Maryland 2025 Regular Session

Maryland House Bill HB1388 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MATTER ADDE D TO EXISTING LAW .
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb1388
6	6
7	7	HOUSE BILL 1388
8	8	P6 5lr2149
9	9
10	10	By: Delegate Barnes
11	11	Introduced and read first time: February 7, 2025
12	12	Assigned to: Appropriations
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Employees’ Pension System and Teachers’ Pension System – Deferred 2
19	19	Retirement Option Program – Establishment 3
20	20
21	21	FOR the purpose of establishing a Deferred Retirement Option Program for certain 4
22	22	members of the Employees’ Pension System and the Teachers’ Pension System; 5
23	23	requiring the State Retirement Agency to seek a certain determination letter; and 6
24	24	generally relating to establishing a Deferred Retirement Option Program for certain 7
25	25	members of the Employees’ Pension System and the Teachers’ Pension System. 8
26	26
27	27	BY repealing and reenacting, without amendments, 9
28	28	Article – State Personnel and Pensions 10
29	29	Section 23–401 11
30	30	Annotated Code of Maryland 12
31	31	(2024 Replacement Volume and 2024 Supplement) 13
32	32
33	33	BY adding to 14
34	34	Article – State Personnel and Pensions 15
35	35	Section 23–401.1 16
36	36	Annotated Code of Maryland 17
37	37	(2024 Replacement Volume and 2024 Supplement) 18
38	38
39	39	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
40	40	That the Laws of Maryland read as follows: 20
41	41
42	42	Article – State Personnel and Pensions 21
43	43
44	44	23–401. 22
45	45
46	46	(a) Except as provided in subsection (f) of this section, a member may retire with 23
47	47	a normal service retirement allowance if: 24
48	48	2 HOUSE BILL 1388
49	49
50	50
51	51	(1) the member completes and submits a written application to the Board 1
52	52	of Trustees stating the date when the member desires to retire; and 2
53	53
54	54	(2) on or before the date of retirement, the member: 3
55	55
56	56	(i) has at least 30 years of eligibility service; 4
57	57
58	58	(ii) has a combined total of at least 30 years of eligibility service from 5
59	59	the Employees’ Pension System, the Teachers’ Pension System, the Employees’ Retirement 6
60	60	System, or the Teachers’ Retirement System; or 7
61	61
62	62	(iii) has attained the age and the years of eligibility service as follows: 8
63	63
64	64	Age Years of Eligibility 9
65	65	Service 10
66	66	62 with 5 11
67	67	63 with 4 12
68	68	64 with 3 13
69	69	65 or more with 2 14
70	70
71	71	(b) Except as provided in subsections (c), (d), (e), (f), and (g) of this section, on 15
72	72	retirement under this section, a member is entitled to receive a normal service retirement 16
73	73	allowance that equals the number of years of the member’s creditable service multiplied 17
74	74	by: 18
75	75
76	76	(1) 0.8% of the member’s average final compensation that is not in excess 19
77	77	of the Social Security integration level; and 20
78	78
79	79	(2) 1.5% of the member’s average final compensation that exceeds the 21
