2013 Maryland Code
STATE PERSONNEL AND PENSIONS
§ 24-401 - Service retirement

§24-401.

(a) (1) (i) This paragraph applies to an individual who is a member on or before June 30, 2011.

(ii) A member may retire with a normal service retirement allowance if:

1. on or before the date of retirement, the member:

A. has at least 22 years of eligibility service; or

B. is at least 50 years old; and

2. the member completes and submits a written application to the Board of Trustees, on the form that the Board of Trustees provides, stating the date when the member desires to retire.

(2) (i) This paragraph applies to an individual who becomes a member on or after July 1, 2011.

(ii) A member may retire with a normal service retirement allowance if:

1. on or before the date of retirement, the member:

A. has at least 25 years of eligibility service; or

B. is at least 50 years old; and

2. the member completes and submits a written application to the Board of Trustees, on the form that the Board of Trustees provides, stating the date when the member desires to retire.

(b) (1) Subject to the approval of the Board of Trustees, the Secretary of State Police may order a member who is at least 50 years old to retire on the first day of the month after the member is notified of the Secretary’s order.

(2) Before approving the Secretary’s order, the Board of Trustees shall give the member at least 30 days’ notice and an opportunity to be heard.

(c) Except for the Secretary of State Police, a member shall retire with a normal service retirement allowance not later than the first day of the month after the member becomes 60 years old.

(d) (1) Except as provided in paragraph (2) of this subsection, on retirement under this section, a member is entitled to receive a normal service retirement allowance that equals 2.55% of the member’s average final compensation multiplied by each year of the member’s years of creditable service.

(2) A member’s normal service retirement allowance may not exceed 71.4% of the member’s average final compensation.

(e) (1) Subject to paragraph (2) of this subsection, a retiree, or a beneficiary of a retiree, who retires on or before June 30, 1999 with a service retirement allowance, shall receive an annual retirement allowance adjustment as of July 1, 1999, as follows:

(i) for a retiree who has been retired not more than 5 years, $1,200;

(ii) for a retiree who has been retired more than 5 years but not more than 10 years, $1,500;

(iii) for a retiree who has been retired more than 10 years but not more than 15 years, $1,800; and

(iv) for a retiree who has been retired more than 15 years, $2,100.

(2) Except as provided in paragraph (3) of this subsection, each fiscal year, the Board of Trustees shall adjust the adjustment received by the retiree or the beneficiary as of July 1, 1999, by multiplying the adjustment by a fraction that has:

(i) as its numerator, the Consumer Price Index for the calendar year ending December 31 of the preceding fiscal year; and

(ii) as its denominator, the Consumer Price Index for the calendar year ending December 31, 1998.

(3) (i) In this paragraph, “zero-adjustment fiscal year” means any fiscal year when the allowance adjustment as provided in paragraph (2) of this subsection is less than the allowance adjustment paid for the preceding fiscal year.

(ii) For any fiscal year, the allowance adjustment may not be less than the allowance adjustment paid for the preceding fiscal year.

(iii) 1. This subparagraph applies only to a fiscal year that is not a zero-adjustment fiscal year.

2. Subject to subsubparagraph 3 of this subparagraph:

A. for a fiscal year that follows immediately after a zero-adjustment fiscal year, the allowance adjustment as provided in paragraph (2) of this subsection shall be reduced by the difference between the allowance adjustment paid in the preceding fiscal year and the allowance adjustment that would have been payable for the preceding fiscal year if the allowance for that fiscal year had been adjusted as provided under paragraph (2) of this subsection; and

B. for a fiscal year that follows immediately after 2 or more consecutive zero-adjustment fiscal years, the allowance adjustment as provided in paragraph (2) of this subsection shall be reduced by the difference between the total of the allowance adjustments paid in each consecutive zero-adjustment fiscal year preceding the fiscal year and the total allowances that would have been payable for each of the zero-adjustment fiscal years if the allowance adjustment for each of those fiscal years had been adjusted under paragraph (2) of this subsection.

3. If the amount of the reduction required for any fiscal year under subsubparagraph 2 of this subparagraph exceeds the difference between the allowance adjustment as provided in paragraph (2) of this subsection for the fiscal year and the allowance adjustment paid in the preceding fiscal year, the excess shall be deducted in future fiscal years, subject to subparagraph (ii) of this paragraph, until the difference is fully recovered.

§ 24-401 - 1. Deferred Retirement Option Program

(a) Definitions. --

(1) In this section the following words have the meanings indicated.

(2) "DROP" means the Deferred Retirement Option Program established under this section.

