Baltimore County employees decried proposed retirement plan changes, described by a government official as necessary to maintain the county?s stellar bond rating.
Labor unions met Wednesday to discuss the proposed changes, which affect all employees except teachers, firefighters, police officers, department heads and elected officials. Changes, including raising the retirement age from 60 to 65 and cutting post-employment benefits for future personnel, were highlighted in a countywide e-mail from finance director Fred Homan.
Homan, citing a Jan. 31 editorial that appeared in The Examiner, attributed the changes to a new federal law requiring governments to fund future retiree health and life insurance benefits on an accrual basis ? estimated as a $2 billion county liability.
“If the county were to fail to take any action, the county would jeopardize its AAA bond rating and be forced to pay higher interest on its bonds or curtail necessary capital expenditures,” Homan wrote. “Taxpayers could not be expected to accept either of these results.”
Citing negotiations, county officials declined to elaborate on the proposal. About 60 confused, concerned members of the Baltimore County Federation of Public Employees crammed into a county meeting room to discuss the changes Wednesday. Several said they believe the changes will lower employee morale or discourage qualified job candidates from applying, and questioned why county brass is excluded. Union President Jim Miller said bond companies have not taken a position on the new federal law. He said changes in health benefits also are likely.
“They don?t understand how much it hits the general employee,” Miller said. “For us, anything we give up is a drop in the bucket for them.”
Under existing policy, general employees can retire after 30 years of service or at age 60 and are vested in the mandatory retirement system after five years. According to the proposal, the minimum age for existing employees will become 65. The 30-year allowance will stand and employees between 60 and 65 at the end of June will be grandfathered.
For employees hired after July, normal retirement eligibility will become 35 years of service or age 67 after 10 years of service. The county also is proposing a new deferred retirement option plan, or DROP, that would allow eligible employees who elect to work at least an additional five years beyond minimum retirement standards to accumulate their contributions in an interest-bearing account.
