Agenda Item 24
May 26, 2011
May 24, 2011
Robert H. Drummer, Senior Legislative Attorney
Expedited Bill 11-11, Personnel- Retirement Plans - Contributions
Expedited Bill 11-11, Personnel Retirement Plans - Contributions, sponsored by the
Council President at the request of the County Executive, was introduced on April 5, 2011. A
public hearing was held on April 26 at 7:30 p.m. and a Government Operations and Fiscal Policy
Committee worksession was held on April 25.
Bill 11-11, as introduced, would increase member contributions by 2% of salary in the
Optional and Integrated defined benefit plans of the Employees' Retirement System (ERS) and
decrease employer contributions by 2% of salary in the defined contribution Guaranteed
Retirement Income Plan (GRIP)l and the Elected Officials' Plan of the Employee's Retirement
System and the Retirement Savings Plan (RSP). This Bill is necessary to implement the
Executive's FY12 Recommended Budget.
The Executive estimated the FY12 savings from
increasing the ERS member contributions by 2% in the defined benefit plans to be $6,044,180.
The Executive estimated the FYI2 savings from reducing the employer's contribution to the
defined contribution RSP and GRIP by 2% to be $4,860,290. See ©9.
The Bill would take effect on July
2011 for all County employees, except elected
officials. The Bill would take effect for elected officials on the first day of their next term of
office. Article III, §35 of the Maryland Constitution prohibits an increase or decrease in
compensation during a term of office for an elected official. The State's Attorney, the Sheriff,
the Executive, and the Councilmembers are all elected officials serving a four year term of office
Although the GRIP is a cash balance hybrid plan, we are considering it a defined contribution plan in this
discussion because the employer's contribution as a percentage of salary is fixed.
The arbitration awards in favor of the International Association of Fire Fighters (IAFF) and the Fraternal Order of
Police (FOP) include no changes to the current retirement plans for fire fighters and police officers. The arbitration
award in favor of Municipal and County Government Employees Organization (MCGEO) contains a similar one
year 2% reduction of the employer contribution to the RSP and GRIP and a one-year reduction in the employer
contribution to the defined benet)t plan with the members not earning service credit for FYI2. The Executive did
not recommend these retirement provisions in his FYl2 Recommended Budget. The Council adopted resolutions
indicating intent to reject the retirement provisions in the 3 collective bargaining agreements on May 9.