(3) "DROP member" means a member of the State Police Retirement System who:

(i) is eligible to participate in the DROP as provided in subsection (c) of this section; and

(ii) elects to participate in the DROP as provided in subsection (e) of this section.

(b) Applicability. -- There is a DROP for eligible members of the State Police Retirement System.

(c) Exceptions. --

(1) (i) This paragraph applies to an individual who is a member of the State Police Retirement System on or before June 30, 2011.

(ii) Except for the Secretary of State Police, a member of the State Police Retirement System is eligible to participate in the DROP if the member:

1. has at least 22 and less than 28 years of eligibility service; and

2. is less than 60 years old.

(iii) The Secretary of State Police is eligible to participate in the DROP if the Secretary has at least 22 years of eligibility service.

(2) (i) This paragraph applies to an individual who becomes a member of the State Police Retirement System on or after July 1, 2011.

(ii) Except for the Secretary of State Police, a member of the State Police Retirement System is eligible to participate in the DROP if the member:

1. has at least 25 years and less than 29 years of eligibility service; and

2. is less than 60 years old.

(iii) The Secretary of State Police is eligible to participate in the DROP if the Secretary has at least 25 years of eligibility service.

(d) Elections. -- An eligible member may elect to participate in the DROP for a period not to exceed the lesser of:

(1) 4 years;

(2) (i) the difference between 28 years and the member's eligibility service as of the date of the member's election to participate in the DROP and retire from the State Police Retirement System, if the member is a member of the State Police Retirement System on or before June 30, 2011; or

(ii) the difference between 29 years and the member's eligibility service as of the date of the member's election to participate in the DROP and retire from the State Police Retirement System, if the member becomes a member of the State Police Retirement System on or after July 1, 2011;

(3) the difference between age 60 and the member's age as of the date of the member's election to participate in the DROP and retire from the State Police Retirement System; or

(4) a term selected by the member.

(e) Applications. --

(1) An eligible member who elects to participate in the DROP shall:

(i) complete and submit a written election form to the Board of Trustees, on the form that the Board of Trustees provides, stating:

1. the member's intention to participate in the DROP;

2. the date when the member desires to retire;

3. the period that the member desires to participate in the DROP, as provided in subsection (d) of this section;

4. the date when the member intends to terminate employment with the Maryland State Police in the form of a binding letter of resignation accepted by the Secretary of State Police or the Secretary's designee; and

5. any other information required by the Board of Trustees to implement the DROP; and

(ii) complete and submit a written retirement application form to the Board of Trustees, on the form that the Board of Trustees provides.

(2) An eligible member's election to participate in the DROP is irrevocable.

(f) Commencement of participation. --

(1) A DROP member's participation in the DROP shall commence on the first day of the month following acceptance by the Board of Trustees of the DROP member's completed election form, retirement application form, and any other information required by the Board of Trustees.

(2) A DROP member is a retiree of the State Police Retirement System.

(g) Termination of participation. -- Participation in the DROP ends if the DROP participant:

(1) separates from employment in accordance with the binding letter of resignation submitted with the member's election form;

(2) except for the Secretary of State Police, attains age 60;

(3) dies;

(4) is terminated from employment by the Maryland State Police at any time before the date specified on the member's election form;

(5) shortens the time period for participation in the DROP by delivering to the Maryland State Police and the Board of Trustees written notice of the intent of the DROP member to terminate employment; or

(6) accepts a special disability retirement allowance as provided in subsection (k) of this section.

(h) Normal service retirement allowance. --

(1) As of the effective date of participation in the DROP, the Board of Trustees shall determine the DROP member's normal service retirement allowance under § 24-401 of this subtitle.

(2) During the period that a DROP member participates in the DROP, the Board of Trustees shall:

(i) deposit the DROP member's normal service retirement allowance in the DROP for the DROP member's benefit;

(ii) adjust the DROP member's normal service retirement allowance each fiscal year as provided in Title 29, Subtitle 4, Part III of this article; and

(iii) accrue interest on the amounts calculated under items (i) and (ii) of this paragraph for the DROP member into the DROP at the rate of:

1. 6% a year, compounded monthly if the individual is a DROP member on or before June 30, 2011; or

2. 4% a year, compounded annually, if the individual becomes a DROP member on or after July 1, 2011.

(3) A DROP member may not receive creditable service or eligibility service during the period that the DROP member participates in the DROP.

(4) A DROP member's compensation during the period that the DROP member participates in the DROP may not be:

(i) subject to the employer pickup provisions of § 21-303 of this article or any reduction or deduction as a member contribution for pension or retirement purposes; or

(ii) used to increase the DROP member's average final compensation except as provided in subsection (k) of this section.

