Governor Larry Hogan announced the State Retirement Choice Act for the 21st Century Workforce, legislation that will restructure and protect Maryland’s current underperforming employee pension system. The proposed legislation will allow the state to begin paying down the unfunded liability in the current pension system while creating a sustainable retirement system that will serve state employees into the future.
The State Retirement Choice Act for the 21st Century Workforce creates an optional defined contribution retirement savings plan for state employees. Under the new plan, both employees and the state would each contribute 5 percent to the employee’s individual retirement account. Like other states, new state employees will have the option of choosing between the existing defined benefit pension plan or the new defined contribution plan. Due to IRS regulations, the new plan is not available to current state employees, and teachers are not included in the legislation.
“Protecting the integrity of our pension system and keeping the promises made to our hardworking state employees will always be a priority of this administration,” said Governor Hogan. “This legislation will safeguard pension contributions and create a long-term and stable structure that will meet the needs of retired, current, and future state employees.”
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