How Maryland Can Cut Pension Liabilities and Attract Top Talent to the Public Sector

Jul 24, 2018

ROCKVILLE, MD (July 24, 2018) — With Maryland’s State Retirement and Pension System $19.7 billion in the red, a new report urges Maryland to offer public employees benefits that today’s top talents desire, such as family-friendly policies and career-related benefits, as opposed to antiquated pension systems that Millennials consider largely irrelevant. Doing so would help shore up the existing pension system, which serves 400,000 current and former state employees and help to attract top young talent to the public sector workforce. A full report can be found at


“Maryland must offer new benefits for a new generation of public sector employees,” said Christopher B. Summers, president and chief executive officer of the Institute. “Government has not kept pace with private sector employers like Google and Starbucks that meet their workforce’s needs with perks that reduce turnover and improve worker productivity. To move forward, it is imperative that the taxpayers’ money be used more efficiently, and not to finance outdated pension benefits.”  


“Maryland cannot expect to attract an exceptional twenty-first century workforce by offering twentieth century benefits,” said Senior Policy Analyst Carol Park, author of the report. “Maryland needs to start offering cost-effective benefits that pay for themselves while reducing dependence on a cash-strapped pension system.”


The report urges Maryland to consider adopting a wise combination of several non-traditional benefits in place of the traditional pension benefit:


Tuition Reimbursement

According to Deloitte, 71 percent of U.S. employers offer tuition assistance to their employees. Research suggests that these tuition reimbursement programs more than pay for themselves by reducing turnover since the majority of employees who participate in those programs are more likely to stay with their current employer. In order to compete for top young talents, Maryland should consider adopting similar tuition reimbursement programs for qualifying employees.


Flexible Work Hours

Millennials value the ability to work remotely and have control over their schedule. Thirty-five percent of millennials say they value schedule flexibility over pay. Maryland should emulate leading private sector employers across the country by offering flexible work hours and remote work options as a strategic tool to enhance their competitiveness as employers. According to research, such reform would also help reduce congestion on roads and increase worker productivity.


Mortgage or Housing Assistance Benefits

Millennials are increasingly putting off homeownership because of their student loan repayment burden and the cost of purchasing a single-family home has risen in relation to incomes. Maryland is one of the top 10 states with the highest average mortgage debt, at $256,744 per household. Private sector employers have recognized the need to provide their employees with financial assistance to help purchase homes. Maryland should consider adopting similar housing or mortgage assistance programs for its public employees.


The Institute has published extensive findings on Maryland’s chronically unfunded pension systems. Learn more at


About the Maryland Public Policy Institute: Founded in 2001, the Maryland Public Policy Institute is a nonpartisan public policy research and education organization that focuses on state policy issues. The Institute’s mission is to formulate and promote public policies at all levels of government based on principles of free enterprise, limited government, and civil society.  Learn more at