County Budget Director Denounces Federal Court Ruling

Baltimore County's director of budget and finance is denouncing a federal court ruling that declared the county's pension system is discriminatory.

"From a strictly legal perspective, the County believes that the court misinterpreted the law, and from a practical perspective, its decision is incorrect," writes Keith Dorsey.

Dorsey's statement was published on a blog on the county government website this afternoon.

U.S. District Court Judge Benson Everett Legg ruled that the Baltimore County Employees Retirement System contribution rates for employees discriminates based on age.

The U.S. Equal Employment Opportunity Commission, which brought the suit in 2007, announced the decision Monday afternoon. The federal commission brought the suit on behalf of two county Department of Corrections employees.

The county made changes to its pension system in July 2007.

Employees hired after that date contributed to their pensions at a flat rate regardless of their age at the time of their hiring. Employees hired before that date paid into the system at a rate based on their age.

"Two employees with the same number of years until retirement eligibility—that is, the same pension status—do not necessarily contribute at the same rate," Legg wrote in his 10-page ruling. "Pension status, therefore, cannot be the driving factor behind the disparate treatment, which is directly linked to an employee’s age. As such, because age is the 'but-for' cause of the disparate treatment, the ERS violates the [Age Discrimination in Employment Act]."

But Dorsey said the EEOC suit "misstates and distorts the County’s retirement program, and allegations of discrimination are based on a fundamental misunderstanding of U.S. Supreme Court precedent and standard actuarial practice."

"Who in their wildest imagination could foresee that when the County provided a generous early retirement option for its employees in 1973 based upon years of service and not a set retirement age that the benefit would be characterized 39 years later as age discrimination?" writes Dorsey.

Dorsey said the courts over-reached and said county plans on appealing the decision.

"The court or federal agency should not be allowed to order County government to increase pension contributions for nearly 8,000 workers arbitrarily. If the court’s ruling were to be upheld (which we do not anticipate), County employees would have to repay millions of dollars in pension funding. Their paychecks would be decreased as a result of this decision," writes Dorsey. "That is simply wrong, and such action oversteps judicial and federal authority. The County will continue to resist the growing drumbeat to eliminate its defined-benefit pension plan in favor of a defined-contribution 401 K program."

Dorsey's blog post re-states comments made by Don Mohler, a county spokesman.

Mohler, in an interview Tuesday morning, vowed that the county would take the case "all the way to the Supreme Court."

"We're going to fight this until there is no one else to fight," said Mohler.