Friday, October 29, 2010

Freezing pensions and switching to defined contribution plans not a panacea for public employees

R. Dean Kenderdine, Executive Director of the Maryland State Retirement and Pension System, has an important Letter to the Editor of the Washington Post on Friday, Oct. 29, “Wrong ‘fix’ for Md. Public pensions”, link here. He argues that switching to a defined contribution plan for new employees does not completely fix the funding problem, because it denies the older defined benefit plan future contributions and can cause it to have to liquidate assets.

He gives a useful link to the Maryland Public Employees’ and Retirees’ Benefit Sustainability Commision.
 
The writer refers to an Oct. 13, 2010 Washington Post Editorial, “Maryland’s Silent Tsunami: Martin O’Malley and Robert Ehrlich stay mum on massive pension bill”.

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