In her latest column, "Maryland's debt bomb" (Dec. 5), Marta Mossburg cites a report by the State Budget Solutions that Maryland's "pension obligations to state employees are about $48.2 billion." Ms. Mossburg and other critics of defined benefit plans continue to make such erroneous assertions by calculating public pension liabilities using economic assumptions and financial theory that comport with neither historical experience nor accounting standards endorsed by the Government Accounting Standards Board, the Government Accountability Office, or any other credible accounting or actuarial authority.
The state pension system is actually 64.4 percent funded with an unfunded liability of $20.6 billion, as of June 30, 2012. Although this funding level is not as strong as it should be, reforms enacted in 2011 will strengthen that funded ratio over the coming years.
Once again, Ms. Mossburg chooses to ignore these pension reforms that require state employees and teachers to contribute 40 percent more to their retirement; reduce benefits for service earned after June 30, 2011; increase vesting for new employees from five to 10 years; and reduce the annual cost of living adjustment for service earned on and after July 1, 2011. With these reforms in place and the reinvestment of resultant savings, the system is on track to be 80 percent funded within 10 years and 100 percent funded by 2031.
R. Dean Kenderdine, Baltimore
The writer is executive director of the Maryland State Retirement and Pension System.Copyright © 2015, The Baltimore Sun