Division 4. Administration.

(1) A member may elect an optional form of pension actuarially equivalent to the normal form of retirement pension otherwise payable, unless the member qualifies for a non-service-connected disability retirement before reaching the early retirement date. The Chief Administrative Officer must not consider the health condition of the member when deciding what is “actuarially equivalent”.

(2) A member who qualifies for non-service connected disability retirement on or after reaching the early retirement date may elect a pension payment option.

(3) A member who qualifies for a service-connected disability retirement may elect a pension payment option, regardless of age and credited service.

(4) To elect a pension payment option, the member must file the appropriate form at least one month before the normal, early, or disability retirement date.

(5) The pension payment option must take effect on the member's retirement date and is void if the member or the named beneficiary dies before that date.

(6) The following forms of pension options are available:

(A) Ten-Year Certain and Continuous. The member will be paid a monthly income until death, with payments continued to the designated beneficiary until a total of one hundred twenty (120) monthly payments have been made. If the designated beneficiary dies before the end of the ten-year certain period, payments will be made to the contingent beneficiary. If the designated beneficiary and contingent beneficiary predecease the retiree, the retiree's estate shall be paid the amount of money representing the value of the annuity as of the date of death of the retiree. This option shall be the normal form of retirement pension for members enrolled before July 1, 1978, and continuously enrolled to date of retirement.

(B) Cash Refund Pension Option (available to members who were members of the employees' retirement system of the state on August 15, 1965). If a member dies before the total pension payments made or due equal the present value of the pension determined on the member's retirement date, the difference will be paid to the member's beneficiary.

(i) Under this option, the County must make pension payments in an adjusted amount to the member during the member's lifetime and, at the member's death, make pension payments to the designated beneficiary (spouse, domestic partner, or children only) who survives. The County must make the pension payments to the surviving beneficiary for the rest of the beneficiary’s lifetime [pension payments] in the amount payable to the member or other amount elected by the member, but not less than 10 percent of the amount payable to the member.

(ii) Upon the death of both the member and the beneficiary, a death benefit must be paid in the same manner as is provided under the normal form of retirement pension for which the member had been eligible.

(iii) Pop-up Option. At retirement, the member may elect the pop-up variation of a joint and survivor option with an appropriate actuarial reduction. Under this option, if the member and designated beneficiary divorce or the designated beneficiary dies before the member dies, the member’s monthly payments for the rest of the member’s life must “pop up” to the amount that they would have been if the member had elected the modified cash refund annuity at retirement.

(D) Modified Cash Refund Annuity. Lifetime pension payments will be payable to the member. If a member dies before receiving benefits in an amount equal to member contributions plus credited interest the difference will be payable to the designated beneficiary. This option shall be the normal form of retirement pension for members enrolled on or after July 1, 1978.

(b) Voluntary adjustment of pension payment by a member who retires before qualifying to receive social security benefits.

(1) A member may elect to receive an actuarial equivalent benefit of a certain level of pension payments until normal social security payments begin and an adjusted level of payments after normal social security payments begin. A member may elect these adjustments to receive a more uniform total income from both sources.

(2) A member who elects to receive adjusted levels of pension payments under subsection (1) above must also choose one of the forms of pension payment options described in subsection (a)(6).

(3) If a member dies, the County must pay the pension benefit to the member's designated beneficiary in the form elected by the member under subsection (a)(6).

(c) Cost-of-living adjustment. A retired member or beneficiary, including the surviving spouse or domestic partner of a group D member or other beneficiary who survives the member under a pension option or who is otherwise eligible to receive benefits, must receive an annual cost-of-living adjustment in pension benefits.

(1) Each retired member or beneficiary must have a cost-of-living base which must be the Consumer Price Index most recently preceding the date of the member's retirement or death.

(2) The Consumer Price Index to be used for the fiscal year in which the cost-of-living adjustment is payable must be the index calculated for the month last preceding the end of the fiscal year immediately preceding the fiscal year in which the adjustment is to be effective.

