By Adam Pagnucco.
Last month, I wrote about Bill 28-24, which shifted much of the authority over the county’s $8 billion in pension and retiree healthcare funds from the county’s chief administrative officer to the two volunteer boards that oversee those funds. The bill had its roots in a war over control of those funds, in which the boards squandered millions of dollars to lease unnecessary, half-empty private sector office space. From a fiscal perspective, the most troublesome aspect of the bill was its shift of the authority to set actuarial assumptions from the chief administrative officer to the boards, which could expose taxpayers to millions of dollars in extra liabilities.
The council ignored these issues and passed the bill without dissent over the objections of the executive branch. Elrich has declined to veto it because they would easily override him, but he has issued a warning about the consequences of this bill for the sake of posterity. Time will tell if his statement proves wrong or prophetic.
Elrich’s memo is reprinted below.
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MEMORANDUM
March 30, 2026
TO: Natali Fani-González, President
Montgomery County Council
FROM: Marc Elrich, County Executive
SUBJECT: County Executive Comments regarding the Passage of Bill 28-24, Employees’ Retirement System and Other Post Employment Benefits – Administration – Powers and Duties
Since Bill 28-24 was voted unanimously, I have chosen not to exercise my veto authority. However, I feel compelled to submit this statement for the record to underscore how significant and highly consequential this action is, particularly because it was taken without any review of our existing shared accountability model and intentionally well-designed hybrid governance structure. The OLO report was a useful survey of the literature, but it was not a substitute for a comprehensive analysis of a governance model that is recognized as a national model of excellence.
The deliberations around Bill 28-24 prompted a valuable conversation about accountability and governance, and I appreciate the Council’s engagement. But the bill, as passed, takes us in the wrong direction. The Council is trying to fix something that isn’t broken and, in doing so, is breaking something that has worked exceptionally well. With this bill, the Council stripped the government of core actuarial responsibilities, including setting key assumptions that drive funding decisions, and handed them to part-time investment Boards that meet just four times a year. It also removed meaningful supervisory authority over the Executive Director, the person responsible for $8 billion in assets, and placed it in the hands of rotating volunteer board members who are not positioned to provide the level of ongoing oversight that role demands.
The stakes are real. Montgomery County’s retirement system is nearly fully funded at over 95%, managing roughly $8 billion in combined assets. That did not happen by accident. It is the product of a carefully designed shared governance structure built over decades, and this bill dismantles it without a shred of evidence that anything is broken. Worse, it introduces significant operational, governance, and key-person risks and could jeopardize the County’s AAA bond rating, driving up costs for future capital bonds and financial services that taxpayers will ultimately bear.
My staff testified on multiple occasions in opposition to this bill and proposed targeted amendments that would have transferred authority over the assumed investment rate of return to the Board of Investment Trustees, where it belongs, while keeping actuarial, financial reporting, and administrative authority with the County, where accountability lives. Those amendments also would have codified the December 2025 MOUs. The Council rejected that balanced path. I urged the Council to strengthen, rather than reduce, accountability to protect current and future retirees and taxpayers alike. This bill, which has become law without my signature, has effectively eliminated the county government role in decision-making and could leave taxpayers and the county with unfunded liabilities; it is not a prudent balance. Unfortunately, the full impact of this decision may not be apparent for years, and I remain hopeful that future policymakers will take a closer look at what has been changed and why it matters.