Maryland public pensions
| ||||||||||||||||||||||||||||||
 |
| National Taxpayers Union |
| Action center |
Maryland public pensions fall under the Maryland State Retirement and Pension System, a $33.7 billion public pension system.[1] Maryland's pension fund is 65% funded, and Moody's has called it a "credit challenge."[2]
Maryland has 93,930 total public employees as of 2010.[3] In Fiscal Year 2010, the state has a total of 252,860 active and inactive pension fund members, with 117,380 receiving periodic benefit payments. [4]
Maryland’s cost to fund the pensions for some 105,000 current and retired educators has soared to nearly $1 billion annually.[5]
A recent study by economists Joshua Rauh of the Kellogg School of Management at Northwestern University and Robert Novy-Marx of the University of Chicago Booth School of Business concluded that the Maryland pension fund will run out of money in 2023.[6]
According to the United States Census Bureau, the state has 14 locally-administered pension systems.[7]
Public Pensions
| Plan | Current Value | Percentage funded | Unfunded liabilities | Total state employees | Avg. pension |
|---|---|---|---|---|---|
| Teachers' Retirement System [8] x | $22.7 billion | 66.3 percent | $11.1 billion | 105,528 active members | $17,800 |
| State Employees' Retirement System [9] | $12.8 billion | 62.8 percent | $7.3 billion | 85,453 active members | $20,364 |
| State Police Retirement System [10] | $1.17 billion | 62 percent | $669 million | 1,295 active members | $ |
| Judges' Retirement System [11] | $303 million | 67.8 percent | $139 million | 286 active members | $ |
| State Law Enforcement Officers' Pension System [12] | $547 million | 52.5 percent | $476 million | 2,411 active members | $ |
Funding levels
| Latest liability | Latest unfunded liability | Annual required contribution | Latest actual contribution |
|---|---|---|---|
| $50,561,824 | $10,926,099 | $1,208,497 | $1,077,796 |
| Latest liability | Latest unfunded liability | Annual required contribution | Latest actual contribution |
|---|---|---|---|
| $14,842,304 | $14,723,420 | 41,086,240 | $390,319 |
| Number of pension plans | Pension assets ($bn) | Stated liabilities ($bn) | Funding status (% of tax revenue) |
|---|---|---|---|
| 1 | $27.8 | $50.2 | -400% |
This data is based on projected data from 2008 census data.[14] In 2008, $1.94 trillion was set aside for pensions, but it is estimated that states have $5.17 trillion in unfunded liabilities.
Research conducted by State Budget Solutions shows the extent to which the state has funded or underfunded its Annual Required Contribution:[15]
| Maryland Public Pension Contributions | |||||
|---|---|---|---|---|---|
| FY 2002-2011 Total Annual Required Contribution | $9.9 billion | ||||
| FY 2002-2011 Actual Contributions | $8.2 billion | ||||
| Difference | -$1.7 billion | ||||
Rate of return
Maryland presumes a 7.75% return rate on its pension investments.[13]
At the close of FY2010, the ten year average rate of return was 2.10 percent. It posted preliminary returns of 20.04 percent for fiscal 2011, raising the 10-year return to 5.01 percent. [16]
Employee contributions
In the FY2012 state budget, employee contribution to the pension system was raised from 5% to 7% of their salaries.[17]
Eligibility
The FY2012 budget will raise the retirement age for new hires from 55 to 60 and increase the vesting period from five to 10 years. The budget also included the implementation of a "Rule of 90" that requires a retiree's age plus years of service to be at least 90.[17]
The state pays the entire cost of county teacher pensions.[18]
Local public pensions
- Main article: Local government public pensions
According to the United States Census Bureau, the state has 14 locally-administered pension systems.[7]
Transparency
- Main articles: Public pension disclosure and Governmental Accounting Standards Board
Data availability
Information is available on the pension fund's website.[19] Available information includes investment and other financial reports, legislation that may affect policies, member forms, and more.
Names of recipients are available under the state's Freedom of Information Act.[20] Amounts disbursed to recipients are available under the state's Freedom of Information Act.[20]
Fund performance data
Quarterly investment fund performance reports are available.[21]
Rate of return
The assumed rate of return is listed on each year's Comprehensive Annual Financial Report.[22]
Unfunded liabilities
Unfunded liabilities are disclosed in the actuarial section of the fund's Comprehensive Annual Financial Report.[22]
Oversight
State law does not directly mention the public pension system in regulating pay-to-play or gift exchanges involving pension managers and board members. However, gifts and exchanges are regulated by the pension system's rules, and pension managers and board members are required to file regular asset disclosure forms.[23]
An external auditor's report, conducted by SB & Company, LLC, is included in each year's Comprehensive Annual Financial Report.[22]
See also
- Public pensions
- Maryland state budget
- Maryland state government salary
- Maryland state pension gap grows to $17.5 billion
- MD Commission Recommends More Work for Retirement Benefit Eligibility
- Ten cities facing the worst of the pension crisis
External links
- Maryland State Retirement and Pension System
- Maryland State Pension Fund Management - State Integrity Investigation
References
- ↑ The Baltimore Sun "A pension primer" Oct. 4, 2010
- ↑ The Washington Post "Amid backlash and budget deficits, government workers' pensions are targets" Oct. 6, 2010
- ↑ 2010 Annual Survey of Public Employment and Payroll, Census 2010
- ↑ 2010 Annual Survey of Public Employment and Payroll--Membership by State, Census 2010
- ↑ The Washington Post "Governor O’Malley’s budget raises taxes on Maryland’s high-earners" Jan. 17, 2012
- ↑ New Mexico, Study: NM state pension plan will run out of money in 13 years, Sept. 9, 2010
- ↑ 7.0 7.1 "Public Employee Retirement Systems State- and Locally-Administered Pensions Summary Report: 2010", United States Census Bureau, April 30, 2012
- ↑ 2011 MRS CAFR
- ↑ 2011 MRS CAFR
- ↑ 2011 MRS CAFR
- ↑ 2011 MRS CAFR
- ↑ 2011 MRS CAFR
- ↑ 13.0 13.1 13.2 Pew Center on the States "The Trillion Dollar Gap" Feb. 2010
- ↑ Northwestern University, The Liabilities and Risks of State-Sponsored Pension Plans, May 2010
- ↑ State Budget Solutions, "How States Underfund Public Pensions," November 2, 2012
- ↑ Bloomberg "States Miss Pension Targets by 50% Even With Private Equity" July 28, 2011
- ↑ 17.0 17.1 The Herald Mail "Part of Maryland pension hike to go toward balancing state budget" April 14, 2011
- ↑ The Washington Post "Gov. O’Malley: Tax increases may be needed in Md." Aug. , 2011
- ↑ State Retirement and Pension System
- ↑ 20.0 20.1 Public Pension Disclosure, Sunshine Review
- ↑ Investment
- ↑ 22.0 22.1 22.2 CAFR
- ↑ Maryland State Pension Fund Management, State Integrity Investigation
Public pensions | |
|---|---|
| Pension context |
Public pension eligibility • Public pension disclosure • State government pension liabilities |
| State public pension systems |
Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming |
