ROCKVILLE, MD  (May 15, 2015) — The Maryland Public Policy Institute today praised Maryland Governor Larry Hogan’s new plan to help recapitalize Maryland’s chronically underfunded state employee pension system. The Maryland State Retirement and Pension System currently faces $20 billion in unfunded liabilities to state teachers, police officers, judges and other employees.  Governor Hogan announced Thursday he would dedicate $68 million to help shore up the pension system.

The (Baltimore) Sun reported in January that Maryland’s pension system “is now in worse shape than many across the country,” while Pew Charitable Trusts stated in 2012 that Maryland’s pension management was “cause for serious concern.” Recent studies show that U.S. state pension systems were 75 percent funded on average in 2013, while Maryland’s is funded at only 69 percent.

“Lost amid this week’s debate over education funding is the dire fiscal health of Maryland’s pension system, which teachers, police officers and others rely on for retirement,” said Christopher B. Summers, president of the Institute. “For years, Maryland’s legislators promised more in benefits than the state could afford and those promises are now coming home to roost. The Hogan Administration deserves credit for shining a light on the state’s chronic mismanagement of the system and for taking the lead in its restoration. Our teachers, police officers and other employees have been well served by their chief executive.”

In 2013, the Institute published, “Perpetual Shortfall: Maryland’s Pension and Benefit Funds,” one of the first comparative analyses of Maryland’s state and local pension and benefit funds. To read the report, click here.