EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
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SENATE BILL 502
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By: Senator Elfreth (Chair, Joint Committee on Pensions)
Introduced and read first time: January 27, 2022
Assigned to: Budget and Taxation
A BILL ENTITLED
AN ACT concerning 1
State Retirement and Pension System – Administration – Clarifications and 2
Corrections 3
FOR the purpose of clarifying that certain elected trustees be active members of certain 4
systems; clarifying that certain State Retirement and Pension System trustee 5
elections limit voting to individuals who are active members of certain systems; 6
clarifying the survivor benefit for certain beneficiaries of certain retirees of the State 7
Police Retirement System; clarifying that certain individuals who are retirees of the 8
Correctional Officers’ Retirement System are exempt from a certain earnings offset 9
under certain circumstances if the individuals are reemployed as parole and 10
probation employees; repealing certain obsolete provisions of law that authorize the 11
purchase of certain service credit in the Judges’ Retirement System; requiring the 12
Board of Trustees for the State Retirement and Pension System to accept certain 13
applications for retirement; and generally relating to the administration of the State 14
Retirement and Pension System. 15
BY repealing and reenacting, with amendments, 16
Article – State Personnel and Pensions 17
Section 21–104(a)(4)(i), (iii), and (v) and (b)(1), 24–401.1(j)(2), 25–403(b), and 18
27–301 19
Annotated Code of Maryland 20
(2015 Replacement Volume and 2021 Supplement) 21
BY repealing and reenacting, without amendments, 22
Article – State Personnel and Pensions 23
Section 24–403 24
Annotated Code of Maryland 25
(2015 Replacement Volume and 2021 Supplement) 26
BY repealing 27
Article – State Personnel and Pensions 28 2 SENATE BILL 502
Section 27–304 1
Annotated Code of Maryland 2
(2015 Replacement Volume and 2021 Supplement) 3
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 4
That the Laws of Maryland read as follows: 5
Article – State Personnel and Pensions 6
21–104. 7
(a) The Board of Trustees consists of the following 15 trustees: 8
(4) 12 trustees elected or appointed as follows: 9
(i) one trustee who is [a] AN ACTIVE member of the Correctional 10
Officers’ Retirement System, the Employees’ Pension System, the Employees’ Retirement 11
System, the Judges’ Retirement System, the Legislative Pension Plan, the Local Fire and 12
Police System, or the Law Enforcement Officers’ Pension Plan, who shall be elected as 13
provided in subsection (b) of this section and may not be an employee of the State 14
Retirement Agency; 15
(iii) one trustee who is [a] AN ACTIVE member of the Teachers’ 16
Pension System or the Teachers’ Retirement System, who shall be elected as provided in 17
subsection (b) of this section and may not be an employee of the State Retirement Agency; 18
(v) one trustee who is either [a] AN ACTIVE member or retiree of the 19
State Police Retirement System, who shall be elected as provided in subsection (b) of this 20
section and may not be an employee of the State Retirement Agency; 21
(b) (1) (i) The trustees who are members or retirees of the Correctional 22
Officers’ Retirement System, the Employees’ Pension System, the Employees’ Retirement 23
System, the Judges’ Retirement System, the Legislative Pension Plan, the Local Fire and 24
Police System, or the Law Enforcement Officers’ Pension Plan shall be elected by the 25
ACTIVE members and the retirees of those State systems. 26
(ii) The trustees who are members or retirees of the Teachers’ 27
Pension System or the Teachers’ Retirement System shall be elected by the ACTIVE 28
members and the retirees of those State systems. 29
(iii) The trustee who is a member or retiree of the State Police 30
Retirement System shall be elected by the ACTIVE members and the retirees of that State 31
system. 32
(iv) The elections shall be conducted under regulations that the 33
Board of Trustees adopts. 34 SENATE BILL 502 3
24–401.1. 1
(j) (2) If a DROP member dies before termination of the DROP member’s 2
participation in the DROP, the Board of Trustees shall pay [50% of the normal service 3
retirement allowance, including the cost–of–living adjustments as provided in §§ 29–401 4
through 29–403 and 29–408 of this article,] THE SURVIVOR BENEFIT to the beneficiary as 5
provided in § 24–403 of this subtitle. 6
24–403. 7
(a) This section applies only to a retiree who has retired with a service retirement 8
allowance or a disability retirement allowance or a former member who has retired with a 9
deferred vested allowance. 10
(b) On the death of a retiree or former member, the Board of Trustees shall pay 11
80% of the retiree’s retirement allowance: 12
(1) to the surviving spouse; or 13
(2) if there is no surviving spouse or if the surviving spouse dies, to any 14
children of the deceased retiree who are under 18 years of age or disabled, as defined under 15
§ 72(m)(7) of the Internal Revenue Code, in accordance with subsection (c) of this section. 16
(c) (1) Except as provided in paragraphs (2) and (3) of this subsection, if the 17
Board of Trustees pays an allowance to more than one child, the Board of Trustees shall 18
divide the allowance among the children in a manner that provides for payments to 19
continue until: 20
(i) each child has died; or 21
(ii) each child becomes 18 years old. 22
(2) Notwithstanding paragraph (1)(ii) of this subsection, a surviving child 23
who is disabled shall continue to receive an allowance under paragraph (1) of this 24
subsection past the age of 18 years, if the child continues to be disabled. 25
(3) (i) If a surviving child receiving an allowance under paragraph (1) 26
of this subsection is disabled, as defined under § 72(m)(7) of the Internal Revenue Code, the 27
Board of Trustees shall pay to the disabled surviving child an allowance equal to the total 28
of the allowances paid under paragraph (1) of this subsection after: 29
1. all other nondisabled surviving children have died; or 30
2. the youngest nondisabled surviving child becomes 18 31
