EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0502*
SENATE BILL 502
P6 2lr1812
CF HB 744
By: Senator Elfreth (Chair, Joint Committee on Pensions)
Introduced and read first time: January 27, 2022
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: February 15, 2022
CHAPTER ______
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; requiring service credit for certain members of the 14
Employees’ Pension System to be transferred to the Correctional Officers’ 15
Retirement System; and generally relating to the administration of the State 16
Retirement and Pension System. 17
BY repealing and reenacting, with amendments, 18
Article – State Personnel and Pensions 19
Section 21–104(a)(4)(i), (iii), and (v) and (b)(1), 24–401.1(j)(2), 25–403(b), and 20
27–301 21
Annotated Code of Maryland 22
(2015 Replacement Volume and 2021 Supplement) 23
2 SENATE BILL 502
BY repealing and reenacting, without amendments, 1
Article – State Personnel and Pensions 2
Section 24–403 3
Annotated Code of Maryland 4
(2015 Replacement Volume and 2021 Supplement) 5
BY repealing 6
Article – State Personnel and Pensions 7
Section 27–304 8
Annotated Code of Maryland 9
(2015 Replacement Volume and 2021 Supplement) 10
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
That the Laws of Maryland read as follows: 12
Article – State Personnel and Pensions 13
21–104. 14
(a) The Board of Trustees consists of the following 15 trustees: 15
(4) 12 trustees elected or appointed as follows: 16
(i) one trustee who is [a] AN ACTIVE member of the Correctional 17
Officers’ Retirement System, the Employees’ Pension System, the Employees’ Retirement 18
System, the Judges’ Retirement System, the Legislative Pension Plan, the Local Fire and 19
Police System, or the Law Enforcement Officers’ Pension Plan, who shall be elected as 20
provided in subsection (b) of this section and may not be an employee of the State 21
Retirement Agency; 22
(iii) one trustee who is [a] AN ACTIVE member of the Teachers’ 23
Pension System or the Teachers’ Retirement System, who shall be elected as provided in 24
subsection (b) of this section and may not be an employee of the State Retirement Agency; 25
(v) one trustee who is either [a] AN ACTIVE member or retiree of the 26
State Police Retirement System, who shall be elected as provided in subsection (b) of this 27
section and may not be an employee of the State Retirement Agency; 28
(b) (1) (i) The trustees who are members or retirees of the Correctional 29
Officers’ Retirement System, the Employees’ Pension System, the Employees’ Retirement 30
System, the Judges’ Retirement System, the Legislative Pension Plan, the Local Fire and 31
Police System, or the Law Enforcement Officers’ Pension Plan shall be elected by the 32
ACTIVE members and the retirees of those State systems. 33
(ii) The trustees who are members or retirees of the Teachers’ 34
Pension System or the Teachers’ Retirement System shall be elected by the ACTIVE 35
members and the retirees of those State systems. 36 SENATE BILL 502 3
(iii) The trustee who is a member or retiree of the State Police 1
Retirement System shall be elected by the ACTIVE members and the retirees of that State 2
system. 3
(iv) The elections shall be conducted under regulations that the 4
Board of Trustees adopts. 5
24–401.1. 6
(j) (2) If a DROP member dies before termination of the DROP member’s 7
participation in the DROP, the Board of Trustees shall pay [50% of the normal service 8
retirement allowance, including the cost–of–living adjustments as provided in §§ 29–401 9
through 29–403 and 29–408 of this article,] THE SURVIVOR BENEFIT to the beneficiary as 10
provided in § 24–403 of this subtitle. 11
24–403. 12
(a) This section applies only to a retiree who has retired with a service retirement 13
allowance or a disability retirement allowance or a former member who has retired with a 14
deferred vested allowance. 15
(b) On the death of a retiree or former member, the Board of Trustees shall pay 16
80% of the retiree’s retirement allowance: 17
(1) to the surviving spouse; or 18
(2) if there is no surviving spouse or if the surviving spouse dies, to any 19
children of the deceased retiree who are under 18 years of age or disabled, as defined under 20
§ 72(m)(7) of the Internal Revenue Code, in accordance with subsection (c) of this section. 21
(c) (1) Except as provided in paragraphs (2) and (3) of this subsection, if the 22
Board of Trustees pays an allowance to more than one child, the Board of Trustees shall 23
divide the allowance among the children in a manner that provides for payments to 24
continue until: 25
(i) each child has died; or 26
(ii) each child becomes 18 years old. 27
(2) Notwithstanding paragraph (1)(ii) of this subsection, a surviving child 28
who is disabled shall continue to receive an allowance under paragraph (1) of this 29
subsection past the age of 18 years, if the child continues to be disabled. 30
(3) (i) If a surviving child receiving an allowance under paragraph (1) 31
of this subsection is disabled, as defined under § 72(m)(7) of the Internal Revenue Code, the 32 4 SENATE BILL 502
Board of Trustees shall pay to the disabled surviving child an allowance equal to the total 1
