MD
Maryland Senate Bill SB862

Maryland 2025 Regular Session

Maryland Senate Bill SB862 Compare Versions

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33 EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
44 [Brackets] indicate matter deleted from existing law.
5- Underlining indicates amendments to bill.
6- Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7-amendment.
85 *sb0862*
96
107 SENATE BILL 862
118 P6 5lr2373
12- CF HB 1072
13-By: Senator M. Jackson (Chair, Joint Committee on Pensions)
9+ CF 5lr2374
10+By: Senator Jackson (Chair, Joint Committee on Pensions)
1411 Introduced and read first time: January 28, 2025
1512 Assigned to: Budget and Taxation
16-Committee Report: Favorable with amendments
17-Senate action: Adopted
18-Read second time: February 21, 2025
1913
20-CHAPTER ______
14+A BILL ENTITLED
2115
2216 AN ACT concerning 1
2317
2418 State Retirement and Pension System – Administrative Fees – Repeal 2
2519
2620 FOR the purpose of requiring the Board of Trustees for the State Retirement and Pension 3
2721 System to certify certain employer contribution rates each fiscal year; requiring the 4
2822 employer contribution rates to include recognition of certain administrative and 5
2923 operational expenses; repealing a requirement that certain administrative and 6
3024 operational expenses of the State Retirement and Pension System and the State 7
3125 Retirement Agency be funded by charging each participating employer an 8
32-administrative fee for each system participant; clarifying that certain payments 9
33-certified by the Board of Trustees to be paid by local employers in a certain fiscal 10
34-year shall be paid; requiring the Board of Trustees to fund certain operating 11
35-expenses of the State Retirement Agency through the accumulation fund; and 12
36-generally relating to the funding of the administrative and operating expenses of the 13
37-State Retirement and Pension System and the State Retirement Agency. 14
26+administrative fee for each system participant; requiring the Board of Trustees to 9
27+fund certain operating expenses of the State Retirement Agency through the 10
28+accumulation fund; and generally relating to the funding of the administrative and 11
29+operating expenses of the State Retirement and Pension System and the State 12
30+Retirement Agency. 13
3831
39-BY repealing and reenacting, with amendments, 15
40- Article – State Personnel and Pensions 16
41-Section 21–125, 21–302, 21–303, and 21–315 17
42- Annotated Code of Maryland 18
43- (2024 Replacement Volume and 2024 Supplement) 19
32+BY repealing and reenacting, with amendments, 14
33+ Article – State Personnel and Pensions 15
34+Section 21–125, 21–302, 21–303, and 21–315 16
35+ Annotated Code of Maryland 17
36+ (2024 Replacement Volume and 2024 Supplement) 18
4437
45-BY repealing and reenacting, without amendments, 20
46- Article – State Personnel and Pensions 21
47-Section 21–301 22
48- Annotated Code of Maryland 23 2 SENATE BILL 862
38+BY repealing and reenacting, without amendments, 19
39+ Article – State Personnel and Pensions 20
40+Section 21–301 21
41+ Annotated Code of Maryland 22
42+ (2024 Replacement Volume and 2024 Supplement) 23
4943
50-
51- (2024 Replacement Volume and 2024 Supplement) 1
52-
53-BY repealing 2
54- Article – State Personnel and Pensions 3
55-Section 21–316 4
56- Annotated Code of Maryland 5
57- (2024 Replacement Volume and 2024 Supplement) 6
58-
59- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 7
60-That the Laws of Maryland read as follows: 8
61-
62-Article – State Personnel and Pensions 9
63-
64-21–125. 10
65-
66- (a) The Board of Trustees shall designate an actuary who shall: 11
67-
68- (1) give technical advice to the Board of Trustees on the operation of the 12
69-funds of the several systems; and 13
70-
71- (2) perform other related duties that the Board of Trustees requires. 14
72-
73- (b) (1) On the basis of actuarial assumptions that the Board of Trustees 15
74-adopts, each year the actuary shall make a valuation of the assets and liabilities of the 16
75-funds of the several systems AND SHALL RECOMMEND THE RATES OF EMPLOYE R 17
76-CONTRIBUTIONS TO BE CERTIFIED BY THE BOARD OF TRUSTEES. 18
77-
78- (2) (I) 1. Each year, ON THE RECOMMENDATIO N OF THE 19
79-ACTUARY, the Board of Trustees shall certify to the Secretary of Budget and Management 20
80-and to the Governor the rates of employer contributions. 21