80	80	Social Security integration level. 22
81	81
82	82	(c) Except as provided in subsections (e) and (g) of this section, on retirement 23
83	83	under this section, a member who is subject to the contributory pension benefit under 24
84	84	Subtitle 2, Part II of this title is entitled to receive a normal service retirement allowance 25
85	85	that equals the sum of: 26
86	86
87	87	(1) the number of years of the member’s creditable service on or after July 27
88	88	1, 1998 multiplied by 1.4% of the member’s average final compensation; and 28
89	89
90	90	(2) the greater of: 29
91	91
92	92	(i) the number of years of the member’s creditable service on or 30
93	93	before June 30, 1998 multiplied by 1.2% of the member’s average final compensation; or 31
94	94
95	95	(ii) the number of years of the member’s creditable service on or 32
96	96	before June 30, 1998 multiplied by: 33
97	97	HOUSE BILL 1388 3
98	98
99	99
100	100	1. 0.8% of the member’s average final compensation that is 1
101	101	not in excess of the Social Security integration level; and 2
102	102
103	103	2. 1.5% of the member’s average final compensation that 3
104	104	exceeds the Social Security integration level. 4
105	105
106	106	(d) Except as provided in subsections (e) and (g) of this section, a member who is 5
107	107	subject to the Alternate Contributory Pension Selection under Subtitle 2, Part III of this 6
108	108	title is entitled to receive a normal service retirement allowance that equals the sum of: 7
109	109
110	110	(1) the greater of: 8
111	111
112	112	(i) the number of years of the member’s creditable service on or 9
113	113	before June 30, 1998 multiplied by 1.2% of the member’s average final compensation; or 10
114	114
115	115	(ii) the number of years of the member’s creditable service on or 11
116	116	before June 30, 1998 multiplied by: 12
117	117
118	118	1. 0.8% of the member’s average final compensation that is 13
119	119	not in excess of the Social Security integration level; and 14
120	120
121	121	2. 1.5% of the member’s average final compensation that 15
122	122	exceeds the Social Security integration level; and 16
123	123
124	124	(2) the number of years of the member’s creditable service on or after July 17
125	125	1, 1998 multiplied by 1.8% of the member’s average final compensation. 18
126	126
127	127	(e) (1) This subsection applies only to a member who has a combined total of 19
128	128	30 years of eligibility service as provided in subsection (a)(2)(ii) of this section. 20
129	129
130	130	(2) A member is entitled to receive a normal service retirement allowance 21
131	131	that equals: 22
132	132
133	133	(i) an allowance based on the creditable service the member earned 23
134	134	in the Employees’ Pension System; 24
135	135
136	136	(ii) an allowance based on the creditable service the member earned 25
137	137	in the Employees’ Retirement System; 26
138	138
139	139	(iii) an allowance based on the creditable service the member earned 27
140	140	in the Teachers’ Pension System; plus 28
141	141
