(a) Member contributions. Each member of the retirement system must contribute a portion of the member’s regular earnings through regular payroll deductions.
(1) Member Contributions to the Optional Retirement Plan. A member of the Optional Retirement Plan must contribute the following percentage of regular earnings:
(A) Group A or H member, 7 percent for service beginning on the first pay period after June 30, 2011 and 8 percent for service beginning on the first pay period after June 30, 2012;
(B) Group B member, 7 percent;
(C) Group D member, 7 ½ percent; and
(D) Group E, F, G, or J member, 9 ½ percent for service beginning on the first pay period after June 30, 2011 and 10 ½ percent for service beginning on the first pay period after June 30, 2012.
(2) Member Contributions to the Integrated Retirement Plan. A member of the Integrated Retirement Plan must contribute the following percentage of regular earnings:
(A) Group A, 5 percent for service beginning on the first pay period after June 30, 2011 and 6 percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base, and 7 percent for service beginning on the first pay period after June 30, 2011 and 8 percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base;
(B) Group B, 4 ½ percent up to the maximum Social Security wage base, and 7 percent of regular earnings that exceed the wage base;
(C) Group E and Group J, 5 ¾ percent for service beginning on the first pay period after June 30, 2011 and 6 ¾ percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base, and 9 ½ percent for service beginning on the first pay period after June 30, 2011 and 10 ½ percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base;
(D) Group F, 5 ¾ percent for service beginning on the first pay period after June 30, 2011 and 6 ¾ percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base and 9 ½ percent for service beginning on the first pay period after June 30, 2011 and 10 ½ percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base;
(E) Group G:
(i) 6 ½ percent for service beginning on the first pay period after June 30, 2011 and 7 ½ percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base, and 10 ¼ percent for service beginning on the first pay period after June 30, 2011 and 11 ¼ percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base;
(ii) starting in the 25th year from the member’s leave accrual date under the County payroll system, 5 ¾ percent for service beginning on the first pay period after June 30, 2011 and 6 ¾ percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base, and 9 ½ percent for service beginning on the first pay period after June 30, 2011 and 10 ½ percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base on and after the member’s 25th year of credited service;
(F) Group H, 5 percent for service beginning on the first pay period after June 30, 2011 and 6 percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base and 7 percent for service beginning on the first pay period after June 30, 2011 and 8 percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base.
(3) Member Contributions to the Elected Officials' Plan. A member of the Elected Officials’ Plan must contribute 4 percent. To the extent allowed under Section 414(h)(2) of the Internal Revenue Code, the County must “pick up” (as described in the Internal Revenue Code) mandatory member contributions to the Elected Officials’ Plan.
(4) Member contributions to the guaranteed retirement income plan.
(A) A non-public safety employee member in the guaranteed retirement income plan must contribute 4% of regular earnings less than or equal to the Social Security wage base and 8% of regular earnings that exceed the Social Security wage base.
(B) A public safety employee member in the guaranteed retirement income plan must contribute 3% of regular earnings less than or equal to the Social Security wage base and 6% of regular earnings that exceed the Social Security wage base.
(C) For service beginning on the first pay period after June 30, 2011 and before the first pay period beginning after July 1, 2012, a member may contribute an additional 2% of regular earnings on an after-tax basis by making an irrevocable election in writing on or before September 1, 2011.
(D) To the extent allowed under Section 414(h)(2) of the Internal Revenue Code, the County must “pick up” (as described in the Internal Revenue Code) member contributions to the guaranteed retirement income plan. A member is always vested in the member’s contributions.
(E) When a member rejoins County service after military service that qualifies under Section 33-41(q) as credited service, the County must credit the member with the amount that the member would have contributed if the member had worked for the County during military service. Contribution credits for military service must be based on the regular earnings the member would have earned during military service. If the regular earnings are not reasonably ascertainable, the credit must be based on the member’s regular earnings during a period immediately preceding the military service. The averaging period is 12 months, or the full length of the member’s County service, whichever is shorter. The member must not receive any retroactive credited interest on the contribution credits. The County must not credit a member with a discretionary after-tax contribution under subparagraph C unless the member elects to make up the contribution under Internal Revenue Code Section 414(u), as amended.
(5) To the extent allowed under Section 414(h)(2) of the Internal Revenue Code, the County must “pick up” (as described in the Internal Revenue Code) mandatory member contributions to the Optional and Integrated, Retirement Plans for pay periods beginning after June 30, 1989.
(6) The Chief Administrative Officer may allow an agency that is not an “employing unit” (as described in Section 414(h)(2) of the Internal Revenue Code) to participate in the retirement system. The County must not “pick up” (as described in the Internal Revenue Code) mandatory contributions of members employed by a participating agency that is not an “employing unit.”
(b) Credited interest.
(1) For the period beginning July 1, 1978, and ending June 30, 1989, interest must be credited annually on each member's accumulated contributions at a rate of 4 percent per annum for the first 5 years of membership only. Members who had more than 5 years of membership on July 1, 1978, must retain all credited interest as of that date.