81-
82- 2. EACH YEAR, ON THE RECOMMENDATIO N OF THE 22
83-ACTUARY, THE BOARD OF TRUSTEES SHALL CERTIF Y TO ALL OTHER PARTI CIPATING 23
84-EMPLOYERS THE RATES OF EMPLOYER CONTRIBU TIONS. 24
85-
86- (II) THE NORMAL CONTRIBUTI ON RATE RECOMMENDED BY THE 25
87-ACTUARY AND CERTIFIE D BY THE BOARD OF TRUSTEES FOR ALL EMPL OYERS 26
88-UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH FO R EACH FISCAL YEAR S HALL 27
89-INCLUDE AN AMOUNT NE CESSARY FOR THE ADMI NISTRATIVE AND OPERA TIONAL 28
90-EXPENSES OF THE BOARD OF TRUSTEES AND THE STATE RETIREMENT AGENCY, 29
91-EXCLUDING THE ADMINI STRATIVE AND OPERATI ONAL EXPENSES OF THE 30
92-INVESTMENT DIVISION. 31
93-
94- (3) For purposes of actuarial valuation, the Board of Trustees may adopt a 32
95-generally accepted ACTUARIAL method for determining the value of the assets held by the 33
96-several systems. 34 SENATE BILL 862 3
44+BY repealing 24
45+ Article – State Personnel and Pensions 25
46+Section 21–316 26
47+ Annotated Code of Maryland 27
48+ (2024 Replacement Volume and 2024 Supplement) 28 2 SENATE BILL 862
9749
9850
9951
100- (4) For general ledger accounting and financial reporting, the Board of 1
101-Trustees shall use generally accepted accounting principles. 2
52+ SECTION 1. BE IT ENACTED BY THE GENE RAL ASSEMBLY OF MARYLAND, 1
53+That the Laws of Maryland read as follows: 2
10254
103- (c) (1) At least once in each 5–year period, the actuary shall make: 3
55+Article – State Personnel and Pensions 3
10456
105- (i) actuarial investigations into the compensation, mortality, and 4
106-service experience of the participants of each of the several systems; and 5
57+21–125. 4
10758
108- (ii) a valuation of the assets and liabilities of the funds of each of the 6
109-several systems. 7
59+ (a) The Board of Trustees shall designate an actuary who shall: 5
11060
111- (2) The Board of Trustees shall: 8
61+ (1) give technical advice to the Board of Trustees on the operation of the 6
62+funds of the several systems; and 7
11263
113- (i) review the results of the investigations and valuations of the 9
114-actuary; and 10
64+ (2) perform other related duties that the Board of Trustees requires. 8
11565
116- (ii) adopt the actuarial assumptions for each of the several systems 11
117-as the Board of Trustees considers necessary. 12
66+ (b) (1) On the basis of actuarial assumptions that the Board of Trustees 9
67+adopts, each year the actuary shall make a valuation of the assets and liabilities of the 10
68+funds of the several systems AND SHALL RECOMMEND THE RATES OF EMPLOYE R 11
69+CONTRIBUTIONS TO BE CERTIFIED BY THE BOARD OF TRUSTEES. 12
11870
119-21–301. 13
71+ (2) (I) 1. Each year, ON THE RECOMMENDATION O F THE 13
72+ACTUARY, the Board of Trustees shall certify to the Secretary of Budget and Management 14
73+and to the Governor the rates of employer contributions. 15
12074
121- (a) In each State system, there is: 14
75+ 2. EACH YEAR, ON THE RECOMMENDATIO N OF THE 16
76+ACTUARY, THE BOARD OF TRUSTEES SHALL CERTIF Y TO ALL OTHER PARTI CIPATING 17
77+EMPLOYERS THE RATES OF EMPLOYER CONTRIBU TIONS. 18
12278
123- (1) an accumulation fund; 15
79+ (II) THE NORMAL CONTRIBUTI ON RATE RECOMMENDED BY THE 19
80+ACTUARY AND CERTIFIE D BY THE BOARD OF TRUSTEES FOR ALL EMPL OYERS 20
81+UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH FO R EACH FISCAL YEAR S HALL 21
82+INCLUDE AN AMOUNT NE CESSARY FOR THE ADMI NISTRATIVE AND OPERA TIONAL 22
83+EXPENSES OF THE BOARD OF TRUSTEES AND THE STATE RETIREMENT AGENCY, 23
84+EXCLUDING THE ADMINI STRATIVE AND OPERATI ONAL EXPENSES OF THE 24
85+INVESTMENT DIVISION. 25
12486
125- (2) an annuity savings fund; and 16
87+ (3) For purposes of actuarial valuation, the Board of Trustees may adopt a 26
88+generally accepted method for determining the value of the assets held by the several 27
89+systems. 28
12690
127- (3) an expense fund. 17
91+ (4) For general ledger accounting and financial reporting, the Board of 29
92+Trustees shall use generally accepted accounting principles. 30
12893
129- (b) The Board of Trustees shall credit the assets of each State system to the 18
130-appropriate fund of the State system according to the purpose for which the assets are held. 19
94+ (c) (1) At least once in each 5–year period, the actuary shall make: 31
95+ SENATE BILL 862 3
13196
132-21–302. 20
13397
134- (a) The following are obligations of the State: 21
