Montgomery County could be on the hook for an additional $7.24 million in pension outlays if a decision in a recent union dispute over disability benefits becomes law.
The ruling, which applies to all county government employees other than firefighters, would increase the level of benefits for employees who sustain "partial disabilities" in connection with their jobs to 60 percent of the employees' final earnings, up from the 52.5 percent the County Council approved last year. The full disability benefit, which the Council set at 70 percent of final earnings, would be reduced to 66.7 percent.
The decision "recognizes that some officers who are profoundly injured protecting Montgomery County's families, require and deserve greater protection for their sacrifice," said Fraternal Order of Police Lodge 35 President Marc Zifcak in a statement.
County Executive Ike Leggett is required to abide by the decision and has introduced legislation that would make the recommended changes. However, the County Council is under no obligation to pass it.
The Council will hold a public hearing on the issue Tuesday. The Government Operations and Fiscal Policy Committee and the Public Safety Committee will take it up Wednesday.
Since the vast majority -- at least 60 percent -- of disability claims are for partial disabilities, rather than total disabilities, the increase in benefits would cost taxpayers at least $852,000 more each year than currently expected. In other words, the decision erases half of the $1.9 million the county saved when it created a two-tiered disability pension system last year.
These costs should be considered as a major factor as the Council considers whether to vote the arbitration decision into law, said Councilwoman Nancy Navarro, chairwoman of the Council's Government Operations and Fiscal Policy Committee.
Council Public Safety Committee Chairman Phil Andrews, D-Gaithersburg/Rockville, worries that the decision will lead to additional costs.
"If we adopted a 60 percent partial disability benefit, which would be a major mistake ... we would expect the firefighters to want the same thing," he said. The firefighters have had a 52.5 percent partial disability benefit for a decade.
The costs of that kind of change would likely be similar to the costs for the Police Department -- about $661,000 a year to cover a $5.6 million pension liability, according to Council Senior Legislative Attorney Bob Drummer.
Such a high benefits level could also give incentive to apply for disability benefits to employees who otherwise wouldn't have, Andrews said.
"The arbitrator's ruling ... has partial disability at 90 percent of the full disability benefit," he said. "The difference between partial disability and full disability is huge and needs to be reflected in the rewards."