Baltimore County will borrow up to $260 million for its pension system under a plan approved unanimously Monday by the Baltimore County Council.
The proposal was part of a two-bill package approved by a 7-0 vote.
The borrowed money is needed because the board of the Baltimore County Employees Retirement System voted to reduce its expected rate of return on investments. That change, made in July, would result in an additional $15 million payment from the county next year.
"That amount would grow to a much larger level over the next 30 years," said Keith Dorsey, the county's budget and finance director.
Without the change, county officials estimate that it would have to contribute $4.8 billion to the retirement system.
With the change approved by the council, the county estimates it will now have to contribute $4.1 billion over the same time period. The county expects to save more than $260 million after factoring the more than $499 million in principal and interest payments on the bonds, Dorsey said.
Of course, all of that is predicated on the county earning more on its investments than the nearly 4.25 percent interest. If those assumptions are wrong, the county could lose money and taxpayers could end up footing the bill.
A second bill added increased pension contributions recently negotiated by the union representing corrections officers. The bill also granted a death benefit to adult children of retirees with at least 15 years service to the county. Previously, only minor children of those employees were eligible for the benefit.