(3) The percentage cost-of-living adjustment of pension benefits must be obtained by dividing the most recent index determined under paragraph (2) by the next preceding index multiplied by 100 less 100.

(A) A member enrolled before July 1, 1978, must receive the full cost-of- living adjustment.

(B) A member enrolled on or after July 1, 1978, must receive 100 percent of the change in the consumer price index up to 3 percent, and 60 percent of any change in the consumer price index greater than 3 percent, up to a total adjustment of 7 ½ percent in any year. The 7 ½ percent annual limit does not apply to:

(i) a retired member who is disabled; or

(ii) a pensioner aged 65 or older for a fiscal year beginning after the date the pensioner reaches age 65.

(C) A Group G member enrolled on or after July 1, 1978, must receive 100 percent of the change in the consumer price index up to 3 percent, and 60 percent of any change in the consumer price index greater than 3 percent, up to a total adjustment of 5 percent in any year. The 5 percent annual limit does not apply to:

(i) a retired Group G member who is disabled; or

(ii) a Group G pensioner aged 65 or older for a fiscal year beginning after the date the pensioner reaches age 65.

(4) For the purpose of this section, “Consumer Price Index” means, beginning January 1, 1978, the Consumer Price Index for All Urban Consumers (CPU-I) for the Washington-Arlington-Alexandria Core Based Statistical Area (CBSA), as published by the United States Department of Labor, Bureau of Labor Statistics (for months before 1978, the Consumer Price Index published previously for urban wage earners and clerical workers for such months must be applicable.)

(5) Pension benefits are subject to decreases in the Consumer Price Index. In no instance, however, must a retired member or beneficiary receive less than the amount of pension benefits for which eligible at the time of the member's retirement.

(6) Notwithstanding the provisions of this Section, for members other than Group G members that qualify under subsection (3)(C), the cost-of-living adjustment must not exceed 2.5 percent for:

(A) credited service beginning on the first pay period after June 30, 2011; or

(B) a disability retirement pension based on a disability occurring after June 30, 2011.

(d) Applicability of cost-of-living adjustments to surviving spouses or domestic partners of group D members. Effective July 1, 1973, the provisions of subsection (c) apply to an eligible surviving spouse or domestic partner of a group D member. The cost-of-living adjustment for the surviving spouse or domestic partner of a group D member who retired or died before July 1, 1970, must be based on the Consumer Price Index published as of August 15, 1955. The cost-of-living adjustment for the surviving spouse or domestic partner of a group D member who was an active member on June 30, 1970, and who retired or died on or after July 1, 1970, must be based on the Consumer Price Index published as of the date of the member's retirement or death, whichever is earlier.

(e) Applicability of cost-of-living adjustments to elected officials' plan and the guaranteed retirement income plan. Cost-of-living adjustments do not apply to the elected officials' plan and the guaranteed retirement income plan.

(f) Distributions from the elected officials' plan. The chief administrative officer must pay an elected officials' participant's account balances in the elected officials' plan upon normal retirement or withdrawal of vested county contributions under the provisions of this subsection.

(1) Normal Method of Distribution. Unless the elected officials' participant elects an option under paragraph (2), the normal method of distribution must be a variable annuity that reflects investment gains and must be paid for the elected officials' participant's life.

(2) Optional Methods of Distribution. An elected officials' participant may choose to have the account balances paid to that elected officials' participant in one of the following optional methods:

(A) A single, lump-sum cash payment.

(B) A joint and survivor annuity. A joint and survivor annuity as used in this subsection means an annuity payable for the life of the elected officials' participant, with a survivor's annuity payable for the life of the spouse or domestic partner of the elected officials' participant in an amount at least equal to one-half of the amount of the annuity payable during the joint lives of the elected officials' participant and the spouse or domestic partner of the elected officials' participant, and which is the actuarial equivalent of a single annuity for the life of a participant.