98+ (i) actuarial investigations into the compensation, mortality, and 1
99+service experience of the participants of each of the several systems; and 2
135100
136- (1) the payment of all allowances and other benefits payable under this 22
137-Division II; 23
101+ (ii) a valuation of the assets and liabilities of the funds of each of the 3
102+several systems. 4
138103
139- (2) the creation and maintenance of reserves in the accumulation funds of 24
140-the several systems; AND 25
104+ (2) The Board of Trustees shall: 5
141105
142- (3) the crediting of regular interest to the annuity savings funds of the 26
143-several systems[; and 27
106+ (i) review the results of the investigations and valuations of the 6
107+actuary; and 7
108+
109+ (ii) adopt the actuarial assumptions for each of the several systems 8
110+as the Board of Trustees considers necessary. 9
111+
112+21–301. 10
113+
114+ (a) In each State system, there is: 11
115+
116+ (1) an accumulation fund; 12
117+
118+ (2) an annuity savings fund; and 13
119+
120+ (3) an expense fund. 14
121+
122+ (b) The Board of Trustees shall credit the assets of each State system to the 15
123+appropriate fund of the State system according to the purpose for which the assets are held. 16
124+
125+21–302. 17
126+
127+ (a) The following are obligations of the State: 18
128+
129+ (1) the payment of all allowances and other benefits payable under this 19
130+Division II; 20
131+
132+ (2) the creation and maintenance of reserves in the accumulation funds of 21
133+the several systems; AND 22
134+
135+ (3) the crediting of regular interest to the annuity savings funds of the 23
136+several systems[; and 24
137+
138+ (4) except as provided in § 21–316 of this subtitle, the payment of the 25
139+expenses for administration and operation of the several systems]. 26
140+
141+ (b) The assets of the several systems shall be used to pay the obligations of the 27
142+State specified in this section. 28
144143 4 SENATE BILL 862
145144
146145
147- (4) except as provided in § 21–316 of this subtitle, the payment of the 1
148-expenses for administration and operation of the several systems]. 2
146+ (c) Each fiscal year the State shall pay to the accumulation fund of each State 1
147+system at least an amount that when combined with the amount in the accumulation fund 2
148+of the system is sufficient to provide the allowances and other benefits payable out of the 3
149+fund during that fiscal year. 4
149150
150- (b) The assets of the several systems shall be used to pay the obligations of the 3
151-State specified in this section. 4
151+21–303. 5
152152
153- (c) Each fiscal year the State shall pay to the accumulation fund of each State 5
154-system at least an amount that when combined with the amount in the accumulation fund 6
155-of the system is sufficient to provide the allowances and other benefits payable out of the 7
156-fund during that fiscal year. 8
153+ (a) The Board of Trustees shall credit to the accumulation fund of each State 6
154+system: 7
157155
158-21–303. 9
156+ (1) all employer contributions to the State system; 8
159157
160- (a) The Board of Trustees shall credit to the accumulation fund of each State 10
161-system: 11
158+ (2) all interest, dividends, and other income derived from the assets of the 9
159+State system; and 10
162160
163- (1) all employer contributions to the State system; 12
161+ (3) amounts transferred under § 21–311(c) or (d) of this subtitle. 11
164162
165- (2) all interest, dividends, and other income derived from the assets of the 13
166-State system; and 14
163+ (b) The Board of Trustees shall pay from the accumulation fund of a State system 12
164+all benefits payable under that State system except for benefits payable from the annuity 13
165+savings fund of that State system. 14
167166
168- (3) amounts transferred under § 21–311(c) or (d) of this subtitle. 15
167+ (c) (1) Each year the Board of Trustees shall transfer from the accumulation 15
168+fund of each State system to each member’s account in the annuity savings fund of that 16
169+State system regular interest on the account as provided in this Division II. 17
169170
170- (b) The Board of Trustees shall pay from the accumulation fund of a State system 16
171-all benefits payable under that State system except for benefits payable from the annuity 17
172-savings fund of that State system. 18
171+ (2) If a retiree who has retired because of disability is restored to 18
