2013 Maryland Code
STATE PERSONNEL AND PENSIONS
§ 37-203 - Transfers in general

§37-203.

(a) This section does not apply to a transfer of service credit to or from the State Alternate Contributory Employees’ Pension System, the State Alternate Contributory Teachers’ Pension System, the State Contributory Employees’ Pension System, the State Contributory Law Enforcement Officers’ Pension System, the State Contributory Teachers’ Pension System, the State Reformed Contributory Employees’ Pension System, or the State Reformed Contributory Teachers’ Pension System.

(b) (1) An individual may not transfer service credit under this title unless the individual makes a claim for the service credit within 1 year after becoming a member of the new system.

(2) An individual may not transfer service credit from one contributory system to another contributory system unless within 1 year after becoming a member of the new system the individual deposits in the annuity savings fund or other corresponding fund of the new system the total accumulated contributions to the individual’s credit in the annuity savings fund or other corresponding fund of the previous system.

(c) Except as provided in § 37-204 of this subtitle, an individual who transfers service credit under this title shall receive service credit in the new system in the amount of service credit accumulated under the previous system.

(d) On verification of the service credit, the previous system may not provide any benefit for service credit transferred from the previous system to a new system under this title.

(e) (1) Except as provided in paragraph (2) of this subsection, if an individual transfers service credit under this title, the previous system shall refund the individual’s accumulated contributions on request.

(2) Accumulated contributions applicable to the receipt of service credit or benefits in the new system may not be refunded if:

(i) an individual transfers from one noncontributory system to another noncontributory system; or

(ii) a former member transfers under § 37-202(b) of this subtitle.

(f) (1) Except as otherwise provided in this subsection, after an individual transfers service credit to a new system under this title, the individual:

(i) shall pay the rate of contribution applicable to a member of the new system; and

(ii) is eligible for a pension and annuity as provided under the new system, determined by taking into account the transferred service credit.

(2) Except as provided in § 37-204 of this subtitle, if an individual transfers from a noncontributory system to a contributory system, on retirement the individual’s retirement allowance shall be reduced by the actuarial equivalent of the member contributions that would have been deducted if the individual had earned the transferred service credit under the new system, including regular interest on those contributions.

(3) If an individual retires within 5 years after transferring into a new system, the benefits payable with respect to the transferred service credit may not be greater than the benefits that would have been payable by the previous system with respect to that service if the individual had remained in the previous system.

§ 37-203 - 1. Transfer of service credit

(a) In general. --

(1) An individual may transfer service credit from a contributory system to the State Alternate Contributory Employees' Pension System, the State Alternate Contributory Teachers' Pension System, the State Contributory Employees' Pension System, the State Contributory Law Enforcement Officers' Pension System, the State Contributory Teachers' Pension System, the State Reformed Contributory Employees' Pension System, or the State Reformed Contributory Teachers' Pension System if, within 1 year after becoming a member of the pension system, the individual:

(i) completes a claim for the service credit and files it with the Board of Trustees of the State Retirement and Pension System on a form that the Board of Trustees provides; and

(ii) deposits in the annuity savings fund of:

1. the Employees' Pension System or Teachers' Pension System member contributions at the rate applicable for the period of service if the member had earned the transferred service credit in the new system, including regular interest on the contributions at the rate of 5% per year compounded annually; or

2. the Law Enforcement Officers' Pension System member contributions at the rate of 4% of the individual's earnable compensation while a member of the contributory system after June 30, 2000, including regular interest on the contributions at the rate of 5% per year compounded annually.

(2) Subject to § 414(h) of the Internal Revenue Code, the contributory system shall refund the individual's accumulated contributions in excess of the amount determined under paragraph (1) of this subsection on request.

(b) Transfer -- Noncontributory system to contributory system. --

(1) Subject to paragraph (2) of this subsection, an individual may transfer service credit from a noncontributory system to the State Alternate Contributory Employees' Pension System, the State Alternate Contributory Teachers' Pension System, the State Contributory Employees' Pension System, the State Contributory Law Enforcement Officers' Pension System, the State Contributory Teachers' Pension System, the State Reformed Contributory Employees' Pension System, or the State Reformed Contributory Teachers' Pension System if, within 1 year after becoming a member of the pension system, the individual completes a claim for the service credit and files it with the Board of Trustees for the State Retirement and Pension System on a form that the Board of Trustees provides.

(2) The noncontributory system may not refund the individual's accumulated contributions.

(3) (i) 1. This subparagraph applies only to an individual who transferred service credit from a noncontributory system to the State Alternate Contributory Employees' Pension System, the State Alternate Contributory Teachers' Pension System, the State Contributory Employees' Pension System, the State Contributory Teachers' Pension System, the State Reformed Contributory Employees' Pension System, or the State Reformed Contributory Teachers' Pension System and earned any portion of the transferred service credit in a noncontributory system after June 30, 1998.