(C) A single-life annuity that will be payable to the elected officials' participant during the life of that participant. If the elected officials' participant dies before receiving an amount equal to the required and voluntary elected officials' participant contributions account balances, including picked-up contributions, the difference must be paid to the beneficiary of the elected officials' participant.

(D) A life annuity with a ten-year certain option. This option provides an adjusted pension payable as long as the elected officials' participant lives, but guaranteed for a period of ten (10) years beginning on the date the payment of the account balances is to begin. If an elected officials' participant dies before expiration of the guaranteed period, payment is continued to the beneficiary at the same rate. If the beneficiary dies after having received at least one (1) payment while further payments are due, the further payments are made to a person designated by the elected officials' participant as a contingent beneficiary, or, in the absence of a contingent surviving beneficiary, the commuted value of the payments is paid to the estate of the last surviving beneficiary in a single lump-sum.

(E) An annuity that provides gradually increasing pension payments, based on the elected officials' participant's life expectancy at the time of retirement. The payments are made for the life of the elected officials' participant.

(F) Payment of the account balances of the elected official participant in the form of as nearly equal periodic payments as the market will allow, over a period not exceeding the lesser of the joint life expectancy of the elected officials’ participant and the elected officials’ participant’s beneficiary or twenty (20) years. Notwithstanding the preceding, payments must comply with the requirements of Internal Revenue Code Section 401(a)(9), as amended, and the corresponding Treasury Regulations.

(3) If benefits under the elected officials' plan are payable under any method other than the lump sum method, the chief administrative officer may utilize the account balances of the elected officials' participant to buy an annuity contract from an insurance company authorized to do business in the State of Maryland. The contract must provide for payment in the method the elected officials' participant chose.

(4) The county executive may adopt regulations under method (3) to provide a procedure for an elected officials' participant to choose an alternate method of distribution.

(g) Distributions from the Guaranteed Retirement Income Plan. A participant who receives a contribution under Section 33-42A must not receive a distribution until the participant attains the Social Security retirement age. Any other participant may receive a distribution when the participant terminates County employment. A participant may elect a distribution from the guaranteed retirement income plan of a participant’s vested guaranteed retirement income plan account balance as follows:

(1) Lump Sum Method of Distribution. Unless a participant elects an annuity under paragraph (2), a participant must receive the participant’s vested guaranteed retirement income plan account balance in a single lump sum. The participant may have the lump sum paid as a direct rollover to an eligible retirement plan as defined in the Internal Revenue Code.

(2) Annuity Method of Distribution. A participant may elect to receive the participant’s guaranteed retirement income plan account balance paid in:

(A) a single life annuity payable to the participant during the life of that participant; or

(B) a joint and survivor annuity payable to the participant over the participant’s lifetime and, at the participant’s death, payable to the designated beneficiary (spouse, domestic partner, or children only) who survives. Payments must be made for the designated beneficiary’s lifetime in the amount payable to the participant or another amount elected by the participant, but not less than 10 percent of the amount payable to the participant.

(3) No other form of payment options listed in this Section is available to guaranteed retirement income plan participants.

(h) (1) Required commencement of benefit payments from the elected officials’ plan. The distribution of an elected officials’ participant’s retirement benefits must be made no later than April 1 of the calendar year following the later of the calendar year in which the elected officials’ participant attains age 72 or the calendar year in which the elected officials’ participant retires. In the alternative, the payment of benefits to an elected officials’ participant must begin not later than such April 1 under a method of payment that, in accordance with the applicable United States Treasury Regulations, provides for distribution of the elected officials’ participant’s benefits over:

(A) The life of the elected official's participant;

(B) The lives of the elected officials' participant and the elected officials' participant's designated beneficiary;

(D) A period not extending beyond the life expectancy of the elected officials' participant and the elected officials' participant's designated beneficiary.

