The State of Maryland’s pension system is actuarially unsound to the tune of about $32 billion. When you hear a stat like that, the next natural thing to do is to look at the pension plans in the system. The plan for legislators, for example, is far more generous than most offered in the private sector, especially since it includes a defined benefit. By comparison, fewer than 5% of private sector companies offer defined benefit plans. It is also more generous than the plan we offer other state employees and teachers.
Delegate Bill Frank (R-District 42) has suggested that we move to a defined contribution plan instead. I think he has a great idea for two reasons. First, it could save the state $700,000-$1,000,000 every year. Second, in these tough fiscal times, the State must address looming and growing obligations such as pension funding. A debate on Delegate Frank’s plan will take place on the House floor tomorrow and I will be supporting his plan.