142	142	(iv) an allowance based on the creditable service the member earned 29
143	143	in the Teachers’ Retirement System. 30
144	144
145	145	(f) (1) A member who begins membership on or after July 1, 2011, may retire 31
146	146	with a normal service retirement allowance if: 32 4 HOUSE BILL 1388
147	147
148	148
149	149
150	150	(i) the member completes and submits a written application to the 1
151	151	Board of Trustees stating the date when the member desires to retire; and 2
152	152
153	153	(ii) on or before the date of retirement, the member: 3
154	154
155	155	1. has at least 90 years of combined age and years of 4
156	156	eligibility service; or 5
157	157
158	158	2. is at least 65 years old and has at least 10 years of 6
159	159	eligibility service. 7
160	160
161	161	(2) Except as provided in subsection (g) of this section, a member who is 8
162	162	subject to the reformed contributory pension benefit under Subtitle 2, Part IV of this title 9
163	163	is entitled to receive a normal service retirement that equals the number of years of the 10
164	164	member’s creditable service multiplied by 1.5% of the member’s average final 11
165	165	compensation. 12
166	166
167	167	(g) On retirement under this section, if a member’s annuity is greater than the 13
168	168	member’s normal service retirement allowance calculated under this section, the member’s 14
169	169	normal service retirement allowance shall equal the member’s annuity. 15
170	170
171	171	23–401.1. 16
172	172
173	173	(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 17
174	174	INDICATED. 18
175	175
176	176	(2) “DROP” MEANS THE DEFERRED RETIREMENT OPTION 19
177	177	PROGRAM ESTABLISHED U NDER THIS SECTION. 20
178	178
179	179	(3) “DROP MEMBER” MEANS A MEMBER OF TH E EMPLOYEES’ 21
180	180	PENSION SYSTEM OR THE TEACHERS’ PENSION SYSTEM WHO: 22
181	181
182	182	(I) IS ELIGIBLE TO PARTI CIPATE IN THE DROP AS PROVIDED 23
183	183	IN SUBSECTION (C) OF THIS SECTION; AND 24
184	184
185	185	(II) ELECTS TO PARTICIPAT E IN THE DROP AS PROVIDED IN 25
186	186	SUBSECTION (E) OF THIS SECTION. 26
187	187
188	188	(B) THERE IS A DROP FOR ELIGIBLE MEMBERS OF THE EMPLOYEES’ 27
189	189	PENSION SYSTEM AND THE TEACHERS’ PENSION SYSTEM. 28
190	190
191	191	(C) A MEMBER OF THE EMPLOYEES’ PENSION SYSTEM OR THE TEACHERS’ 29
192	192	PENSION SYSTEM IS ELIGIBLE TO PARTI CIPATE IN THE DROP IF THE MEMBER IS 30 HOUSE BILL 1388 5
193	193
194	194
195	195	ELIGIBLE TO RECEIVE A NORMAL SERVICE RET IREMENT UNDER § 23–401 OF THIS 1
196	196	SUBTITLE. 2
197	197
198	198	(D) AN ELIGIBLE MEMBER MA Y ELECT TO PARTICIPA TE IN THE DROP FOR 3
199	199	A PERIOD NOT TO EXCE ED THE LESSER OF : 4
200	200
201	201	(1) 7 YEARS; 5
202	202
203	203	(2) THE DIFFERENCE BETWE EN 32 YEARS AND THE MEMBER ’S 6
204	204	ELIGIBILITY SERVICE AS OF THE DATE OF TH E MEMBER ’S ELECTION TO 7
205	205	PARTICIPATE IN THE DROP AND RETIRE FROM THE EMPLOYEES’ PENSION SYSTEM 8
206	206	OR THE TEACHERS’ PENSION SYSTEM; OR 9
207	207
208	208	(3) A TERM SELECTED BY T HE MEMBER. 10
209	209
210	210	(E) (1) AN ELIGIBLE MEMBER WH O ELECTS TO PARTICIP ATE IN THE 11
