Pension report costs city nearly $100,000

March 11, 2010|By Julie Scharper |

The city spent nearly $100,000 on accounting costs for a report recommending ways to slash costs from the fire and police pension plan.

The pension, one of the city's thorniest economic issues, could plunge the city into financial disaster - adding as much as $64 million to the city's $127 million deficit - if it is not remedied by the next budget year.

In June 2009, Mayor Stephanie C. Rawlings-Blake, who was then City Council president, asked the Greater Baltimore Committee to lead a task force to examine the pension and suggest cost-cutting measures.

A team of 20 investment experts volunteered to examine the pension plan and drafted a theoretical plan that could chop the city's contribution to the pension in half. But, said Greater Baltimore Committee President Donald Fry, they were not equipped to calculate costs for the pool of retirees, and requested the services of the pension board's actuary, Mercer.

The city's spending board approved a $92,000 charge Wednesday from Mercer.

Rawlings-Blake said she had anticipated that there would be costs associated with the report.

"We need to make important decisions and that's not free," the mayor said. "The money that the city spent will pale in comparison to that which will be saved."

The administration is expected to propose legislation to reform the pension plan in the next couple weeks.

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