years old. 32
4 SENATE BILL 502
(ii) If more than one surviving child is disabled, as defined under § 1
72(m)(7) of the Internal Revenue Code, the allowance payable under this paragraph shall 2
be divided equally among the disabled children. 3
25–403. 4
(b) (1) The Board of Trustees shall reduce the allowance of an individual who 5
accepts employment as provided under subsection (a) of this section if: 6
(i) the individual’s current employer is a participating employer 7
other than the State and is the same participating employer that employed the individual 8
at the time of the individual’s last separation from employment with a participating 9
employer before the individual commenced receiving a service retirement allowance or 10
vested allowance; or 11
(ii) the individual’s current employer is any unit of State government 12
and the individual’s employer at the time of the individual’s last separation from 13
employment with the State before the individual commenced receiving a service retirement 14
allowance or vested allowance was also a unit of State government. 15
(2) (i) Subject to subparagraphs (ii) and (iii) of this paragraph, the 16
reduction under paragraph (1) of this subsection shall equal the amount by which the sum 17
of the individual’s initial annual basic allowance and the individual’s annual compensation 18
exceeds the average final compensation used to compute the basic allowance. 19
(ii) Any reduction taken under this subsection may not reduce the 20
retiree’s allowance to an amount less than the required deduction for: 21
1. if the retiree retired from any unit of State government, 22
the retiree’s monthly State–approved medical insurance premiums; or 23
2. if the retiree retired from a participating employer other 24
than the State, the approved monthly medical insurance premiums required by the 25
participating employer that employed the retiree at the time of the retiree’s retirement. 26
(iii) The Board of Trustees shall recover from the retiree any 27
difference between the reduction required under subparagraph (i) of this paragraph and 28
the reduction taken under subparagraph (ii) of this paragraph. 29
(3) The reduction under this subsection does not apply to: 30
(i) an individual who has been retired for 5 years, beginning on 31
January 1, after the date the individual retires; 32
(ii) an individual whose average final compensation was less than 33
$25,000 and who is reemployed on a permanent, temporary, or contractual basis; 34
SENATE BILL 502 5
(iii) an individual who is serving in an elected position as an official 1
of a participating governmental unit or as a constitutional officer for a county that is a 2
participating governmental unit; [or] 3
(iv) a retiree of the Correctional Officers’ Retirement System who is 4
reemployed on a contractual basis for not more than 4 years by the Division of Corrections, 5
the Division of Pretrial Detention and Services, or the Patuxent Institution in the 6
Department of Public Safety and Correctional Services as a correctional officer in a 7
correctional facility defined in § 1–101 of the Correctional Services Article; OR 8
(V) A RETIREE OF THE CORRECTIONAL OFFICERS’ 9
RETIREMENT SYSTEM WHO IS REEMPLO YED ON A CONTRACTUAL BASIS FOR NOT 10
MORE THAN 4 YEARS AS A PAROLE AN D PROBATION EMPLOYEE IN A POSITION 11
AUTHORIZED UNDER TITLE 6, SUBTITLE 1 OF THE CORRECTIONAL SERVICES 12
ARTICLE. 13
27–301. 14
A member is entitled to service credit: 15
(1) for service as a member; 16
(2) regained under § 27–302 of this subtitle by a member who redeposits 17
accumulated contributions previously withdrawn; 18
(3) for prior service as provided in § 27–303 of this subtitle; OR 19
(4) for military service as provided in Title 38 of this article[; or 20
(5) purchased under § 27–304 of this subtitle]. 21
[27–304. 22
(a) A member may purchase service credit as provided in subsection (b) of this 23
section for periods of service described in subsection (c) of this section for which the member 24
is not otherwise entitled to service credit. 25
(b) (1) To purchase service credit under this section, a member must: 26
(i) complete a claim for the service credit and file it with the Board 27
of Trustees on the form that the Board of Trustees provides; and 28
(ii) pay to the Board of Trustees in a single payment 6% of the 29
amount received in compensation for that full–time service plus regular interest to the date 30
of payment. 31
6 SENATE BILL 502
(2) A member may pay for service credit purchased under this section at 1
any time before retirement. 2
(c) A member may purchase service credit for prior service as: 3
(1) a full–time magistrate in chancery or magistrate in juvenile causes on 4
or before June 30, 1975; or 5
(2) a member of the State Workers’ Compensation Commission on or before 6
June 30, 1977. 7
(d) Service credit that is purchased under this section may not be used as service 8
credit in another retirement or pension system of the State or a political subdivision of the 9
State.] 10
SECTION 2. AND BE IT FURTHER ENACTED, That: 11
(a) This section applies to an Application for Retirement submitted to the State 12
Retirement and Pension System by an individual who: 13
(1) on or after October 1, 1979, enrolled as a member of the Employees’ 14
Retirement System; 15
(2) on or after August 1, 1984, transferred, from the Employees’ Retirement 16
System to the Non–Contributory Pension System tier of the Employees’ Pension System of 17
the State Retirement and Pension System; 18
(3) on or after April 27, 2021, submitted an Application for Service or 19
Disability Retirement to the State Retirement and Pension System that the System 20
determined was not properly notarized; 21
(4) died on or after May 1, 2021, but before May 31, 2021; and 22
(5) as a result of the timing of the individual’s death, did not have an 23
opportunity to submit a retirement application that was properly notarized. 24
(b) An application described in subsection (a) of this section shall be accepted by 25
the Board of Trustees for the State Retirement and Pension System. 26
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect June 27
1, 2022. 28