211	211	DROP SHALL: 12
212	212
213	213	(I) COMPLETE AND SUBMIT A WRITTEN ELECTION F ORM TO 13
214	214	THE BOARD OF TRUSTEES, ON THE FORM THAT THE BOARD OF TRUSTEES 14
215	215	PROVIDES, STATING: 15
216	216
217	217	1. THE MEMBER ’S INTENTION TO PART ICIPATE IN THE 16
218	218	DROP; 17
219	219
220	220	2. THE DATE WHEN THE ME MBER DESIRES TO RETI RE; 18
221	221
222	222	3. THE PERIOD THAT THE MEMBER DESIRES TO 19
223	223	PARTICIPATE IN THE DROP, AS PROVIDED IN SUBSE CTION (D) OF THIS SECTION; 20
224	224
225	225	4. THE DATE WHEN THE ME MBER INTENDS TO 21
226	226	TERMINATE EMPLOYMENT IN THE FORM OF A BIN DING LETTER OF RESIG NATION 22
227	227	SUBMITTED WITH THE M EMBER’S ELECTION FORM ; AND 23
228	228
229	229	5. ANY OTHER INFORMATIO N REQUIRED BY THE BOARD 24
230	230	OF TRUSTEES TO IMPLEMENT THE DROP; AND 25
231	231
232	232	(II) COMPLETE AND SUBMIT A WRITTEN RETIREMENT 26
233	233	APPLICATION FORM TO THE BOARD OF TRUSTEES, ON THE FORM THAT THE BOARD 27
234	234	OF TRUSTEES PROVIDES . 28
235	235
236	236	(2) AN ELIGIBLE MEMBER ’S ELECTION TO PARTIC IPATE IN THE 29
237	237	DROP IS IRREVOCABLE . 30 6 HOUSE BILL 1388
238	238
239	239
240	240
241	241	(F) (1) A DROP MEMBER’S PARTICIPATION IN T HE DROP SHALL 1
242	242	COMMENCE ON THE FIRS T DAY OF THE MONTH FOLLOWING ACCEPTANCE BY THE 2
243	243	BOARD OF TRUSTEES OF THE DROP MEMBER’S COMPLETED ELECTION FORM, 3
244	244	RETIREMENT APPLICATI ON FORM, AND ANY OTHER INFORM ATION REQUIRED BY 4
245	245	THE BOARD OF TRUSTEES. 5
246	246
247	247	(2) A DROP MEMBER IS A RETIREE OF THE EMPLOYEES’ PENSION 6
248	248	SYSTEM OR THE TEACHERS’ PENSION SYSTEM. 7
249	249
250	250	(G) PARTICIPATION IN THE DROP ENDS IF THE DROP PARTICIPANT: 8
251	251
252	252	(1) SEPARATES FROM EMPLO YMENT IN ACCORDANCE WITH THE 9
253	253	BINDING LETTER OF RE SIGNATION SUBMITTED WITH THE MEMBER ’S ELECTION 10
254	254	FORM; 11
255	255
256	256	(2) DIES; 12
257	257
258	258	(3) IS TERMINATED FROM EMPLOYMENT AT ANY TI ME BEFORE THE 13
259	259	DATE SPECIFIED ON TH E MEMBER’S ELECTION FORM ; OR 14
260	260
261	261	(4) SHORTENS THE TIME PE RIOD FOR PARTICIPATI ON IN THE DROP 15
262	262	BY DELIVERING TO THE BOARD OF TRUSTEES WRITTEN NOTI CE OF THE INTENT OF 16
263	263	THE DROP MEMBER TO TERMINATE EMPLOYMENT . 17
264	264
265	265	(H) (1) AS OF THE EFFECTIVE D ATE OF PARTICIPATION IN THE DROP, 18
266	266	THE BOARD OF TRUSTEES SHALL DETERM INE THE DROP MEMBER’S SERVICE 19
267	267	RETIREMENT ALLOWANCE UNDER § 23–401 OF THIS SUBTITLE , INCLUDING ANY 20
268	268	OPTIONAL ALLOWANCE E LECTED UNDER TITLE 21, SUBTITLE 4 OF THIS ARTICLE. 21
269	269
270	270	(2) DURING THE PERIOD THA T A DROP MEMBER PARTICIPATES IN 22
271	271	THE DROP, THE BOARD OF TRUSTEES SHALL : 23
272	272
273	273	(I) DEPOSIT THE DROP MEMBER’S SERVICE RETIREMENT 24
274	274	ALLOWANCE IN THE DROP FOR THE DROP MEMBER’S BENEFIT; 25
275	275
276	276	(II) ADJUST THE DROP MEMBER’S SERVICE RETIREMENT 26
277	277	ALLOWANCE EACH FISCA L YEAR AS PROVIDED I N §§ 29–401, 29–402, 29–406, AND 27
278	278	29–408 OF THIS ARTICLE; AND 28
279	279
280	280	(III) ACCRUE INTEREST ON T HE AMOUNTS CALCULATE D UNDER 29