(2) Notwithstanding any other provision, an elected official’s account balance of $1,000 or less must be automatically distributed in a lump sum as soon as administratively feasible after termination of employment without a request from the elected official. If the distribution cannot be made because the elected official cannot be located, the elected official will forfeit the amount. If the elected official later contacts the County, the elected official will receive the forfeited amount.

(3) Notwithstanding this subsection, an elected officials’ participant or beneficiary who would have been required to receive a minimum required distribution for 2020 but for the enactment of Internal Revenue Code Section 401(a)(9)(I), must receive those distributions for 2020 unless the participant or beneficiary elects not to receive such distributions.

(i) Period for distribution of death benefits of a retired elected officials’ participant who elected to receive benefits in the form of an annuity.. Any death benefits must be paid to a joint annuitant or beneficiary under the terms of the annuity elected.

(j) Period for distribution of death benefits of an elected officials’ participant who was not receiving benefits or who was receiving benefits in the form other than an annuity. Benefits must be distributed before the end of the calendar year containing the fifth anniversary of the elected official participant’s death; however, the five-year rule does not apply:

(1) If any portion of the elected officials’ participant’s benefit is payable to, or for the benefit of, an individual designated as a beneficiary, the benefits must be distributed by the end of the calendar year containing the tenth anniversary of the elected officials’ participant’s death.

(2) If any portion of the elected officials’ participant’s benefit is payable to, or for the benefit of, an eligible designated beneficiary as defined in Internal Revenue Code Section 401(a)(9)(E)(ii), benefits are payable as follows:

(A) The distributions must commence before the end of the calendar year following the calendar year in which the elected official’s participant’s death occurred.

(B) The portion of the elected officials’ participant’s benefit to which the eligible designated beneficiary is entitled must be distributed over the life of the eligible designated beneficiary, or over a period not extending beyond the life expectancy of the eligible designated beneficiary.

(C) If the eligible designated beneficiary is a surviving spouse, the distributions may instead commence before the later of the end of the calendar year following the calendar year in which the participant died or the end of the calendar year in which the elected officials’ participant would have attained age 72.

(D) If the eligible designated beneficiary is a child who has not reached majority, the benefit must be paid within 10 years of the date when the child reaches the age of majority (or other designated event permitted under applicable Treasury Regulations).

(k) Required commencement of benefit payments for members of the optional or integrated plans. The distribution of a member’s retirement benefit must be made, or must begin, no later than April 1 of the calendar year following the later of the calendar year in which the member attains age 72 or the calendar year in which the member retires.

(l) Period for distribution of death benefits of a retired member of the optional or integrated plan who was receiving benefits in the form of an annuity. Any death benefits must be paid to a joint annuitant or beneficiary under the terms of the annuity elected.

(m) Period for distribution of death benefits of a member of the optional or integrated plan who was not receiving benefits and the death benefit is a return of member contributions with credited interest. The benefit must be distributed before the end of the calendar year containing the fifth anniversary of the member’s death.

(n) Required distribution for guaranteed retirement income plan participants.

(1) The distribution of a participant’s guaranteed retirement income plan account balance must be made no later than April 1 of the calendar year after the later of the calendar year in which the participant attains age 72 or the calendar year in which the participant terminates employment. Distributions must be made in accordance with subsection (g). If the participant does not elect a form of distribution, the distribution must be made in a lump sum. If the participant dies before beginning to receive benefits, the participant’s designated beneficiary under 33-46(h) must receive a lump sum distribution as soon as practicable after the participant’s death, but not later than the December 31st of the year containing the fifth anniversary of the participant’s death.

(2) A participant’s account balance of $1,000 or less must be automatically distributed in a lump sum as soon as administratively feasible after termination of employment without a request from the participant.