2. On retirement, the individual's retirement allowance shall be reduced by the actuarial equivalent of the member contributions that would have been deducted during the period after June 30, 1998, when the individual was a member of the noncontributory system, if the individual had earned the transferred service credit under the new system, including regular interest on those contributions at the rate of 5% per year compounded annually.

(ii) 1. This subparagraph applies only to an individual who transferred service credit from a noncontributory system to the State Contributory Law Enforcement Officers' Pension System and earned any portion of the transferred service credit in a noncontributory system after June 30, 2000.

2. Upon retirement the individual's retirement allowance shall be reduced by the actuarial equivalent of the member contributions that would have been deducted during the period after June 30, 2000, when the individual was a member of the noncontributory system, if the individual had earned the transferred service credit under the State Contributory Law Enforcement Officers' Pension System, including regular interest on those contributions at the rate of 5% per year compounded annually.

(c) Transfer -- Contributory system to noncontributory system. --

(1) An individual may transfer service credit from the State Alternate Contributory Employees' Pension System, the State Alternate Contributory Teachers' Pension System, the State Contributory Employees' Pension System, the State Contributory Law Enforcement Officers' Pension System, the State Contributory Teachers' Pension System, the State Reformed Contributory Employees' Pension System, or the State Reformed Contributory Teachers' Pension System to a noncontributory system if, within 1 year after becoming a member of the noncontributory system, the individual completes a claim for the service credit and files it with the administrator of the noncontributory system on a form that the administrator provides.

(2) Subject to § 414(h) of the Internal Revenue Code, the previous system shall refund the individual's total accumulated contributions to the individual on request.

(d) Transfer -- Contributory system to contributory system. --

(1) An individual may transfer service credit from the State Alternate Contributory Employees' Pension System, the State Alternate Contributory Teachers' Pension System, the State Contributory Employees' Pension System, the State Contributory Law Enforcement Officers' Pension System, the State Contributory Teachers' Pension System, the State Reformed Contributory Employees' Pension System, or the State Reformed Contributory Teachers' Pension System to a contributory system if, within 1 year after becoming a member of the contributory system, the individual:

(i) completes a claim for the service credit and files it with the administrator of the contributory system on a form that the administrator provides; and

(ii) deposits in the annuity savings fund or other corresponding fund of the contributory system the sum of:

1. the total accumulated contributions to the individual's credit in the annuity savings fund of the previous system;

2. the difference, if any, between the member contributions at the rate provided for in the contributory system, including interest on those contributions, and the total accumulated contributions to the individual's credit in the annuity savings fund of the previous system; and

3. the accumulated contributions that would have been deducted during the period the individual was a member of the State system while it was a noncontributory system if the individual had earned the transferred service credit under the contributory system, including interest on those contributions.

(2) On retirement from the contributory system, the individual's retirement allowance shall be reduced by the actuarial equivalent of the amounts determined under paragraph (1)(ii)2 and 3 of this subsection if the member elects not to deposit those amounts in the annuity savings fund or other corresponding fund of the contributory system.

(e) Service credit in new system. -- Except as provided in § 37-204 of this subtitle, an individual who transfers service credit under this title shall receive service credit in the new system in the amount of service credit accumulated under the previous system.

(f) Benefit for service credit transferred. -- On verification of the service credit, the previous system may not provide any benefit for service credit transferred from the previous system to a new system under this title.

(g) Effect of transfer. --

(1) Except as otherwise provided in this subsection, after an individual transfers service credit to a new system under this title, the individual:

(i) shall pay the rate of contribution applicable to a member of the new system; and

(ii) is eligible for a pension and annuity as provided under the new system, determined by taking into account the transferred service credit.

(2) If an individual retires within 5 years after transferring into a new system, the benefits payable with respect to the transferred service credit may not be greater than the benefits that would have been payable by the previous system with respect to that service if the individual had remained in the previous system.

§ 37-203 - 2. Transfer of service credit -- Waiver of one-year requirement.

(a) Scope. -- This subsection applies to an individual who:

(1) has accrued service credit in a State or local retirement or pension system;

(2) has accepted new employment in a position requiring membership in one of the several systems; and

(3) did not make a claim under § 37-203 or § 37-203.1 of this subtitle to transfer the previous service credit within 1 year of transferring into one of the several systems.

(b) In general. --

(1) An individual described under subsection (a) of this section may request the Executive Director to accept the individual's claim to transfer service credit accrued in the previous system.

(2) If the Executive Director denies a request for a waiver, the denial shall be presented to the Board of Trustees for review.

(3) The Board of Trustees may overturn the Executive Director's decision under paragraph (1) of this subsection.

(c) Reports. -- On or before October 1 of each year, the Board of Trustees shall submit a report to the Joint Committee on Pensions in accordance with § 2-1246 of the State Government Article, that provides:

(1) the number of requests made by individuals to the Executive Director requesting a waiver of the 1-year requirement to claim transferred service credit;

(2) the number of requests granted and denied by the Executive Director; and

(3) the number of requests granted by the Board of Trustees following a denial by the Executive Director.

(d) Regulations. -- The Board of Trustees shall adopt regulations to carry out this section.