Employees’ Pension System – Purchase of Service
Should SB938 be enacted, it will specifically impact the rules governing how service credit is accrued within the Employees' Pension System in Maryland. The bill stipulates a precise process for purchasing service credit, requiring interested former members to submit a claim and pay an amount equivalent to a portion of the annuity and pension reserve. This change is expected to benefit a specific group of state employees, hence providing them with a financial advantage as they transition into retirement.
Senate Bill 938 is designed to amend the Employees' Pension System in Maryland by allowing certain former members to purchase credit for eligibility service for employment with the state that they are not currently entitled to credit. This bill is particularly targeted at former employees of the Maryland Department of Transportation who left the agency between December 1991 and March 2009. The proposed measure aims to provide more flexible options for these former employees as they approach their retirement, facilitating their ability to enhance their pension benefits.
There may be notable contention surrounding this bill, primarily centered on the fairness and financial implications of allowing this purchase option. While supporters argue this bill grants deserving former employees the opportunity to improve their pension benefits after years of public service, critics might raise concerns regarding the potential long-term impact on the pension system's sustainability and the fairness of extending these benefits selectively to certain former employees rather than across the board.