of the allowances paid under paragraph (1) of this subsection after: 2
1. all other nondisabled surviving children have died; or 3
2. the youngest nondisabled surviving child becomes 18 4
years old. 5
(ii) If more than one surviving child is disabled, as defined under § 6
72(m)(7) of the Internal Revenue Code, the allowance payable under this paragraph shall 7
be divided equally among the disabled children. 8
25–403. 9
(b) (1) The Board of Trustees shall reduce the allowance of an individual who 10
accepts employment as provided under subsection (a) of this section if: 11
(i) the individual’s current employer is a participating employer 12
other than the State and is the same participating employer that employed the individual 13
at the time of the individual’s last separation from employment with a participating 14
employer before the individual commenced receiving a service retirement allowance or 15
vested allowance; or 16
(ii) the individual’s current employer is any unit of State government 17
and the individual’s employer at the time of the individual’s last separation from 18
employment with the State before the individual commenced receiving a service retirement 19
allowance or vested allowance was also a unit of State government. 20
(2) (i) Subject to subparagraphs (ii) and (iii) of this paragraph, the 21
reduction under paragraph (1) of this subsection shall equal the amount by which the sum 22
of the individual’s initial annual basic allowance and the individual’s annual compensation 23
exceeds the average final compensation used to compute the basic allowance. 24
(ii) Any reduction taken under this subsection may not reduce the 25
retiree’s allowance to an amount less than the required deduction for: 26
1. if the retiree retired from any unit of State government, 27
the retiree’s monthly State–approved medical insurance premiums; or 28
2. if the retiree retired from a participating employer other 29
than the State, the approved monthly medical insurance premiums required by the 30
participating employer that employed the retiree at the time of the retiree’s retirement. 31
(iii) The Board of Trustees shall recover from the retiree any 32
difference between the reduction required under subparagraph (i) of this paragraph and 33
the reduction taken under subparagraph (ii) of this paragraph. 34
SENATE BILL 502 5
(3) The reduction under this subsection does not apply to: 1
(i) an individual who has been retired for 5 years, beginning on 2
January 1, after the date the individual retires; 3
(ii) an individual whose average final compensation was less than 4
$25,000 and who is reemployed on a permanent, temporary, or contractual basis; 5
(iii) an individual who is serving in an elected position as an official 6
of a participating governmental unit or as a constitutional officer for a county that is a 7
participating governmental unit; [or] 8
(iv) a retiree of the Correctional Officers’ Retirement System who is 9
reemployed on a contractual basis for not more than 4 years by the Division of Corrections, 10
the Division of Pretrial Detention and Services, or the Patuxent Institution in the 11
Department of Public Safety and Correctional Services as a correctional officer in a 12
correctional facility defined in § 1–101 of the Correctional Services Article; OR 13
(V) A RETIREE OF THE CORRECTIONAL OFFICERS’ 14
RETIREMENT SYSTEM WHO IS REEMPLO YED ON A CONTRACTUAL BASIS FOR NOT 15
MORE THAN 4 YEARS AS A PAROLE AN D PROBATION EMPLOYEE IN A POSITION 16
AUTHORIZED UNDER TITLE 6, SUBTITLE 1 OF THE CORRECTIONAL SERVICES 17
ARTICLE. 18
27–301. 19
A member is entitled to service credit: 20
(1) for service as a member; 21
(2) regained under § 27–302 of this subtitle by a member who redeposits 22
accumulated contributions previously withdrawn; 23
(3) for prior service as provided in § 27–303 of this subtitle; OR 24
(4) for military service as provided in Title 38 of this article[; or 25
(5) purchased under § 27–304 of this subtitle]. 26
[27–304. 27
(a) A member may purchase service credit as provided in subsection (b) of this 28
section for periods of service described in subsection (c) of this section for which the member 29
is not otherwise entitled to service credit. 30
(b) (1) To purchase service credit under this section, a member must: 31 6 SENATE BILL 502
(i) complete a claim for the service credit and file it with the Board 1
of Trustees on the form that the Board of Trustees provides; and 2
(ii) pay to the Board of Trustees in a single payment 6% of the 3
amount received in compensation for that full–time service plus regular interest to the date 4
of payment. 5
(2) A member may pay for service credit purchased under this section at 6
any time before retirement. 7
(c) A member may purchase service credit for prior service as: 8
(1) a full–time magistrate in chancery or magistrate in juvenile causes on 9
or before June 30, 1975; or 10
(2) a member of the State Workers’ Compensation Commission on or before 11
June 30, 1977. 12
(d) Service credit that is purchased under this section may not be used as service 13
credit in another retirement or pension system of the State or a political subdivision of the 14
