Retirees Express Worries About Health Care, Pension Changes

Dec. 23—CUMBERLAND — Changing the rules of the game for state retirees in Maryland’s effort to lasso and control massive deficits in the state’s retirement, pension and health care plans doesn’t sit well with Bill Bevan and Harry Grove, two retired state employees who live in Allegany County.

“How can you break these promises,” asked Bevan. Retirees are on a fixed income and “kind of entered into a contract,” when they went to work for the state, said Grove. “For them to come back now and say we’re going to change … that does not seem fair,” Grove said. Bevan worked in several state jobs and finished his career working in information technology. Grove worked for many years in supervisory capacities, including at the Department of Juvenile Services and in court services.

The Public Employees’ and Retirees Benefits’ Sustainability Commission has been tasked with finding a way to reduce billions in unfunded liabilities in the retirement and pension systems and healthcare systems for state retirees and employees. While many proposals remain on the table, the commission did, last week, nix one of the major reform proposals aimed at retirees. Why? Because the proposal on cost of living increases was deemed illegal. Attorneys looking at the proposal told state officials that a five-year freeze on cost-of-living increases for retired state employees was not acceptable, because the state is required to uphold agreements already made with state workers, according to The Associated Press. Other proposals which could affect retirees along with current state employees and those near retirement, haven’t been ruled out though. Those proposals include the cost of health insurance and the cost and types of retirement plans available.

Grove isn’t sitting back hoping for the best. He’s planning to organize fellow retirees in the area to make sure benefits aren’t cut. “I’m going to organize, circulate a petition and set up a meeting with the delegation,” he said. Grove wrote to Sen. George Edwards and Delegate Kevin Kelly a year ago when word of possible changes to retiree benefits first circulated.

A 35-year member of the Maryland Classified Employees Association, he has a list of area members available to help with his organizing tasks. “Our pay was always below the private sector,” Grove said, but that many state employees calculated in the certainty of a retirement plan when making a decision to accept state employment.

Bevan said that in a previous reform of the system, he chose to put 7 percent of his salary into retirement in exchange for unlimited cost of living increases. That the commission even considered changing that plan bothered him, he said. “They made commitments and promises in good times. Then they back out,” he said.

Plans to raise health care premiums are a special concern, said Bevan, an Allegany County resident. “I have prescriptions, and my wife has prescriptions. We’d be out of pocket thousands of dollars,” Bevan said about some of the proposals he’d read.

Kelly was concerned about current state employees as well as retirees.

“To change the pension and benefit guarantees of current state employees is unjust, unfair and simply wrong, wrong, wrong,” said Kelly on Wednesday. Backing out of commitments to current employees would “destroy state employee morale” he said.

Kelly said he didn’t have an issue with changing benefits for new hires, as long as the rules are set out clearly for everyone. “We don’t want to create a situation where Maryland state government employment is the government employment of last resort,” he said.

“Why are we moving so quickly? Why are we not waiting for the final report,” Kelly asked, responding to reports that the legislature will consider interim recommendations issued by the committee in the past few weeks. The commission’s final report isn’t due until June 2011.

The commission is looking for a way to slash state health care costs by 10 percent. The state is anticipated to be about $18 billion short over the next 30 years on expected pension and other retirement benefits payments, according to the Department of Legislative Services. Even in the next few years, the state will have to re-allocate funds to cover retirement benefits.

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