172+membership, the Board of Trustees shall transfer from the accumulation fund of the 19
173+appropriate State system to the annuity savings fund of that State system an amount equal 20
174+to the remaining portion of the retiree’s annuity reserve. 21
173175
174- (c) (1) Each year the Board of Trustees shall transfer from the accumulation 19
175-fund of each State system to each member’s account in the annuity savings fund of that 20
176-State system regular interest on the account as provided in this Division II. 21
176+ (d) [(1)] Each year, the Board of Trustees shall transfer from the accumulation 22
177+fund of each State system to the expense fund of that system the amounts required by § 23
178+21–315 of this subtitle. 24
177179
178- (2) If a retiree who has retired because of disability is restored to 22
179-membership, the Board of Trustees shall transfer from the accumulation fund of the 23
180-appropriate State system to the annuity savings fund of that State system an amount equal 24
181-to the remaining portion of the retiree’s annuity reserve. 25
180+ [(2) On or before June 30 each year, the administrative fees that are paid 25
181+by participating employers as provided in § 21–316 of this subtitle for that year shall be 26
182+reimbursed to the accumulation fund of each State system for the amount transferred to 27
183+the expense fund of that system under paragraph (1) of this subsection.] 28
182184
183- (d) [(1)] Each year, the Board of Trustees shall transfer from the accumulation 26
184-fund of each State system to the expense fund of that system the amounts required by § 27
185-21–315 of this subtitle. 28
185+21–315. 29
186186
187- [(2) On or before June 30 each year, the administrative fees that are paid 29
188-by participating employers as provided in § 21–316 of this subtitle for that year shall be 30
189-reimbursed to the accumulation fund of each State system for the amount transferred to 31
190-the expense fund of that system under paragraph (1) of this subsection.] 32
187+ (a) The Board of Trustees shall credit to the expense fund of each State system 30
188+its pro rata share of: 31
191189
192-21–315. 33
193- SENATE BILL 862 5
190+ (1) the amount [provided in the annual State budget to pay the 32
191+administrative and operational expenses of the Board of Trustees and the State Retirement 33
192+Agency] ATTRIBUTABLE TO THE ADMINISTRATIVE AND O PERATIONAL EXPENSES OF 34 SENATE BILL 862 5
194193
195194
196- (a) The Board of Trustees shall credit to the expense fund of each State system 1
197-its pro rata share of: 2
195+THE BOARD OF TRUSTEES AND THE STATE RETIREMENT AGENCY AS CERTIFIED B Y 1
196+THE BOARD OF TRUSTEES UNDER § 21–125 OF THIS TITLE; 2
198197
199- (1) the amount [provided in the annual State budget to pay the 3
200-administrative and operational expenses of the Board of Trustees and the State Retirement 4
201-Agency] ATTRIBUTABLE TO THE ADMINISTRATIVE AND O PERATIONAL EXPENSES OF 5
202-THE BOARD OF TRUSTEES AND THE STATE RETIREMENT AGENCY AS CERTIFIED B Y 6
203-THE BOARD OF TRUSTEES UNDER § 21–125 OF THIS TITLE; 7
198+ (2) the amounts authorized by the Board of Trustees under this section for 3
199+investment management services, including personnel and operational expenses of the 4
200+Investment Division; and 5
204201
205- (2) the amounts authorized by the Board of Trustees under this section for 8
206-investment management services, including personnel and operational expenses of the 9
207-Investment Division; and 10
202+ (3) the amount authorized by the Board of Trustees to implement a closing 6
203+agreement with the Internal Revenue Service regarding former members of the Employees’ 7
204+Retirement System or the Teachers’ Retirement System who elected to become members of 8
205+or participate in those State systems under former Article 73B, §§ 2–206 and 3–206 of the 9
206+Code. 10
208207
209- (3) the amount authorized by the Board of Trustees to implement a closing 11
210-agreement with the Internal Revenue Service regarding former members of the Employees’ 12
211-Retirement System or the Teachers’ Retirement System who elected to become members of 13
212-or participate in those State systems under former Article 73B, §§ 2–206 and 3–206 of the 14
213-Code. 15
208+ (b) (1) The Board of Trustees shall pay from the expense fund of each State 11
209+system its pro rata share of: 12