(2) Members who have terminated employment and vested prior to July 1, 1978, must receive interest at the rate of 4 percent per annum for as long as they remain a vested member.
(3) Effective July 1, 1989, interest must be credited annually on each member's accumulated contributions as of June 30, 1989, and thereafter, as follows:
(A) For group A members, interest will be credited at a rate of 4 percent per annum.
(B) For group B members, interest will be credited at a rate of 4 percent per annum.
(C) For group D members, interest will be credited at a rate of 4 percent per annum.
(D) For group E and J members, interest will be credited at a rate of 4 percent per annum.
(E) For group F members, interest will be credited at a rate of 4 percent per annum.
(F) For group G members, interest will be credited at a rate of 4 percent per annum.
(G) For group H members, interest will be credited at a rate of 4 percent per annum.
(4) If a member is an elected official on July 1, 1989, interest on that member's accumulated contributions must be credited under subsection (b)(1) until December 2, 1990. On and after December 3, 1990, interest must be credited on the elected official's accumulated contributions as of December 3, 1990 under subsection (b)(3) of this subsection.
(5) A member of the guaranteed retirement income plan must receive credited interest at an annual rate of 7.25% on the member’s contributions in the member’s guaranteed retirement income plan account. If the annual 7.25% interest rate does not comply with applicable law, the third segment rate described in Internal Revenue Code Section 430(h)(2)(G) or any successor provision must apply. Interest must be credited to a member’s guaranteed retirement income plan account balance on a monthly basis as of the last day of the month.
(c) Return of member contributions.
(1) Refund after employee’s separation under the optional and integrated plans.
(A) If a member who is separated from County service properly completes and submits an application for a refund of the member’s contributions, the County must refund the contributions with credited interest, unless the member dies or retires.
(B) Upon receipt of a properly completed application, the County must pay a member who is separated from County service and has not elected to vest the full amount of accumulated contributions with credited interest, less any indebtedness to the County government or the Montgomery County Employees Federal Credit Union.
(C) If a member who is separated from County service does not properly complete and submit an application for a refund, the County must refund the contributions with credited interest under the minimum distribution requirements of the Internal Revenue Code and corresponding regulations.
(D) Notwithstanding any other provision, if the member’s contributions and interest are $1,000 or less, the amount must be distributed in a lump sum as soon as administratively feasible after termination of employment even if the member does not submit an application. If the distribution cannot be made because the member cannot be located, the member will forfeit the amount. If the member later contacts the County, the member will receive the forfeited amount.
(2) Refund after separation of an elected officials’ participant. An elected officials' participant who ends employment with the County before that participant’s normal retirement date, and who does not receive a mandatory refund of the participant's account balances under Section 33-40(d)(2)(D), may, at the participant's request, receive the account balances, including picked-up contributions, in the required and the voluntary elected officials' participant contributions accounts established for that participant, less any indebtedness to the County or the Montgomery County Employees Federal Credit Union, in a single lump-sum payment.
(3) Refund after a member’s death. If a member dies, the Chief Administrative Officer must pay to the designated beneficiary accumulated member contributions plus credited interest, less any indebtedness to the County government, unless the beneficiary is eligible for an annuity under Section 33-46. If an elected officials' participant dies before the county has implemented the method of distribution under section 33-44, the chief administrative officer must pay to the beneficiary, in accordance with Section 33-46(g), the account balances, including picked-up contributions, in the required and the voluntary elected officials' participant contributions accounts, less any indebtedness to the County or the Montgomery County Employees Federal Credit Union.
(4) Refund after an employee elects to participate in the integrated plan instead of the optional plan. When a member elects to participate in the integrated retirement plan instead of the optional retirement plan, the member must receive a refund of member contributions that exceeded the amount that would have been paid if the contribution rate of the integrated retirement plan had been in effect from date of enrollment to date of election, plus credited interest earned on those contributions. Despite this requirement, a member who elects to participate in the integrated retirement plan instead of the optional retirement plan while still employed by the County government must not receive a refund of picked-up contributions made on or after July 1, 1989 or credited interest earned on those contributions. Picked-up contributions made on or after July 1, 1989 and credited interest may be refunded only if one of the events described in Section 33-45(b) occurs.
(5) Refund after a statutory change that reduces the maximum years of credited service for a retirement group.
(A) (i) If a member purchases prior service and this Chapter is later amended to reduce the maximum years of service for which a member may receive credit, the County must refund to the member that portion of the retirement contributions made to purchase the unneeded prior service, with interest, if the member requests a refund before the member retires.
(ii) Notwithstanding clause (i), the County must refund to a Group G member whose retirement is effective during the period March 1, 2000, through November 1, 2001, that portion of the member’s retirement contributions made to purchase the unneeded prior service, with interest, if the member requests a refund before or after the member retires.
(B) The County must refund the retirement contributions used to purchase excess service credits only if the member’s total credited service, excluding sick leave, exceeds the new maximum for the member’s retirement group on the date that the amendment reducing the maximum years of credited service became effective.
