Council Approves Borrowing Nearly $260M For Pension System

County officials say borrowing the money will save county taxpayers $260 million in pension costs over the next 30 years.

Baltimore County will borrow up to $260 million for its pension system under a plan approved unanimously Monday by the Baltimore County Council.

The proposal was part of a two-bill package approved by a 7-0 vote.

The borrowed money is needed because the board of the Baltimore County Employees Retirement System voted to reduce its expected rate of return on investments. That change, made in July, would result in an additional $15 million payment from the county next year.

"That amount would grow to a much larger level over the next 30 years," said Keith Dorsey, the county's budget and finance director.

Without the change, county officials estimate that it would have to contribute $4.8 billion to the retirement system.

With the change approved by the council, the county estimates it will now have to contribute $4.1 billion over the same time period. The county expects to save more than $260 million after factoring the more than $499 million in principal and interest payments on the bonds, Dorsey said.

Of course, all of that is predicated on the county earning more on its investments than the nearly 4.25 percent interest. If those assumptions are wrong, the county could lose money and taxpayers could end up footing the bill.

A second bill added increased pension contributions recently negotiated by the union representing corrections officers. The bill also granted a death benefit to adult children of retirees with at least 15 years service to the county. Previously, only minor children of those employees were eligible for the benefit.

BlutAusNord October 16, 2012 at 06:42 PM
This is unbelievable.Kamenetz & Homan are the biggest thieves in the county.Morale among county workers is at it's lowest,no cost of living raises for the forseeable future,rising health car costs.Now they have GPS in the vehicles that cost almost $500,000 a year.They have been hiring part time employees in areas where they would be otherwise full time.Kamenetz looks to destroy the pension sysyetm that he should keep his filthy little paws off of.People who have already retired from the county have already said they are waiting for the day when their benefits will decrease because of the mess that The county doofus & his loyal boyfriend are dragging the pension into.
BlutAusNord October 16, 2012 at 06:50 PM
Kamenetz is a lap dog to O'Malley who is a lap dog to Obama.These thieves have never met a dollar of someone else's money that they wouldn't take.The money belongs to the people who put it there,not you leeches.
Bill Howard October 17, 2012 at 03:41 AM
The Council looked at these pension costs about 20 years ago. Councilman Mason and I predicted that the County would have to borrow or tax to meet the obligations. Borrowing 260 million will effect our taxes as well. Now the really bad news. The problem is not solved. They will be back.
Matt October 18, 2012 at 02:18 PM
The county's pension fund is actually in pretty good shape compared to many jurisdictions. However, I feel that borrowing from the fund ($25m for the recycling plant) is only the beginning of the decline....
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