214210
215- (b) (1) The Board of Trustees shall pay from the expense fund of each State 16
216-system its pro rata share of: 17
211+ (i) the administrative and operational expenses of the Board of 13
212+Trustees and the State Retirement Agency, in accordance with the annual State budget; 14
217213
218- (i) the administrative and operational expenses of the Board of 18
219-Trustees and the State Retirement Agency, in accordance with the annual State budget; 19
214+ (ii) the amounts as authorized by the Board of Trustees necessary 15
215+for investment management services, including personnel and operational expenses of the 16
216+Investment Division; and 17
220217
221- (ii) the amounts as authorized by the Board of Trustees necessary 20
222-for investment management services, including personnel and operational expenses of the 21
223-Investment Division; and 22
218+ (iii) the amounts as authorized by the Board of Trustees necessary to 18
219+implement a closing agreement with the Internal Revenue Service regarding former 19
220+members of the Employees’ Retirement System or the Teachers’ Retirement System who 20
221+elected to become members of or participate in those State systems under former Article 21
222+73B, §§ 2–206 and 3–206 of the Code. 22
224223
225- (iii) the amounts as authorized by the Board of Trustees necessary to 23
226-implement a closing agreement with the Internal Revenue Service regarding former 24
227-members of the Employees’ Retirement System or the Teachers’ Retirement System who 25
228-elected to become members of or participate in those State systems under former Article 26
229-73B, §§ 2–206 and 3–206 of the Code. 27
224+ (2) The amounts for the personnel and operational expenses of the 23
225+Investment Division shall be paid out of the accumulation fund of each State system on a 24
226+pro rata basis [and may not be paid by participating employers as provided in § 21–316 of 25
227+this subtitle]. 26
230228
231- (2) The amounts for the personnel and operational expenses of the 28
232-Investment Division shall be paid out of the accumulation fund of each State system on a 29
233-pro rata basis [and may not be paid by participating employers as provided in § 21–316 of 30
234-this subtitle]. 31
229+ (c) Each year the Board of Trustees shall estimate the amount, not exceeding 27
230+0.22% of active member payroll, retiree benefits, and former member compensation, 28
231+necessary for the administrative and operational expenses of the Board of Trustees and the 29
232+State Retirement Agency. 30
235233
236- (c) Each year the Board of Trustees shall estimate the amount, not exceeding 32
237-0.22% of active member payroll, retiree benefits, and former member compensation, 33
238-necessary for the administrative and operational expenses of the Board of Trustees and the 34
239-State Retirement Agency. 35
234+ (d) (1) Each quarter of the fiscal year the Board of Trustees shall estimate 31
235+one–fourth of an amount, not exceeding 0.5% of the market value as of the last day of the 32
236+preceding quarter of invested assets that are externally managed exclusive of assets 33
237+invested in real estate or alternative investments, necessary to procure and retain 34
238+investment management services other than external real estate or alternative investment 35
239+management services. 36
240240 6 SENATE BILL 862
241241
242242
243- (d) (1) Each quarter of the fiscal year the Board of Trustees shall estimate 1
244-one–fourth of an amount, not exceeding 0.5% of the market value as of the last day of the 2
245-preceding quarter of invested assets that are externally managed exclusive of assets 3
246-invested in real estate or alternative investments, necessary to procure and retain 4
247-investment management services other than external real estate or alternative investment 5
248-management services. 6
243+ (2) The Board of Trustees is not limited in the amount of investment 1
244+manager fees that the Board of Trustees may pay as necessary for external real estate or 2
245+alternative investment management services. 3
249246
250- (2) The Board of Trustees is not limited in the amount of investment 7
251-manager fees that the Board of Trustees may pay as necessary for external real estate or 8
252-alternative investment management services. 9
247+ (e) (1) The amounts estimated under subsection (c) of this section shall be paid 4
