Letters

Pension plan helps contain city's costs

The Baltimore Sun's editorial on retired city police and firefighter benefits is wrong and incredibly mean-spirited ("A costly pension benefit," editorial, Oct. 23).

Let's start with some basics.

All city employees, except police and firefighters, earn for their years with the city both a city pension benefit and Social Security. Police and firefighters do not get Social Security benefits. The only pension benefits they get for their years with the city come from the Fire and Police Retirement System, which is funded in part by their own contributions.

Under this system, instead of getting cost-of-living increases annually in retirement like other city employees and most other workers in the country do, retired Baltimore police officers and firefighters only get an increase when the investment return from their retirement system is greater than the actuarial requirements for the year.

Even then, only a portion of the excess goes to the retiree pay increase. The city gets the benefit of the rest of that money to reduce its costs for that year or in future years.

This model has worked well for the city from a cost perspective.

In 2009, for example, Social Security retirees will get a 5.8 percent increase in their pension benefits. Retired police and firefighters will get no increase because their retirement system did not have excess investment returns for the year. Simply giving the police and fire retirees the same 5.8 percent increase Social Security retirees will get would have cost the city about $80 million.

To characterize the police and firefighter at risk benefits as a "gravy train" is simply wrong.

To suggest that these retirees bear the brunt of balancing the city's budget is mean-spirited. It is also inconsistent, unless The Baltimore Sun also supports cutting Social Security benefits to retirees to help balance the federal budget.

The editorial is also wrong about William Donald Schaefer's position on the issue. Mr. Schaefer, who was mayor at the time the variable benefit system was created, initially opposed it.

However, he eventually became a solid advocate of the variable benefit system, as is evidenced by the commendations he gave to me and others involved in creating it and by his strong support of it among retirees.

Robert G. Bolton, Baltimore