16. Retirement and Pension Systems:

Maryland State Retirement and Pension Systems (System):

The State contributes to the Maryland State Retirement and Pension Systems (System), an agent
multiple-employer public employee retirement system established by the State to provide pension benefits for
State employees (other than employees covered by the Mass Transit Administration Pension Plan described later)
and employees of 103 participating municipal corporations within the State. Additionally, the System provides
benefits for the University of Maryland Medical System (a private, nonprofit, nonstock corporation), the Maryland
Automobile Insurance Fund, and the Injured Workers' Insurance Fund (none of which are in the State's reporting
entity). The non-State entities that participate within the System receive separate actuarial valuations in order to
determine their respective funding rates and actuarial liabilities. Retirement benefits are paid from the State
System's pooled assets rather than from assets relating to a particular plan participant. The System is considered
part of the State's financial reporting entity and is included in the State's financial statements as a Pension Trust
Fund. For the year ended June 30, 1992, excluding the participating municipalities, the covered payroll was
$4,487,636,000 and the total payroll was $4,548,175,000.

Plan Description:

The System, which is administered in accordance with Article 73B of the Annotated Code of Maryland,
consists of the following systems which are managed by the Board of Trustees for the System. All retirement and
pension systems discussed herein are included in the System. All State employees and employees of the
participating municipalities are covered by the systems.

"Retirement Systems"—retirement programs for substantially all State employees, teachers, State and
Natural Resource police and judges who are not members of the State Pension System.

"Pension Systems"—retirement programs for employees and teachers hired after January 1,1980, and prior
employees who have elected to transfer from the Retirement Systems.

At June 30, 1992, membership (excluding participating municipalities) in the System consisted of the
following:

Retirees and beneficiaries currently receiving benefits and terminated employees entitled to
benefits but not yet receiving them:
Retirement Systems ...........................................................	46,472
Pension Systems ..............................................................	25,589
Current employees:
Vested:
Retirement Systems ...........................................................	38,694
Pension Systems ..............................................................	63,358
Nonvested:
Retirement Systems ...........................................................	2,910
Pension Systems ..............................................................	34,158
Total members ..............................................................	211,181

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 Systems, 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. A member of the Pension Systems may
retire with full benefits 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 of a member's high 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 .8% of the member's high 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 V45
of a member's high three-year average salary multiplied by each year of service up to 25 years, plus 1/so of the
member's high three-year average salary multiplied by each year of service in excess of 25 years. The retirement
allowance of retired members of the Systems is subject to annual adjustments to reflect increases in cost of living,
not to exceed the growth in the Consumer Price Index.

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