281	281	ITEMS (I) AND (II) OF THIS PARAGRAPH FO R THE DROP MEMBER INTO THE DROP 30
282	282	AT THE RATE OF 4% A YEAR, COMPOUNDED ANNUALLY . 31 HOUSE BILL 1388 7
283	283
284	284
285	285
286	286	(3) A DROP MEMBER MAY NOT RECEI VE CREDITABLE SERVIC E OR 1
287	287	ELIGIBILITY SERVICE DURING THE PERIOD TH AT THE DROP MEMBER 2
288	288	PARTICIPATES IN THE DROP. 3
289	289
290	290	(4) A DROP MEMBER’S COMPENSATION DURIN G THE PERIOD THAT 4
291	291	THE DROP MEMBER P ARTICIPATES IN THE DROP MAY NOT BE: 5
292	292
293	293	(I) SUBJECT TO THE EMPLO YER PICKUP PROVISION S OF § 6
294	294	21–313 OF THIS ARTICLE OR A NY REDUCTION OR DEDU CTION AS A MEMBER 7
295	295	CONTRIBUTION FOR PEN SION OR RETIREMENT P URPOSES; OR 8
296	296
297	297	(II) USED TO INCREASE THE DROP MEMBER’S AVERAGE FINAL 9
298	298	COMPENSATION . 10
299	299
300	300	(5) DURING THE PERIOD THA T A DROP MEMBER PARTICIPATES IN 11
301	301	THE DROP, THE DROP MEMBER SHALL : 12
302	302
303	303	(I) CONTINUE TO RECEIVE COMPENSATION , HEALTH 13
304	304	INSURANCE AND OTHER BENEFIT OPTIONS ESTA BLISHED UNDER THE STATE 14
305	305	EMPLOYEE AND RETIREE HEALTH AND WELFARE BENEFIT PROGRAM 15
306	306	ADMINISTERED BY THE SECRETARY OF BUDGET AND MANAGEMENT , AND ANY 16
307	307	OTHER BENEFITS AS AN EMPLOYEE; 17
308	308
309	309	(II) BE SUBJECT TO THE PE RSONNEL LAW , REGULATIONS , AND 18
310	310	POLICIES APPLICABLE TO AN EMPLOYEE ; AND 19
311	311
312	312	(III) RECEIVE RETIREMENT B ENEFITS ONLY TO THE E XTENT 20
313	313	PROVIDED IN THIS SEC TION. 21
314	314
315	315	(6) THE BOARD OF TRUSTEES IS NOT REQUI RED TO ESTABLISH AN 22
316	316	INDIVIDUAL DROP ACCOUNT FOR EACH DROP MEMBER. 23
317	317
318	318	(7) EACH YEAR, THE BOARD OF TRUSTEES SHALL PROVID E A DROP 24
319	319	MEMBER WITH A WRITTE N ACCOUNTING OF THE DROP MEMBER’S ACCOUNT 25
320	320	BALANCE IN THE DROP. 26
321	321
322	322	(I) (1) SUBJECT TO PARAGRAPHS (2) AND (3) OF THIS SUBSECTION , ON 27
323	323	TERMINATION OF A DROP MEMBER’S PARTICIPATION IN T HE DROP, THE BOARD 28
324	324	OF TRUSTEES SHALL PAY TO THE DROP MEMBER OR , IF THE DROP MEMBER HAS 29
325	325	DIED, THE DESIGNATED BENEF ICIARY OF THE DROP MEMBER, THE AMOUNT 30
326	326	ACCRUED IN THE DROP FOR THE DROP MEMBER UNDER SUBSECT ION (H)(2) OF 31 8 HOUSE BILL 1388
327	327
328	328
329	329	THIS SECTION, REDUCED BY ANY WITHH OLDING TAXES REMITTE D TO THE INTERNAL 1
330	330	REVENUE SERVICE OR OTHER TAXI NG AUTHORITY , IN A LUMP SUM. 2
331	331
332	332	(2) A DROP MEMBER OR DESIGNATED BENEFICIARY OF A DROP 3
333	333	MEMBER MAY DIRECT TH E BOARD OF TRUSTEES TO PAY ALL O R A PORTION OF THE 4
334	334	AMOUNT ACCRUED FOR T HE DROP MEMBER’S BENEFIT UNDER SUBS ECTION (H)(2) 5
335	335	OF THIS SECTION DIRE CTLY TO THE CUSTODIA N OF AN ELIGIBLE RET IREMENT PLAN 6
336	336	AS PROVIDED IN TITLE 21, SUBTITLE 6 OF THIS ARTICLE. 7
337	337
338	338	(3) A DROP MEMBER OR DESIGNATED BENEFICIARY OF A DROP 8
339	339	MEMBER IS ELIGIBLE T O RECEIVE THE AMOUNT DUE UNDER THIS SUBSE CTION 9
340	340	WITHIN 90 DAYS AFTER THE : 10
341	341
342	342	(I) DATE OF TERMINATION OF THE DROP MEMBER’S 11