(C) The County must refund to the member, with interest, that portion of the payment made to purchase any prior service that exceeds the maximum credited service for the employee’s retirement group. The County must determine the amount of the refund based on the member’s total credited service, excluding sick leave, on the effective date of the amendment to the County Code that reduced the maximum years of service. In this subsection “payment” means the lump sum amount, determined at the time of purchase on an actuarial or flat payment basis, less any interest paid by the member or any contributions that were previously refunded.
(D) Under this subsection, the County must pay interest in the same manner and amount as for a member’s accumulated contributions under subsection (b). To calculate interest on a refunded payment, the County must assume that the member paid the amount in full when the service was purchased.
(E) The County must pay the proper refund to the member after the member’s retirement begins.
(6) Refund of member contributions in the guaranteed retirement income plan. A member who ends employment with the County who is not vested must receive a distribution of the member’s guaranteed retirement income plan account balance attributable to member contributions under Section 33-39 and interest on those contributions as soon as reasonably feasible after the member submits a properly completed distribution form. Any death benefits must be paid under Section 33-46. Any indebtedness to the County government must be subtracted from the member’s refund.
(d) Voluntary elected officials' participant contributions.
(1) An elected officials' participant may voluntarily contribute up to an additional 7% of regular earnings to the elected officials' plan. Voluntary elected officials' participant contributions must be deducted from the regular earnings of the elected officials' participant.
(2) An elected officials' participant may:
(A) Change the amount of the voluntary elected officials' participant contributions;
(B) Cease making voluntary elected officials' participant contributions; or
(C) Withdraw all or part of the voluntary elected officials' participant contributions and the earnings thereon under procedures established in executive regulation under method (1).
(e) Treatment of elected officials' participant contributions.
(1) Required elected officials' participant contributions must be allocated to the required elected officials' participant contributions account established for that elected officials' participant. Voluntary elected officials' participant contributions must be allocated to the voluntary elected officials' participant contributions account established for that elected officials' participant. In addition, amounts allocated to the required elected officials' participant contributions account and voluntary elected officials' participant contributions account of an elected officials' participant must be further allocated to sub-accounts to reflect the proportionate amount of such accounts invested in each of the applicable investment funds by that elected officials' participant. As of each valuation date, the chief administrative officer must value the assets of the required elected officials' participant contributions account and the voluntary elected officials' participant contributions account on a current market value basis.
(2) An elected officials' participant is always fully vested in the amount of the required elected officials' participant contributions account and the voluntary elected officials' participant contributions account for that elected officials' participant. (Ord. No. 5-152; Ord. No. 6-195, § 1; 1972 L.M.C., ch. 19, § 4; 1974 L.M.C., ch. 31, § 5; 1978 L.M.C., ch. 44, § 1; 1987 L.M.C., ch. 27, § 5; 1989 L.M.C., ch. 45, § 1; 1994 L.M.C., ch. 33, § 1; 1997 L.M.C., ch. 36, §1; 1998 L.M.C., ch. 31, § 1; 1999 L.M.C., ch. 26, § 1; 2001 L.M.C., ch. 21, § 1; 2003 L.M.C., ch. 31, § 1; 2006 L.M.C., ch. 20, § 1; 2007 L.M.C., ch. 3, § 1; 2008 L.M.C., ch. 22, § 1; 2009 L.M.C., ch. 2, § 2; 2009 L.M.C., ch. 23, § 1; 2009 L.M.C., ch. 33, § 2; 2011 L.M.C., ch. 9, § 1; 2012 L.M.C., ch. 10, § 1; 2016 L.M.C., ch. 42, § 1; 2017 L.M.C., ch. 12, §1.)
Editor’s note—2016 L.M.C., ch. 42, § 2, states, in part: ... Any active group E member who is not a County correctional officer or a sworn deputy sheriff must become a group J member on the date this law takes effect.
2011 L.M.C., ch. 9, § 2, states in part: Effective Date. ...This Act takes effect on July 1, 2011 except as otherwise provided. For a member of the Optional Plan, Integrated Plan, or Guaranteed Retirement Income Plan holding the office of County Executive, Councilmember, or Sheriff, the amendments to Sections 33-39(a)(1), 33-39(a)(2), 33-44(c), and 33-40(e)(1) took effect on December 1, 2014. For a member of the Optional Plan, Integrated Plan, or Guaranteed Retirement Income Plan holding the office of State’s Attorney, the amendments to Sections 33-39(a)(1), 33-39(a)(2), 33-44(c), and 33-40(e)(1) took effect on January 5, 2015.
2009 L.M.C., ch. 33, § 3, states, in part: Section 2 of this Act takes effect on December 6, 2010. An eligible individual who is an elected official on December 5, 2010, and remains in office on and after December 6, 2010, must decide to participate in the guaranteed retirement income plan on or before May 1, 2011. If an elected official decides to participate between December 6, 2010 and May 1, 2011, that elected official’s participation must begin on the first pay period after June 1, 2011.