(o) Actuarial assumptions. The actuarial assumptions that will be used to determine the equivalence of various optional benefits are:

(1) Net interest rates (the difference between a gross interest rate and a cost-of-living allowance assumption): for actuarial equivalence under the optional nonintegrated and optional integrated provisions, the gross interest rate is six (6) percent per year, the cost-of-living allowance assumption is three (3) percent per year, and the net interest rate is three (3) percent per year; for actuarial equivalence under the mandatory integrated plan, the gross interest rate is six (6) percent per year, the cost-of-living allowance assumption is one and eight-tenths (1.8) percent per year and the net interest rate is four and two-tenths (4.2) percent per year.

(2) Mortality rate: UP 84 Mortality Table.

(p) Limitation on benefits. Notwithstanding any provision governing the retirement system to the contrary, the benefits provided by the retirement system for members whose anticipated annual benefit provided by such contributions will exceed fifteen hundred dollars ($1,500.00), and who are within the twenty-five (25) highest paid employees as of the time of the establishment of the retirement system (including any such highest paid employees who are not members at the time but who may later become members) must be subject to the conditions which are stated from time to time in applicable United States Treasury Regulations. The restrictions also apply to any increases in benefits following the establishment of the retirement system, as may be provided for in applicable United States Treasury Regulations.

(q) Direct rollover distributions. A member or beneficiary may elect, in any manner prescribed by the Chief Administrative Officer at any time, to have any portion of eligible rollover distribution paid directly to an eligible retirement plan specified by the member in a direct rollover. A member may not elect a direct rollover if the eligible rollover distribution is less than $200.00. As used in this subsection:

(1) direct rollover means a payment from the retirement system to the eligible retirement plan specified by the member;

(2) eligible retirement plan means:

(A) an individual retirement account described in Internal Revenue Code Section 408(a);

(B) an individual retirement annuity described in Internal Revenue Code Section 408(b) (other than an endowment contract);

(D) an annuity plan described in Internal Revenue Code Section 403(a);

(E) an eligible deferred compensation plan described in Internal Revenue Code Section 457(b) which is maintained by an eligible employer described in Internal Revenue Code Section 457(e)(1)(A); or

(F) an annuity described in Internal Revenue Code Section 403(b).

(3) eligible rollover distribution means any distribution of all or any portion of the retirement benefit; except:

(A) any distribution which is one of a series of substantially equal periodic payments (not less frequently than annually) made:

(i) for the life (or life expectancy) of the employee or the joint lives (or joint life expectancies) of the employee and the employee’s designated beneficiary; or

(ii) for a specified period of 10 years or more; or

(B) any distribution to the extent such distribution is required under Section 401(a)(9) of the Internal Revenue Code, as amended; and

(4) beneficiary includes a non-spouse beneficiary. A non-spouse beneficiary may make a direct rollover only to an inherited individual retirement account or annuity described in Sections 408(a) or 408(b) of the Internal Revenue Code that is established on behalf of the non-spouse beneficiary. Such rollover must be made in a manner consistent with Section 402(c)(11) of the Internal Revenue Code and any other applicable guidance.

(r) Limitations Under Internal Revenue Code. Distributions under a plan must be subject to the limitations of Section 401(a)(9) of the Internal Revenue Code, including the incidental death benefit rules under Section 401(a)(9)(G) of the Internal Revenue Code, in accordance with any proposed or final regulations under Section 401(a)(9) of the Internal Revenue Code.