343	343	PARTICIPATION IN THE DROP; 12
344	344
345	345	(II) RECEIPT BY THE BOARD OF TRUSTEES OF A COMPLET ED 13
346	346	APPLICATION TO RECEI VE THE DROP AMOUNT, ON THE FORM THAT THE BOARD OF 14
347	347	TRUSTEES PROVIDES ; AND 15
348	348
349	349	(III) RECEIPT BY THE BOARD OF TRUSTEES OF ANY OTHER 16
350	350	INFORMATION TH AT THE BOARD OF TRUSTEES REQUIRES TO PROCESS PAYMENT OF 17
351	351	THE DROP MEMBER’S ACCOUNT BALANCE TO THE DROP PARTICIPANT, THE 18
352	352	DESIGNATED BENEFICIA RY OF THE DROP PARTICIPANT, OR THE CUSTODIAN OF AN 19
353	353	ELIGIBLE RETIREMENT PLAN. 20
354	354
355	355	(J) (1) AS OF THE FIRST DAY O F THE MONTH FOLLOWIN G TERMINATION 21
356	356	OF A DROP MEMBER’S PARTICIPATION IN T HE DROP, THE BOARD OF TRUSTEES 22
357	357	SHALL COMMENCE AND C ONTINUE PAYMENT OF T HE SERVICE RETIREMEN T 23
358	358	ALLOWANCE , INCLUDING THE COST –OF–LIVING ADJUSTMENTS A S PROVIDED IN 24
359	359	TITLE 29, SUBTITLE 4 OF THIS ARTICLE, TO THE MEMBER AS PRO VIDED IN § 23–401 25
360	360	OF THIS SUBTITLE. 26
361	361
362	362	(2) IF A DROP MEMBER DIES BEFORE T ERMINATION OF THE DROP 27
363	363	MEMBER’S PARTICIPATION IN T HE DROP, THE BOARD OF TRUSTEES SHALL PAY 28
364	364	ANY OPTIONAL ALLOWANCE E LECTED UNDER TITLE 21, SUBTITLE 4 OF THIS 29
365	365	ARTICLE TO THE DESIGNATED BENEFICIA RY OF THE DROP MEMBER. 30
366	366
367	367	(K) (1) A DROP MEMBER IS ELIGIBLE T O APPLY FOR A N ACCIDENTAL 31
368	368	DISABILITY RETIREMEN T ALLOWANCE UNDER § 29–109 OF THIS ARTICLE IF A FTER 32
369	369	THE DROP MEMBER COMMENCES PAR TICIPATION IN THE DROP: 33
370	370	HOUSE BILL 1388 9
371	371
372	372
373	373	(I) THE MEMBER IS TOTALL Y AND PERMANENTLY 1
374	374	INCAPACITATED FOR DU TY AS THE NATURAL AND P ROXIMATE RESULT OF A N 2
375	375	ACCIDENT THAT OCCURR ED IN THE ACTUAL PER FORMANCE OF DUTY , WHILE 3
376	376	PARTICIPATING IN DROP, AT A DEFINITE TIME A ND PLACE, AND WITHOUT WILLFUL 4
377	377	NEGLIGENCE OF THE ME MBER; AND 5
378	378
379	379	(II) THE MEDICAL BOARD CE RTIFIES THAT: 6
380	380
381	381	1. THE MEMBER IS TOTALL Y INCAPACITATED , EITHER 7
382	382	MENTALLY OR PHYSICAL LY, FOR THE FURTHER PERF ORMANCE OF THE NORMAL 8
383	383	DUTIES OF THE DROP MEMBER’S POSITION BY THE OCCURRENCE D ESCRIBED 9
384	384	UNDER ITEM (I) OF THIS PARAGRAPH ; 10
385	385
386	386	2. THE INCAPACITY IS LI KELY TO BE PERMANENT ; AND 11
387	387
388	388	3. THE MEMBER SHOULD BE RETIRED. 12
389	389
390	390	(2) (I) IF A DROP MEMBER IS GRANTED A N ACCIDENTAL 13
391	391	DISABILITY RETIREMEN T ALLOWANCE , THE DROP MEMBER SHALL : 14
392	392
393	393	1. SUBMIT AN APPLICATION TO THE BOARD OF 15
394	394	TRUSTEES, ON THE FORM THE BOARD OF TRUSTEES PROVIDES , TO RECEIVE 16
395	395	PAYMENT OF THE AMOUN T ACCRUED IN THE DROP IN ACCORDANCE WITH 17
396	396	SUBSECTION (I) OF THIS SECTION; 18
397	397
398	398	2. EXECUTE A WRITTEN WA IVER OF ANY BENEFITS TO 19
399	399	WHICH THE DROP MEMBER MAY BE ENTITL ED UNDER THE DROP; AND 20
400	400
401	401	3. SUBMIT AN APPLICATIO N TO RETIRE WITH A N 21
402	402	ACCIDENTAL DISABILITY RETIREMEN T ALLOWANCE , ON THE FORM THE BOARD OF 22
