Homan Testifies on County's Pension Surprise

Baltimore County Administrative Officer Fred Homan is scheduled to appear (before the House Appropriations Committee Tuesday to testify in favor of a bill that would reduce pension benefits to some county employees and retirees.   

The bill was not part of County Executive Kevin Kamenetz's legislative package that was announced last month. Indeed, the legislation was introduced by Del. Adrienne Jones about three weeks ago without any announcement by the county.

The introduction of the legislation follows a Harford County Circuit Court decision involving provisions governing how the county credits employees in the pension system for their service in state government.

Currently, state law limits how much the county can reduce an employee's pension payments for state government service that didn't require contributions from the employee.

Brian Rowe, a former county auditor, and another employee each sued the county separately over the county's attempt to reduce their pension payments by the amount of the missed contribution payments plus nearly 8 percent interest compounded monthly.

In the Rowe case, the county lost and is appealing.

Following the May decision, the county also attempted to have Virginia Barnhart, a Towson-based lawyer and former county attorney, disqualified from representing Rowe and other county employees. In October, a .

Barnhart declined to comment on the pending legislation because of ongoing litigation with the county.

The bill also comes just months after county officials were criticized for opting into a pension loophole that will allow Kamenetz and former Councilmen Vince Gardina and Sam Moxley to defer their council pensions and remain in the county pension system while earning credit for their new jobs.

The bill appears to affect at least 150 county employees and retirees who worked for government entities—such as the state, Baltimore City and Harford County—that had pension plans that did not require the employee to contribute toward their own retirement.

Baltimore County has a system that requires employees to contribute 100 percent toward their own retirement. The county invests the money and pays a 5 percent interest rate compounded annually.

Under current state law, government employees who move from a non-contributory system to a contributory system must be given credit for their time served. The law then allows the county to reduce the final pension payment to account for the payments that the employees never made into the system plus 5 percent interest compounded annually.

The county wants to be exempted from that system and allowed to deduct higher rates of interest compounded at a monthly rate—an amount that could as much as double the deductions the county could take from retirees under the current law. 

The change, if approved, would affect current employees and those who retired after July 1, 2007.

So far the county has been silent on the bill.

Don Mohler, a county spokesman, stressed the importance of the bill to the county in a brief interview last week.

Mohler said the change could save the county as much as $400,000 annually (assuming that all the affected employees ultimately retire from the county at the same time).

That $400,000 in savings is in addition to the deductions the county is already allowed to take under current law.

Mohler referred additional questions to Homan and said the county administrative officer would respond via email.

Late Monday, Mohler said such a response would not be forthcoming but said Homan's testimony before the committee should provide the necessary information.