248+into the expense funds of the several systems during the ensuing year on a pro rata basis 5
249+according to the total membership of each system. 6
253250
254- (e) (1) The amounts estimated under subsection (c) of this section shall be paid 10
255-into the expense funds of the several systems during the ensuing year on a pro rata basis 11
256-according to the total membership of each system. 12
251+ (2) The amounts estimated under subsection (d) of this section shall be paid 7
252+into the expense funds of the several systems during the ensuing year on a pro rata basis 8
253+according to the total assets held by each system. 9
257254
258- (2) The amounts estimated under subsection (d) of this section shall be paid 13
259-into the expense funds of the several systems during the ensuing year on a pro rata basis 14
260-according to the total assets held by each system. 15
255+ (f) The Board of Trustees may combine the expense funds of the several systems 10
256+for budgetary and administrative efficiency. 11
261257
262- (f) The Board of Trustees may combine the expense funds of the several systems 16
263-for budgetary and administrative efficiency. 17
258+ (g) (1) (i) On or before December 31 of each year, the Board of Trustees 12
259+shall report to the General Assembly the actual amount spent for investment management 13
260+services during the preceding fiscal year. 14
264261
265- (g) (1) (i) On or before December 31 of each year, the Board of Trustees 18
266-shall report to the General Assembly the actual amount spent for investment management 19
267-services during the preceding fiscal year. 20
262+ (ii) The report required under subparagraph (i) of this paragraph 15
263+shall include the amount of carried interest on any assets of the system. 16
268264
269- (ii) The report required under subparagraph (i) of this paragraph 21
270-shall include the amount of carried interest on any assets of the system. 22
265+ (2) On or before December 31 each year, the Board of Trustees shall report 17
266+to the General Assembly the actual amount spent for Investment Division operations 18
267+during the preceding fiscal year. 19
271268
272- (2) On or before December 31 each year, the Board of Trustees shall report 23
273-to the General Assembly the actual amount spent for Investment Division operations 24
274-during the preceding fiscal year. 25
269+[21–316. 20
275270
276-[21–316. 26
271+ (a) (1) In this section the following words have the meanings indicated. 21
277272
278- (a) (1) In this section the following words have the meanings indicated. 27
273+ (2) “Administrative fees” means the actual administrative and operational 22
274+expenses incurred by the Board of Trustees and the State Retirement Agency as of June 30 23
275+of the second prior fiscal year. 24
279276
280- (2) “Administrative fees” means the actual administrative and operational 28
281-expenses incurred by the Board of Trustees and the State Retirement Agency as of June 30 29
282-of the second prior fiscal year. 30
277+ (3) “Library” means a library that is established or operates under the 25
278+Education Article. 26
283279
284- (3) “Library” means a library that is established or operates under the 31
285-Education Article. 32
280+ (4) “Local employer” means a participating employer other than the State. 27
286281
287- (4) “Local employer” means a participating employer other than the State. 33
288- SENATE BILL 862 7
282+ (b) (1) Subject to paragraph (3) of this subsection, for each fiscal year, the 28
283+State and each local employer shall pay to the Board of Trustees their pro rata shares of 29
284+the administrative fees. 30
285+
286+ (2) The pro rata share of the administrative fees of the State and of each 31
287+local employer for each fiscal year shall be based on the number of members of the several 32
288+systems employed by the State or local employer as of June 30 of the second prior fiscal 33
289+year compared to the total membership of the several systems as of that date. 34 SENATE BILL 862 7
289290
290291
291- (b) (1) Subject to paragraph (3) of this subsection, for each fiscal year, the 1
292-State and each local employer shall pay to the Board of Trustees their pro rata shares of 2
293-the administrative fees. 3
294292
295- (2) The pro rata share of the administrative fees of the State and of each 4
296-local employer for each fiscal year shall be based on the number of members of the several 5
