By Adam Pagnucco.
Last week, I wrote about a pending lease for the office used by the Montgomery County Employee Retirement Plans (MCERP), which administers the county government’s pension and retiree health benefits. The plans currently use free space in the county executive office building, but they are now shifting to leased space which will cost millions of dollars in coming years.
That article produced a response from the presidents of the three non-MCPS county government unions: Gino Renne, president of UFCW Local 1994 MCGEO; Lee Holland, president of Fraternal Order of Police Lodge 35; and Jeffrey Buddle, president of International Association of Fire Fighters Local 1664. The unions are stakeholders in the benefit plans as they negotiate benefits with the executive branch and their presidents sit on the boards that administer them. The union presidents defend the lease for reasons you shall soon see but they raise a number of other issues as well. Whether they are right or wrong, read their comments carefully as they lift the veil on a long-simmering war being waged over the benefit plans and their $8+ billion in assets.
Let the debate begin!
Their response is printed below.
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RESPONSE: Pension Fund Dollars Are Not Public Funds — and The North Bethesda Lease Isn’t a Scandal. It’s a Fiduciary Obligation.
A recent article painting a picture of “MoCo bureaucrats frolicking” in some luxury palace misses the mark by a mile—and worse, spreads a deeply misleading narrative that threatens to undermine public trust in how Montgomery County manages billions in retirement assets.
Let’s get one thing straight: the money managed by the Montgomery County Employee Retirement Plans (MCERP) is not “public money.” It doesn’t come from general tax revenue, and it doesn’t belong to politicians. It’s held in trust—legally and exclusively—for County employees and retirees. That includes first responders, sanitation workers, public health nurses and countless other public servants who dedicated their careers to this community. This is their deferred compensation, not a political piggy bank.
The recent decision to lease office space in North Bethesda was made in line with fiduciary responsibility, not luxury shopping. In November 2024, following standard County protocols and with legal guidance from the County Attorney’s Office, the Board of Investment Trustees and the MCERP Executive Director signed a lease totaling $3.3 million over eleven years—roughly $30 per square foot, which is below the county’s average of $35–$45 per square foot. That’s not opulence. That’s a good deal.
Yes, the building has amenities—like many modern office properties do—but it was chosen because it meets the real needs of members: free parking, ADA access, private counseling space, and secure facilities that allow retirees to receive personalized service with dignity. The current county building in Rockville simply can’t provide that. Anyone who’s visited the existing setup knows this move is about accessibility and functionality, not hot tubs and bocce courts.
And for context: many public pension systems—from CalPERS in California to the Maryland State Retirement and Pension System and Fairfax County in Virginia—operate from dedicated buildings designed specifically to serve members in a secure and professional setting. MCERP’s new lease is in line with industry norms and fiduciary best practices.
What should raise eyebrows isn’t the lease—it’s the County’s ongoing interference in the management of the funds. The County Chief Administrative Officer (CAO), who serves as the fiduciary, has repeatedly ignored professional advice from the Board and third-party actuaries. That includes setting an overly optimistic assumed rate of return, which increases financial risk against the judgment of national experts like Gabriel Roeder Smith & Company who recommended lowering the rate out of prudence and fiscal responsibility to decrease the financial risk to all stakeholders of the Trust Fund.
Worse, in April 2024, the CAO orchestrated the suspension and eventual dismissal of the Executive Director—not for misconduct, but for doing his job: educating the board on fiduciary obligations and sustainable fund management. Your article’s suggestion that the Executive Director “departed” quietly is, unfortunately, a whitewash.
The County has also billed the Trust Fund for millions in questionable “chargebacks”—for things like general legal services and HR, which often benefit the County far more than the fund’s participants. In one egregious case, the County used trust fund dollars to pay Linda Herman, the former Executive Director, as a consultant who trained management for negotiations against union members, who are themselves beneficiaries of the Trust. That’s not just unethical. It could be illegal.
Let’s be honest: the loudest critics of this lease aren’t fighting for retirees. They’re fighting to keep control over money that legally isn’t theirs. They want to politicize pension dollars and force the Fund’s stewards to act based on optics instead of what’s in the best interest of plan members.
So instead of pearl-clutching over bocce courts and hot tubs, maybe we should be asking: why are County officials ignoring fiduciary law, meddling in pension governance, and spending workers’ retirement savings to serve their own agendas?
The people who earned these benefits deserve better than hot takes and political theater. They deserve accountability, fiduciary integrity, and leadership that puts their financial security first.