403	403	TRUSTEES PROVIDES , STATING THE EFFECTIV E DATE OF THE DROP MEMBER’S 23
404	404	RETIREMENT AS A N ACCIDENTAL DISABILITY RETIREE . 24
405	405
406	406	(II) ON ACCEPTANCE OF THE APPLICATION FOR PAYM ENT AND 25
407	407	APPLICATION TO RETIR E, THE BOARD OF TRUSTEES SHALL COMMEN CE PAYMENT 26
408	408	OF AN ACCIDENTAL DISABILITY ALLOWANCE TO THE DROP MEMBER AS PROVIDED 27
409	409	IN § 29–110 OF THIS ARTICLE, EXCEPT THAT THE DROP MEMBER’S AVERAGE FINAL 28
410	410	COMPENSATION SHALL B E COMPUTED AS OF THE EFFECTIVE DATE OF TH E DROP 29
411	411	MEMBER’S APPLICATION FOR A SPECIAL DISABILITY R ETIREMENT ALLOWANCE . 30
412	412
413	413	(III) IF AN ACCIDENTAL DISA BILITY IS PAID UNDER 31
414	414	SUBPARAGRAPH (II) OF THIS PARAGR APH, THE BOARD OF TRUSTEES MAY NOT PAY 32 10 HOUSE BILL 1388
415	415
416	416
417	417	ANY OTHER BENEFITS T O THE DROP MEMBER OR BENEFICIAR Y OF THE DROP 1
418	418	MEMBER. 2
419	419
420	420	SECTION 2. AND BE IT FURTHER ENACTED, That : 3
421	421
422	422	(a) On or before July 1, 2025, the State Retirement Agency shall request a 4
423	423	determination letter from the Internal Revenue Service that confirms the continued 5
424	424	qualification under § 401 of the Internal Revenue Code of the Employees’ Pension System 6
425	425	and the Teachers’ Pension System, as amended under Section 1 of this Act. 7
426	426
427	427	(b) Within 5 days after receiving the determination letter requested under 8
428	428	subsection (a) of this section from the Internal Revenue Service, the State Retirement 9
429	429	Agency shall forward a copy of the letter to the Department of Legislative Services, 90 State 10
430	430	Circle, Annapolis, Maryland 21401. 11
431	431
432	432	SECTION 3. AND BE IT FURTHER ENACTED, That: 12
433	433
434	434	(a) Section 1 of this Act shall take effect contingent on the receipt by the State 13
435	435	Retirement Agency of a favorable determination letter requested under Section 2 of this 14
436	436	Act from the Internal Revenue Service confirming that the Employees’ Pension System and 15
437	437	the Teachers’ Pension System, as amended under Section 1 of this Act, are qualified plans 16
438	438	under § 401 of the Internal Revenue Code. 17
439	439
440	440	(b) If a favorable determination letter requested under Section 2 of this Act is 18
441	441	received on or before July 1, 2027, Section 1 of this Act shall take effect on the later of: 19
442	442
443	443	(1) the first day of the month after the State Retirement Agency receives 20
444	444	the determination letter; or 21
445	445
446	446	(2) July 1, 2026. 22
447	447
448	448	(c) If the State Retirement Agency does not receive a favorable determination 23
449	449	letter requested under Section 2 of this Act on or before July 1, 2027, Section 1 of this Act, 24
450	450	with no further action required by the General Assembly, shall be null and void and of no 25
451	451	further force and effect. 26
452	452
453	453	SECTION 4. AND BE IT FURTHER ENACTED, That , subject to Section 3 of this 27
454	454	Act, this Act shall take effect June 1, 2025. 28