(s) Transfer from Retirement Savings Plan. A participant who transfers his or her retirement savings plan account balance under Section 33-120 may elect to receive his or her account balance paid as an annuity under subsection (g)(2). (Ord. No. 5-152; Ord. No. 6-195, § 1; 1971 L.M.C., ch. 39, § 5; 1972 L.M.C., ch. 19, § 9; 1973 L.M.C., ch. 12, § 1; 1974 L.M.C., ch. 31, § 12; 1974 L.M.C., ch. 59, § 5; 1978 L.M.C., ch. 44, § 1; 1987 L.M.C., ch. 27, § 8; 1987 L.M.C., ch. 44, § 2; 1996 L.M.C., ch. 19, § 1; 1998 L.M.C., ch. 31, § 1; 1999 L.M.C., ch. 26, § 1; 1999 L.M.C., ch. 30; § 2; 2001 L.M.C., ch. 21, § 1; 2003 L.M.C., ch. 3 , § 1; 2003 L.M.C., ch. 13, § 1; 2003 L.M.C., ch. 31, § 1; 2008 L.M.C., ch. 22, § 1; 2009 L.M.C., ch. 2, §§ 1, 2; 2010 L.M.C., ch. 13 , § 1; 2010 L.M.C., ch. 56, § 1; 2011 L.M.C., ch. 9 , § 1; 2012 L.M.C., ch. 10 , § 1; 2014 L.M.C., ch. 17, § 1; 2015 L.M.C., ch. 28 , § 1; 2017 L.M.C., ch. 7, § 1; 2018 L.M.C., ch. 3, §1; 2021 L.M.C., ch. 16, §1; 2023 L.M.C., ch. 26 , § 1.)

Editor’s note—2021 L.M.C., ch. 16, § 2 states: Sec. 2. Effective Date. The Council declares that this legislation is necessary for the immediate protection of the public interest. This Act takes effect on the date on which it become law, except:

(a) the amendments in Section 1 to §§ 33-44 and 33-120 increasing the required distribution age from 70 ½ to 72 must take effect for individuals attaining age 70 ½ after December 31, 2019; and

(b) the amendments in Section 1 to §§ 33-44 and 33-120 requiring distributions to beneficiaries upon a participant’s death must take effect for deaths occurring after December 31, 2021.

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.

2003, ch. 3, § 1, states: Rule of Interpretation. The amendments made by Section 1 of this Act must be interpreted to comply with requirements stated in letters issued on December 11, 2002, and January 14, 2003, by the Internal Revenue Service to the County regarding the continued qualification of County employee retirement plans. 2003, ch. 3, § 2, states, in part: Retroactivity. (f) The amendment made by Section 1 of this Act to Code Section 33-44 takes effect January 1, 2001.

The above section is cited in Fultz v. Shaffer, 111 Md.App. 278, 681 A.2d 568 (1996) and in Montgomery County v. Buckman, 636 A.2d 448, 333 Md. 516 (1994).

Sec. 33-45. Vested benefits and withdrawal of contributions.

(a) Eligibility for vesting for optional and integrated plans. A member must complete 5 years of membership before the member is qualified to vest, except that a member who has transferred service credit from a public retirement system in Maryland may use that service credit to qualify for vesting. A vested member must leave all member contributions, plus credited interest, in the fund to be eligible to receive retirement benefits. Notwithstanding the preceding, a member may use credited service under any County retirement plan as credited service for vesting purposes.

(b) Withdrawal of contributions for optional and integrated plans.

(1) In accordance with paragraph (2), the County must refund a member’s contributions with credited interest to:

(A) a member whose County service ends before the member is eligible to vest; and

(B) a member eligible to vest whose County service ends and who voluntarily elects to withdraw, thus ceasing to be a member.

(2) (A) If a member’s contributions and interest are more than $1,000, to obtain a refund of contributions, a member must properly complete and submit an application for a refund.

(B) If a member’s contribution and interest are more than $1,000, and the member 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.

(C) Notwithstanding any other provision, if the member’s contributions and interest is $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.

(3) If a vested member dies before the normal retirement date, the County must pay the designated beneficiary a lump sum death benefit equal to the member's contributions plus credited interest.

(1) Before July 1, 1989, a vested member is eligible to receive a percentage of the normal retirement pension that has accrued to date of termination, with payments beginning on the first day of the month following the member's normal retirement date. Percentage of vested rights will be based on years and months of credited service under the following schedule:

Completed Years of Credited Service	Percentage of Vested Rights
5	50%
6	60%
7	70%
8	80%
9	90%
10 or more	100%

If a vested member who has reached normal retirement date dies after qualifying to receive retirement benefits, the designated beneficiary is entitled to receive whatever benefits may be provided under the pension payment option elected. However, an elected or appointed member who has completed 5 years in office, vests 100 percent if the member's service terminates before normal retirement date with a minimum monthly benefit of $150.00.