297-systems employed by the State or local employer as of June 30 of the second prior fiscal 6
298-year compared to the total membership of the several systems as of that date. 7
293+ (3) The State shall pay the pro rata share under this section of each library. 1
299294
300- (3) The State shall pay the pro rata share under this section of each library. 8
295+ (4) The administrative fees used to determine the pro rata shares under 2
296+this subsection may not include costs for the personnel and operational expenses of the 3
297+Investment Division. 4
301298
302- (4) The administrative fees used to determine the pro rata shares under 9
303-this subsection may not include costs for the personnel and operational expenses of the 10
304-Investment Division. 11
299+ (c) As part of its annual budget submission for a fiscal year, the Board of Trustees 5
300+shall certify to the Secretary of Budget and Management the percentage of the total 6
301+membership of the several systems that is employed by the State, the libraries, and each 7
302+local employer as of June 30 of the second prior fiscal year. 8
305303
306- (c) As part of its annual budget submission for a fiscal year, the Board of Trustees 12
307-shall certify to the Secretary of Budget and Management the percentage of the total 13
308-membership of the several systems that is employed by the State, the libraries, and each 14
309-local employer as of June 30 of the second prior fiscal year. 15
304+ (d) (1) The Governor shall include in the budget bill an appropriation to the 9
305+accumulation funds of the State Retirement and Pension System that equals the authorized 10
306+administrative fees for the fiscal year. 11
310307
311- (d) (1) The Governor shall include in the budget bill an appropriation to the 16
312-accumulation funds of the State Retirement and Pension System that equals the authorized 17
313-administrative fees for the fiscal year. 18
308+ (2) The amounts payable by the State under this section with respect to 12
309+members employed by each State unit shall be charged against the budget of that unit. 13
314310
315- (2) The amounts payable by the State under this section with respect to 19
316-members employed by each State unit shall be charged against the budget of that unit. 20
311+ (3) The State shall pay its pro rata share of the amount of administrative 14
312+fees authorized in the State budget to the Board of Trustees on July 1 of the applicable 15
313+fiscal year. 16
317314
318- (3) The State shall pay its pro rata share of the amount of administrative 21
319-fees authorized in the State budget to the Board of Trustees on July 1 of the applicable 22
320-fiscal year. 23
315+ (e) (1) On or before October 1 each year, the Board of Trustees shall: 17
321316
322- (e) (1) On or before October 1 each year, the Board of Trustees shall: 24
317+ (i) certify to each local employer other than a library the amount 18
318+payable by the local employer for the next fiscal year that is equal to the percentage 19
319+certified under subsection (c) of this section multiplied by the amount of administrative 20
320+fees; and 21
323321
324- (i) certify to each local employer other than a library the amount 25
325-payable by the local employer for the next fiscal year that is equal to the percentage 26
326-certified under subsection (c) of this section multiplied by the amount of administrative 27
327-fees; and 28
322+ (ii) notify the Secretary of Budget and Management and the 22
323+Department of Legislative Services of the certifications sent under item (i) of this 23
324+paragraph. 24
328325
329- (ii) notify the Secretary of Budget and Management and the 29
330-Department of Legislative Services of the certifications sent under item (i) of this 30
331-paragraph. 31
326+ (2) On or before October 1, January 1, April 16, and June 1 of the fiscal 25
327+year immediately following the certification required in paragraph (1) of this subsection, 26
328+each local employer shall pay to the Board of Trustees 25% of the amount certified to the 27
329+local employer by the Board of Trustees under paragraph (1) of this subsection. 28
332330
333- (2) On or before October 1, January 1, April 16, and June 1 of the fiscal 32
334-year immediately following the certification required in paragraph (1) of this subsection, 33
335-each local employer shall pay to the Board of Trustees 25% of the amount certified to the 34
