State Fact Sheet
The Trillion Dollar Gap: Maryland
Underfunded State Retirement Systems and the Roads to Reform
Maryland's management of its long-term pension liability is cause for serious concern and needs to improve how it handles its retiree health care and other benefit obligations. As recently as 2000, 101 percent of the total pension liability was funded—well beyond the 80 percent benchmark that the U.S. Government Accountability Office says is preferred by experts.
But at the end of fiscal year 2008, the Old Line State had dropped to a 78 percent funding level. The sharp decline coincides with a drop in the state's annual contributions, falling to just over 81 percent of the actuarially required amount in 2007. Contributions began to rise in 2008 but still failed to exceed 90 percent of the required amount. Meanwhile, Maryland has a $14.8 billion bill coming due for retiree health care and other benefits.
The state is one of 29 with any assets set aside to cover this long-term cost, but only $118.9 million—less than 1 percent of the total—has been funded.