Baltimore Mayor Sheila Dixon has withdrawn a pension reform bill that would have stripped a lucrative post-retirement benefit from the financially troubled fire and police pension plan and was opposed by the city's public safety unions.
"We're looking for a bigger fix for the system," Dixon's spokesman, Scott Peterson, said. The Administration plans to make more comprehensive changes to the $1.677 billion pension system.
The bill's withdrawal was applauded by the city's police union chief, who said that the unions now can also "look at the bigger picture" and suggest broader reforms to the pension system.
"We have to look at the systemic problems," said Robert F. Cherry, the head of the police union.
Recent stock market drops plus earlier tech stock losses mean the city's annual contribution to the fire and police fund is growing at an "out of control" rate, Dixon has said.
The city will pay $82 million into the fire and police fund in July. Next July the city may be asked to pay $110 million - an amount that is three and a half times the current operating budget for the city's Department of Recreation and Parks.
The legislation Dixon withdrew would have removed a provision that gives all pensioners a permanent bump in payments in years when the pension fund preforms well - a so-called variable annuity. In years when the market preforms badly, like this year, there is no increase.
