Maryland legislators’ decision to balance the budget by reducing funding to the state pension fund is totally irresponsible [“Raiding Md.’s pension fund,” editorial, March 15]. I am a retired Maryland teacher. Rhode Island has done for years what Maryland now is doing. And Rhode Island is paying dearly for its mistakes. Its pension systems are underfunded to the point that pensions of some retirees have been cut by as much as 50 percent. Try balancing your household budget with that cut.
This is absolutely the wrong way to balance Maryland’s budget. Haven’t our legislators been paying attention?
Andrew Humenay, Narragansett, R.I.
The March 20 editorial “Avoiding a budget sinkhole” obliquely referred to the poor investment performance of Maryland’s pension fund, which makes the proposed $75 million contribution cut trifling in comparison. Over the past decade, the fund has paid more than $2 billion to Wall Street money managers for “advice” on selecting stocks, bonds and other investments. D uring this time, the fund has underperformed its peer group by $3 billion. Measured against a passive index of stocks and bonds, the underperformance totals $4 billion.
Indexing the bulk of the portfolio would require just six to 12 months and provide $200 million in immediate savings to the government with no damage to investment performance.
Jeff Hooke, Chevy Chase
The writer is managing director of Focus Investment Banking.