State.] 15
SECTION 2. AND BE IT FURTHER ENACTED, That: 16
(a) This section applies to an Application for Retirement submitted to the State 17
Retirement and Pension System by an individual who: 18
(1) on or after October 1, 1979, enrolled as a member of the Employees’ 19
Retirement System; 20
(2) on or after August 1, 1984, transferred, from the Employees’ Retirement 21
System to the Non–Contributory Pension System tier of the Employees’ Pension System of 22
the State Retirement and Pension System; 23
(3) on or after April 27, 2021, submitted an Application for Service or 24
Disability Retirement to the State Retirement and Pension System that the System 25
determined was not properly notarized; 26
(4) died on or after May 1, 2021, but before May 31, 2021; and 27
(5) as a result of the timing of the individual’s death, did not have an 28
opportunity to submit a retirement application that was properly notarized. 29
(b) An application described in subsection (a) of this section shall be accepted by 30
the Board of Trustees for the State Retirement and Pension System. 31
SENATE BILL 502 7
SECTION 3. AND BE IT FURTHER ENACTED, That: 1
(a) This section applies to an individual who: 2
(1) (i) is at least 64 years old on or before July 1, 2022; 3
(ii) enrolled in the Employees’ Pension System of the State 4
Retirement and Pension System on or after December 1, 1992; 5
(iii) accrued at least 34 years of eligibility service as a member of the 6
Employees’ Pension System; 7
(iv) was transferred to the Correctional Officers’ Retirement System 8
of the State Retirement and Pension System on July 1, 2016, in accordance with the 9
provisions of Chapters 218 and 219 of the Acts of the General Assembly of 2016; 10
(v) after transferring to the Correctional Officers’ Retirement 11
System on July 1, 2016, did not transfer the service credit accrued in the Employees’ 12
Pension System to the Correctional Officers’ Retirement System; and 13
(vi) 1. applied for a disability retirement from the Correctional 14
Officers’ Retirement System by submitting a Statement of Disability and Preliminary 15
Application for Disability Retirement on or after May 1, 2019; and 16
2. at the time the individual applied for disability did not 17
have 5 years of eligibility service in the Correctional Officers’ Retirement System; or 18
(2) (i) is at least 50 years old on or before July 1, 2022; 19
(ii) enrolled in the Employees’ Pension System of the State 20
Retirement and Pension System on or after October 1, 2000; 21
(iii) accrued at least 17 years of eligibility service as a member of the 22
Employees’ Pension System; 23
(iv) was transferred to the Correctional Officers’ Retirement System 24
of the State Retirement and Pension System on July 1, 2017, in accordance with the 25
provisions of Chapters 688 and 689 of the Acts of the General Assembly of 2017; 26
(v) after transferring to the Correctional Officers’ Retirement 27
System on July 1, 2017, did not transfer the service credit accrued in the Employees’ 28
Pension System to the Correctional Officers’ Retirement System; and 29
(vi) 1. applied for a disability retirement from the Correctional 30
Officers’ Retirement System by submitting a Statement of Disability and Preliminary 31
Application for Disability Retirement on or after March 1, 2021; and 32
8 SENATE BILL 502
2. at the time the individual applied for disability did not 1
have 5 years of eligibility service in the Correctional Officers’ Retirement System. 2
(b) On or after June 1, 2022, for an individual described in subsection (a) of this 3
section, the Board of Trustees for the State Retirement and Pension System shall transfer 4
all service credit accrued by the individual in the Employees’ Pension System to the 5
Correctional Officers’ Retirement System. 6
(c) (1) Except as provided in paragraph (2) of this subsection, after the Board 7
of Trustees transfers the individual’s service credit under subsection (b) of this section, the 8
individual shall deposit in the annuity savings fund of the Correctional Officers’ Retirement 9
System the sum of: 10
(i) the total accumulated contributions to the individual’s credit in 11
the annuity savings fund of the Employees’ Pension System; and 12
(ii) the difference, if any, between the member contributions at the 13
rate provided for in the Correctional Officers’ Retirement System, including interest on 14
those contributions, and the total accumulated contributions to the individual’s credit in 15
the annuity savings fund of the Employees’ Pension System. 16
(2) On retirement from the Correctional Officers’ Retirement System, the 17
individual’s retirement allowance shall be reduced, in accordance with § 21–312 of the State 18
Personnel and Pensions Article, by the actuarial equivalent of the amounts determined 19
under paragraph (1)(ii) of this subsection if the member elects not to deposit those amounts 20
in the annuity savings fund of the Correctional Officers’ Retirement System. 21
SECTION 3. 4. AND BE IT FURTHER ENACTED, That this Act shall take effect 22
June 1, 2022. 23
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.