(5) During the period that a DROP member participates in the DROP, the DROP member shall:

(i) continue to receive compensation, health insurance and other benefit options established under the State Employee and Retiree Health and Welfare Benefit Program administered by the Secretary of Budget and Management, and any other benefits as an employee of the Maryland State Police;

(ii) be subject to the personnel law, regulations, and policies applicable to an employee of the Maryland State Police; and

(iii) receive retirement benefits only to the extent provided in this section.

(6) The Board of Trustees is not required to establish an individual DROP account for each DROP member.

(7) Each year, the Board of Trustees shall provide a DROP member with a written accounting of the DROP member's account balance in the DROP.

(i) Lump sum payment upon termination. --

(1) Subject to paragraphs (2), (3), and (4) of this subsection, on termination of a DROP member's participation in the DROP, the Board of Trustees shall pay to the DROP member or, if the DROP member has died, the designated beneficiary of the DROP member, the amount accrued in the DROP for the DROP member under subsection (h)(2) of this section, reduced by any withholding taxes remitted to the Internal Revenue Service or other taxing authority, in a lump sum.

(2) The designated beneficiary of a DROP member is:

(i) the DROP member's surviving spouse;

(ii) if there is not a surviving spouse or if the surviving spouse dies before the youngest child is 18 years old, each child of the deceased DROP member who is under 18 years old; or

(iii) if there is not a surviving spouse or a child who is under 18 years old, the person named as a beneficiary in an acknowledged written designation filed with the Board of Trustees by the DROP member.

(3) A DROP member or designated beneficiary of a DROP member may direct the Board of Trustees to pay all or a portion of the amount accrued for the DROP member's benefit under subsection (h)(2) of this section directly to the custodian of an eligible retirement plan as provided in Title 21, Subtitle 6 of this article.

(4) A DROP member or designated beneficiary of a DROP member is eligible to receive the amount due under this subsection within 90 days after the:

(i) date of termination of the DROP member's participation in the DROP;

(ii) receipt by the Board of Trustees of a completed application to receive the DROP amount, on the form that the Board of Trustees provides; and

(iii) receipt by the Board of Trustees of any other information that the Board of Trustees requires to process payment of the DROP member's account balance to the DROP participant, the designated beneficiary of the DROP participant, or the custodian of an eligible retirement plan.

(j) Normal service retirement allowance upon termination. --

(1) Except as provided in paragraph (2) of this subsection, as of the first day of the month following termination of a DROP member's participation in the DROP, the Board of Trustees shall commence and continue payment of the normal service retirement allowance, including the cost of living adjustments as provided in Title 29, Subtitle 4, Part III of this article, to the member as provided in §§ 24-401 and 24-403 of this subtitle.

(2) If a DROP member dies before termination of the DROP member's participation in the DROP, the Board of Trustees shall pay 50% of the normal service retirement allowance, including the cost of living adjustments as provided in Title 29, Subtitle 4, Part III of this article, to the beneficiary as provided in § 24-403 of this subtitle.

(k) Special disability retirement allowance. --

(1) A DROP member is eligible to apply for a special disability retirement allowance under § 29-111 of this article if after the DROP member commences participation in the DROP:

(i) the member is totally and permanently incapacitated for duty arising out of or in the course of the actual performance of duty that occurs while participating in DROP, and without willful negligence of the member; and

(ii) the medical board certifies that:

1. the member is totally incapacitated, either mentally or physically, for the further performance of duty by the occurrence described under item (i) of this paragraph;

2. the incapacity is likely to be permanent; and

3. the member should be retired.

(2) If the Board of Trustees grants a DROP member a special disability retirement allowance, the DROP member may elect to receive the special disability retirement allowance or continue to participate in the DROP.

(3) (i) If a DROP member elects to receive a special disability retirement allowance instead of continuing to participate in the DROP, the DROP member shall:

1. submit an application to the Board of Trustees, on the form the Board of Trustees provides, to receive payment of the amount accrued in the DROP in accordance with subsection (i) of this section;

2. execute a written waiver of any benefits to which the DROP member may be entitled under the DROP; and

3. submit an application to retire with a special disability retirement allowance, on the form the Board of Trustees provides, stating the effective date of the DROP member's retirement as a special disability retiree.

(ii) On acceptance of the application for payment and application to retire, the Board of Trustees shall commence payment of a special disability allowance to the DROP member as provided in § 29-111(c) of this article, except that the DROP member's average final compensation shall be computed as of the effective date of the DROP member's application for a special disability retirement allowance.