Employer Pension Subsidy Reduced – No Effect on Employee’s Net Income


You may have noticed on your state employee pay stub that the employer paid pension subsidy has been reduced. For those of you confused by “employer paid pension subsidy” this is the amount your employer is contributing towards your pension. Whether this subsidy increases or decreases, please understand that it has no impact on your annual earnable compensation. It so happens that this recent reduction is due to the action taken by the Maryland General Assembly during the 2014 legislative session that reduced the state’s supplemental contribution into the retirement and pension trust. The supplemental contribution of savings—the contribution that is made in addition to what is required by statute, and realized as a result of the 2011 pension reform measure—was reduced from $300 million to $100 million. Again, this reduction will have no impact on your net bi-weekly pay.

You can find more information in the memo here: 
2014 Employer Paid Subsidies Adjustments Effective RG 5/13/14 and UM 5/17/14.