336-local employer by the Board of Trustees under paragraph (1) of this subsection. 35
331+ (3) If a local employer does not pay the amounts required under this section 29
332+within the time required, the local employer is liable for interest on delinquent amounts at 30
333+a rate of 4% a year until payment. 31
334+
335+ (4) The Secretary of the Board of Trustees may allow a grace period not to 32
336+exceed 10 calendar days for payment of the amounts certified under this section. 33
337337 8 SENATE BILL 862
338338
339339
340- (3) If a local employer does not pay the amounts required under this section 1
341-within the time required, the local employer is liable for interest on delinquent amounts at 2
342-a rate of 4% a year until payment. 3
340+ (5) On notification by the Secretary of the Board of Trustees that a 1
341+delinquency exists, the State Comptroller immediately shall exercise the right of setoff 2
342+against any money due or coming due to that local employer from the State. 3
343343
344- (4) The Secretary of the Board of Trustees may allow a grace period not to 4
345-exceed 10 calendar days for payment of the amounts certified under this section. 5
344+ (f) On receipt of payments under this section, the Board of Trustees shall credit 4
345+these amounts to the accumulation fund of the appropriate State system.] 5
346346
347- (5) On notification by the Secretary of the Board of Trustees that a 6
348-delinquency exists, the State Comptroller immediately shall exercise the right of setoff 7
349-against any money due or coming due to that local employer from the State. 8
347+ SECTION 2. AND BE IT FURTHER ENACTED, That , for fiscal year 2026, the 6
348+amounts for the administrative and operational expenses of the Board of Trustees for the 7
349+State Retirement and Pension System and the State Retirement Agency shall be paid out 8
350+of the accumulation fund of each State system on a pro rata basis. 9
350351
351- (f) On receipt of payments under this section, the Board of Trustees shall credit 9
352-these amounts to the accumulation fund of the appropriate State system.] 10
352+ SECTION 3. AND BE IT FURTHER ENACTED, That , for fiscal year 2027, the 10
353+administrative and operational expenses of the Board of Trustees for the State Retirement 11
354+and Pension System and the State Retirement Agency shall be included in the employer 12
355+contribution rates certified by the Board of Trustees for the State Retirement and Pension 13
356+System as provided in Section 1 of this Act. 14
353357
354- SECTION 2. AND BE IT FURTHER ENACTED, That, notwithstanding Section 1 of 11
355-this Act, on or before June 1, 2025, each local employer shall pay to the Board of Trustees 12
356-for the State Retirement and Pension System the amounts certified to be paid by each local 13
357-employer for fiscal year 2025 to the Board of Trustees in accordance with § 21–316 of the 14
358-State Personnel and Pensions Article in effect at the time of certification. 15
359-
360- SECTION 2. 3. AND BE IT FURTHER ENACTED, That, for fiscal year 2026, the 16
361-amounts for the administrative and operational expenses of the Board of Trustees for the 17
362-State Retirement and Pension System and the State Retirement Agency shall be paid out 18
363-of the accumulation fund of each State system on a pro rata basis. 19
364-
365- SECTION 3. 4. AND BE IT FURTHER ENACTED, That, for fiscal year 2027 and 20
366-each fiscal year thereafter, the administrative and operational expenses of the Board of 21
367-Trustees for the State Retirement and Pension System and the State Retirement Agency 22
368-shall be included in the employer contribution rates certified by the Board of Trustees for 23
369-the State Retirement and Pension System as provided in Section 1 of this Act. 24
370-
371- SECTION 4. 5. AND BE IT FURTHER ENACTED, That this Act shall take effect 25
372-June 1, 2025. 26
373-
374-
375-
376-
377-Approved:
378-________________________________________________________________________________
379- Governor.
380-________________________________________________________________________________
381- President of the Senate.
382-________________________________________________________________________________
383- Speaker of the House of Delegates.
358+ SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect June 15
359+1, 2025. 16