The Montgomery County Council passed legislation Tuesday that creates a trust fund to pay for retiree health benefits for employees of the county, Montgomery County Public Schools and Montgomery College. Previously, the funding came from three trust funds.
The change will save taxpayers money by cutting out some of the administrative fees necessary to maintain three funds, Councilman Hans Riemer, D-at large, said in a committee meeting.
It also will help maintain the county’s AAA bond rating by ensuring that retiree benefits are well-funded, said council Staff Director Steve Farber.
The bill — which was sponsored by all nine council members — will allow the council to ensure that money intended for future post-employment benefits is used for that purpose.
“There has been some concern in the past about whether the monies would actually go into the trust,” Farber said. Two years ago, the council tried to allocate $12 million to public school employees’ retiree benefits, he said, but the money didn’t make it into the trust. That wouldn’t be possible in the future.
Public schools Chief Operating Officer Larry Bowers said he is concerned that the terms of the trust fund are not well defined.
The legislation “was done so quickly without a great deal of discussion or dialogue,” he said. “We just have to make the assumption that when those dollars are needed … they will give them to us.”
But Councilwoman Nancy Navarro, D-eastern county, said the bill was not rushed to a vote.
“This bill went through the same process as all of our bills go through.”
