The state attorney general's office says Maryland can reduce state employe pension benefits despite a 1979 law that employe unions say guarantees there will be no changes for workers in the old retirement plan.
Senate President Melvin Steinberg, who has proposed pension changes, said yesterday he had not seen the opinion from the attorney general but that it held his bill to be constitutional. However, the attorney general's opinion did not carry much weight with union leaders.
"He's just one lawyer. Our attorneys tell us different," said Joseph Adler, head of the Maryland Classified Employees Association.
The General Assembly revised the retirement system covering state employes and public school teachers in 1979. Studies at that time said the pension fund was solvent but headed for serious financial trouble, and would almost bankrupt the state by the end of the century.
As part of a compromise with employe unions, the legislature wrote into the law a promise that anyone already in the retirement system could remain there "without change in the benefits" in effect as of Dec. 31, 1979.
Because benefits under the old plan are more generous, few state workers and teachers have switched to the new plan.
A key feature of Steinberg's bill would allow current employes to keep the benefits they have already earned under the old plan but require them to switch to the new plan beginning in 1984.
It would, in effect, create a dual system for the old employes, with part of their retirement benefits based on the old plan and part on the new plan.
Steinberg argues that he isn't violating the 1979 guarantee because all existing benefits will be protected. He said the attorney general's advice is that the bill would be legal, even if it did change benefits, if it is necessary to protect the state's financial position.
Steinberg offered a minor compromise yesterday when he agreed to make the bill effective in 1984 instead of this year, to give the legislature one more year to look for a better alternative.
House leaders have not taken the strong position of Steinberg, and Gov. Harry Hughes also has been more cautious, although he and House leaders say something needs to be done to reduce the amount of money the state is required to contribute to the pension system each year.