Days after announcing his impending resignation, Baltimore County Auditor Brian Rowe said he plans to file a lawsuit against thecounty for allegedly violating state law and shortchanging his and other employees? pensions.
The county is deducting too much from the pensions of employees who used to work for other governments with noncontributory plans, Rowe said. The 60-year-old auditor estimated his losses at $87,000 during the course of his retirement. Rowe, who served 18 years as chief financial officer for the Maryland State Retirement and Pension System before his 12-year county stint, said his plans to sue accelerated his resignation.
“It would be unethical for me to continue as auditor while I?m actively engaged in litigation to compel them to comply with state law,” Rowe said.
But Rowe could face ethics charges for urging County Council members to adopt a change that would fix the discrepancy without disclosing his personal benefit.
Rowe told council members the bill had no financial impact on the county ? a fact he maintains because employees are only getting what they are owed. But county administrators said a change could cost millions of dollars.
“Even though Mr. Rowe has only worked for 12 years for Baltimore County, his pension will be $120,000 a year,” a source close to the administration said. “We find it rather amazing that someone who has such a generous pension would have tried to mislead the council so that he would get another $6,000 or $7,000 dollars a year on top of that.”
THE DISPUTE
Rowe points to a November 2006 opinion from then-Attorney General Joseph Curran that suggests the county is incorrectly calculating some employees? pensions. State law allows employees who transfer to the county, and its contribution-based pension system, from other governments with noncontributory systems to bring their retirement plans with them.
The county can reduce the pension by the amount the employee would have contributed during his or her service in the noncontributory system, plus 5 percent interest compounded annually. The county is adding 8 percent interest compounded monthly.
“Our opinion is that they should be paying the regular rate of interest,” said Raquel Guillory, a spokeswoman for the Attorney General?s Office. “If they pay their other employees 5 percent, that?s the regular interest.”
That opinion is nonbinding and wrong, said Fred Homan, director of the county?s budget and finance office, who estimated that between 141 and 220 employees transferred from noncontributory systems.
Homan maintains state law does not specify the interest rate and said county attorneys, actuaries and even a 1998 report penned by Rowe support current methodology. Rowe said he did not know the calculations violated state law at the time.
“All of these things have happened saying this is right, this is the way it should be, this is equitable,” Homan said during a conference call with other county officials.
Thinking that the call had ended, an official in the room said, “Can you believe it? [Homan] actually is making [reporters] believe this.”
