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System prepares a separate audited Comprehensive Annual Financial Report which can be obtained from the State Retirement and Pension System of Maryland, 301 West Preston Street, Baltimore, Maryland 21201. Plan Description: The System, which is administered in accordance with Article 73B of the Annotated Code of Maryland, consists of several plans which are managed by the Board of Trustees for the System. All State employees and employees of participating entities are covered by the plans. "Retirement System" — retirement programs for substantially all State employees, teachers, State police and judges who are not members of the State Pension System. "Pension System" — retirement programs for employees and teachers hired after January 1, 1980, and prior employees who have elected to transfer from the Retirement System. The System provides retirement, death and disability benefits in accordance with State statutes. Vesting begins after completing 5 years of service. A member terminating employment before attaining retirement age but after completing 5 years of service becomes eligible for a vested retirement allowance provided the member lives to age 60 (age 62 for the Pension System, age 50 for State Police) and does not withdraw his or her accumulated contributions. Members of the Retirement System may retire with full benefits after attaining the age of 60, or after completing 30 years of service credit regardless of age, or at age 62 or older with specified years of service credit. State police members may retire with full benefits after attaining age 50, or after completing 25 years of service credit regardless of age. The annual benefit for Retirement System members is equal to 1/55 (1.8%) of a member's highest three-year average salary multiplied by the number of years of service credit. A member may retire with reduced benefits after completing 25 years of service, regardless of age. A member of the Pension System shall receive, upon retirement, an annual service retirement allowance equal to 0.8% of the member's highest three-consecutive-year average salary multiplied by the number of years of service credit, with a provision for additional benefits for compensation earned in excess of the Social Security wage base. A member may retire with reduced benefits after attaining age 55 and completing 15 years of service. The annual retirement allowance for a State Police member is equal to 1/45 (2.2%) of a member's highest three-year average salary multiplied by each year of service up to 25 years, plus 1/90 (1.1%) of the member's highest three-year average salary multiplied by each year of service in excess of 25 years. Legislation enacted during the 1998 legislative session changed certain provisions of the Pension System. Effective July 1, 1998, members contribute 2.0% of earnable compensation. The annual pension allowance under a service retirement will generally equal 1.2% of the member's highest three-consecutive-year average salary multiplied by the number of years of service credit on or before June 30, 1998, plus 1.4% of the highest three- consecutive-year average salary multiplied by the number of years of service credit after July 1, 1998. Funding Policy: The State's required contributions are based upon actuarial valuations. Effective July 1, 1980, in accordance with the law governing the Systems, all benefits of the System are funded in advance. The entry age normal cost method is the actuarial cost method used to determine the employers' contribution rates and the actuarial accrued liability. Members of the Retirement System are required to contribute to the System a fixed percentage of their regular salaries and wages (7.0% or 5.0% depending on the retirement plan selected). Members of the Pension System are required to contribute to the System 5.0% of their regular salaries and wages which exceed the Social Security wage base. State Police members are required to contribute 8.0% of their regular salaries and wages to the System. All contributions are deducted from each member's salary, and wage payments are remitted to the System on a regular, periodic basis. The contribution requirements of the System members and the State are established and may be amended by the Board of Trustees for the System. During 1998, the State's and its participating political subdivisions made their required contributions totaling $735,788,000 which was 12.47% of covered payroll. The State makes non-employer contributions to the System for local school system teachers. The covered payroll amount includes amounts for employees for whom the State pays retirement benefits, but does not pay the payroll. As of June 30, 1998, 1997 and 1996 the State had made all required contributions, and thus as of June 30, 1998, 1997 and 1996 the State did not have a net pension obligation. |
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Report of the Comptroller, 1997-98
| Volume 197, Page 69 View pdf image (33K) |
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