The Montgomery County Councilwoman who oversees fiscal policy matters has asked her staff to determine how high numbers of retired police officers receiving work-related disability payments is damaging Montgomery’s pension fund.
Two weeks ago, Montgomery County Executive Ike Leggett called for reform in how the county administers payments for retirees with work-related disabilities. Leggett said a task force he created found that nearly 40 percent of recently retired Montgomery County public safety workers, including police, firefighter, emergency medical service, corrections and sheriff’s department retirees, were receiving extra pay for work-related disabilities.
In comparison, only 3 percent of similar retired workers in nearby Fairfax and 24 percent of those in neighboring Prince George’s County were receiving extra retirement pay for work-related disabilities.
Next month, Montgomery’s Inspector General Tom Dagley is expected to release a highly critical report of his own about the county’s oversight of the disability retirement system. Council Vice President Phil Andrews said a preliminary version of the report showed more than half of police officers who retired in the past three years are receiving work-related disability payments.
“I’ve asked senior staff to figure out how this relates to the overall stability of our retirement plan,” said Montgomery Councilwoman Duchy Trachtenberg, who chairs the council’s management and fiscal policy committee. “We have to protect the integrity of the pension fund itself.”
Trachtenberg said she is worried that the county is only funding about 80 percent of its retirement liability this year, and that pension funding is shrinking while more and more people are requesting disability payments when they retire.
“We’re not keeping up,” Trachtenberg said. “We are robbing Peter to pay Paul. That is troubling to me, and that is not wise fiscal planning.”
A copy of the 2007 actuarial valuation for the Montgomery County Employees’ Retirement System shows the fund’s assets are $2.5 billion, or 79.7 percent of the fund’s $3.1 billion liability. In 2000, Montgomery County employee pensions were almost 99 percent funded.
Patrick Lacefield, county executive Leggett’s spokesman, said the changes have more to do with the stock market and improved retirement benefits for workers than problems with the county’s retirement system.
Ryan Francis, communications director for the National Conference on Public Employee Retirement Systems, said having 80 percent of pension liability funded is on the low end of the target range for public systems.
“That level of funding is by no means a crisis situation,” Francis said.
