of this $30 billion fund should be ready to change course when that seems prudent.

What seems most distressing, moreover, is the setback for improving Maryland's level of pension benefits. This state's retiree allowances rank near the bottom among the states on that score, too. Something must be done to start raising this benefit.

Now, legislative leaders have an obligation to get involved, to learn just how the pension trustees plan to improve the system's benefits, and whether anything in the critical report might help Maryland in the long run.

They must remind Mr. Dixon that it's the state's retirees - not his personal pride - that need the most protection in this situation.

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