By Adam Andrzejewski | CEO/Founder of OpenTheBooks.com
When Baltimore City’s finance director retires at the end of the month, he will begin collecting an estimated annual pension of $153,223 – assuming he chooses the maximum retirement option. (Calculations by our auditors at OpenTheBooks.com were complicated and this is our good faith estimate.)
Assuming Raymond is 65 years old and lives to live expectancy of 79, then he’ll collect over $2.1 million in retirement payout. A qualified beneficiary would then receive 40% of the pension during their lifetime.
In 2021, Raymond made $233,465 in salary and was one of the most highly compensated city employees. Unfortunately, pension payouts to public employees are considered private information under Maryland law.
Although taxpayers helped fund and guarantee the golden parachute, citizens have no right to see the payout amounts. Public employee pension payouts are not subject to the Maryland Public Information Act.
In November, the city announced Henry J. Raymond's retirement and credited him with 37 years of service. Raymond played “a critical role in the financial management of the city, facilitating a modern Enterprise Resource Planning system for procurement services, pension reform, protecting the city’s bond ratings and successfully balancing the last [eight] city budgets.”
Raymond, consistently employed by the city since 2008, has been the city’s finance director since 2014. Before that, he bounced back and forth between city and state jobs, all of which are credited as time worked when it comes to his pension, a city spokesman said.
“The State of Maryland pension system and the city pension system have reciprocity so that the years of state service count toward city pensionable time,” spokesman Jack French said. “In short, Director Raymond has had uninterrupted employment with the state or city since July 1984.”
Raymond's LinkedIn profile begins in 1990, when he worked as fiscal director for the Maryland Governor’s Office until 1995.
His bifurcated career with the City of Baltimore began in 1995 when he became chief financial officer of Baltimore City Public School System. At the time, city schools were a city government agency controlled by the mayor. In 1997, the schools separated from the city when partial control was given to Maryland State in exchange for increased funding.
In 1997, Raymond became budget director and deputy budget director for the city, a post he held until 2001 when he went back to being CFO of the school system, a job he held for only a year before becoming director of the Maryland State Central Collection Unit until 2008.
That’s when he rejoined the City of Baltimore, first as a revenue collections administrator, then deputy finance director.
Raymond’s public pension based on current salary
Responding to an OpenTheBooks request, a retirement analyst explained that pensions are calculated “based on the [three] highest consecutive January salary averaged” for the class of employee that Raymond is in. Then, there is a complicated, multi-step benefit formula thereafter.
While we know that Raymond’s 2021 salary was $233,465 and his 2020 pay was $223,914, his 2022 salary hasn’t been released online and requests to the city to provide it have gone unanswered.
His salaries went up between 3 and 4 percent in recent years. Assuming a 4 percent increase over his 2021 salary, Raymond is making $242,803 in 2022.
Taking the average of those three salaries brings Raymond to a $233,394 – on which his pension will be calculated. Of course, we must estimate Raymond’s pension, because retirement annuity payments are not subject to the Maryland public information act. States like New York, Illinois, California and even Oregon have transparency of public pensions.
His salary exceeds the mayor of Baltimore ($199,000) and Maryland's governor ($180,000).
Baltimore Employees’ Retirement System Chief
Raymond is also the chairman of the Baltimore Employees' Retirement System, the system that will pay out his pension.
The system covers regular and permanent employees in the general administrative service of the city and certain non-teacher employees of the Baltimore City Public School System.
Truth In Accounting’s annual Financial State of the Cities report identified Baltimore as a “Sinkhole City” because it lacks the necessary funds to pay its bills.
The report provides comprehensive grades for the fiscal health of the nation’s 75 most populous cities based on FY 2020 financial reports, June 1, 2019 to June 30, 2020.
Baltimore, like many of the cities listed, didn’t have enough money to pay its bills, so the costs are pushed onto future taxpayers, the report states. Truth In Accounting takes the money needed to pay bills and divides it by the estimated number of city taxpayers to come up with the taxpayer burden.
Baltimore is the sixth worst of 75 major U.S. cities. With a $4.5 billion shortfall, the taxpayer burden is $21,000 per person, according to Truth In Accounting. (P.11)
The report states, “Baltimore’s financial problems stem mostly from unfunded retirement obligations that have accumulated over the years. The city had set aside only 66 cents for every dollar of promised pension benefits and 31 cents for every dollar of promised retiree health care benefits.” (P.164)
The citizens in Baltimore should consider: Should the man who presided over the city’s underfunded pension system – which is described as a “sinkhole” by fiscal hawks – get a $153,223 lifetime annual pension of his own?