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County retirees and CAO urge caution on Bill 28-24, saying it would shift actuarial authority to trustees
Summary
At a Jan. 27 public hearing, county retirement officials, retirees and the chief administrative officer urged Montgomery County Council not to transfer actuarial authority from the CAO to the Board of Investment Trustees, saying the change could weaken internal controls and raise conflicts of interest.
Council held a public hearing Jan. 27 on Bill 28-24, which would change who selects the actuary and sets actuarial assumptions for Montgomery County’s employee retirement plans.
Rich Maddalino, Chief Administrative Officer, testified on behalf of the County Executive that the county’s retirement system is “well regarded” and urged the council to let a recently negotiated memorandum of understanding between the CAO and board chairs operate before altering the law. He said those agreements accomplish many of the reform goals cited in oversight reports and warned against making permanent statutory changes while the MOU is in effect.
Linda Herman, former executive director of the county retirement plans and now a trustee representing county retirees, told the council trustees lack the actuarial expertise and meeting frequency to set assumptions without risking fiduciary violations. “The BIT does not have the expertise to set actuarial assumptions,” she said, warning that shifting authority could create conflicts for trustees who are plan participants.
Sarah Harris, president of the Montgomery County Retired Employees Association, said the retirement funds previously ranked in the top 10% of peers and that recent governance shifts have coincided with lower investment performance; she urged preserving a shared-responsibility model and greater transparency, including online archiving of board meetings.
Mary Beck, a county retiree and former Office of Management and Budget staff member, said county staff have experience managing actuaries and ensuring consistent assumptions across finance, human resources and budget offices, and she opposed transferring those responsibilities to a board that meets infrequently.
No council action was taken on Bill 28-24 during the Jan. 27 hearing; a Government Operations and Fiscal Policy Committee work session is scheduled for Feb. 5. The testimony in the hearing will be part of the record for that committee review.
