2013 Maryland Code
STATE PERSONNEL AND PENSIONS
§ 29-412 - Computation of unlimited adjustment

§29-412.

(a) Except as provided in subsection (b) of this section and subject to § 29-413 of this subtitle, each fiscal year, the Board of Trustees shall adjust an initial allowance by multiplying the initial allowance by the fraction that has:

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

(2) as its denominator:

(i) for a retiree, the beneficiary of a retiree, or the surviving spouse of a member, the Consumer Price Index for the calendar year ending December 31 of the fiscal year in which the retiree or member was last employed; or

(ii) for a former member or the beneficiary of a former member, the Consumer Price Index for the calendar year ending December 31 of the fiscal year in which the former member reaches normal retirement age.

(b) (1) In this subsection, “zero-adjustment fiscal year” means any fiscal year when the allowance adjusted as provided in subsection (a) of this section results in an allowance that is less than the allowance payable for the preceding fiscal year.

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

(3) (i) This paragraph applies only to a fiscal year that is not a zero-adjustment fiscal year.

(ii) Subject to subparagraph (iii) of this paragraph:

1. for a fiscal year that follows immediately after a zero-adjustment fiscal year, the allowance payable as provided in subsection (a) of this section shall be reduced by the difference between the allowance paid in the preceding fiscal year and the allowance that would have been payable for the preceding fiscal year if the allowance for that fiscal year had been calculated without regard to paragraph (2) of this subsection; and

2. for a fiscal year that follows immediately after 2 or more consecutive zero-adjustment fiscal years, the allowance payable as provided in subsection (a) of this section shall be reduced by the difference between the total of the allowances paid in each consecutive zero-adjustment fiscal year preceding the fiscal year and the total allowances that would have been payable for each of those fiscal years if the allowance for each of those fiscal years had been calculated without regard to paragraph (2) of this subsection.

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