(2) On or after July 1, 1989, a member who has completed 5 years of credited service is fully vested in a normal retirement pension that has accrued to date of termination, with payments beginning on the first day of the month following the member's normal retirement date.

(3) A former member who has completed 5 years of credited service but has not completed 10 years of credited service, who did not elect to receive a return of accumulated member contributions upon termination of employment, and who returns to county service on or after July 1, 1989, must complete one additional year of credited service before becoming fully vested.

(4) A former member who has completed 10 years of credited service, who did receive a return of accumulated member contributions upon termination of employment and who returns to county service on or after July 1, 1989, must complete 5 additional years of credited service, before becoming fully vested. However, if the member purchases prior county service under section 33-41(1), the member must complete the number of years of credited service which in addition to those years purchased under section 33-41(1) equals 5 years of credited service, but in no event may the member fully vest without completing at least one additional year of credited service.

(5) If a vested member who has reached normal retirement date dies after qualifying to receive retirement benefits, the designated beneficiary is entitled to receive whatever benefits are provided under the pension payment option elected. If a vested member who has reached normal retirement date dies after qualifying to receive retirement benefits, but has not designated a beneficiary, no benefit will be paid unless required by another provision governing the retirement system.

(6) An elected or appointed member who has completed 5 years in office, and is not otherwise fully vested under paragraphs (c)(2) through (c)(5) of this section will vest 100 percent if the member's service terminates before normal retirement date with a minimum monthly benefit of $150.00. However, an elected or appointed member who has any combination of years of credited service or years in office, will vest 100 percent if the member's service terminates before normal retirement date.

(7) Vested benefits for a member who is an elected official on July 1, 1989, will be determined under paragraph (c)(1) of this section before December 3, 1990. On and after December 3, 1990, the elected official's vested benefits will be determined under paragraphs (c)(2) through (c)(6) of this section.

(8) Vesting for the guaranteed retirement income plan. A member, except a member who is an elected official, has a 100% vested interest in the member’s County contribution credits and the credited interest on the member’s County contribution credits after the member attains 3 years of credited service. A member who is an elected official has a 100% vested interest in the member’s County contribution credits and the credited interest on the member’s County contribution credits after the member attains the lesser of a full term of office or 4 years of credited services. A member who is not 100% vested in accordance with the preceding two sentences must become 100% vested in the member’s County contribution credits and the credited interest on the County contribution credits from the effective date of a termination of the guaranteed retirement income plan or upon death or disability. A member is disabled if the member is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. A member who terminates employment with the County and is not vested in any County contribution credits or the credited interest on the County contribution credits must forfeit the County contribution credits plus the credited interest on the County contributions credits.

(9) For purposes of this subsection, vesting will be in accordance with Section 401(a)(37) of the Internal Revenue Code. Effective January 1, 2007, the beneficiary of a member on a leave of absence to perform military service with reemployment rights described in Section 414(u) of the Internal Revenue Code, where the member cannot return to employment on account of his or her death, must be entitled to any additional benefits (other than benefit accruals relating to the period of qualified military service) that would be provided under the employees’ retirement system had the member died as an active employee, in accordance with Section 401(a)(37) of the Internal Revenue Code. This provision applies to the elected officials’ plan, the guaranteed retirement income plan, and the optional and integrated plans.

(d) Discontinued service retirement for optional and integrated plans.

(1) Any member whose employment has been terminated by an administrative action may elect a discontinued service pension if the member has at least 10 years of continuous service. Except for a Group G member, pension payments must begin on the member's early retirement date, or immediately if the member is eligible for early retirement. For a Group G member, pension payments must begin on the member’s normal retirement date, or immediately if the member is eligible for normal retirement.

(2) A member who has been dismissed for cause or who has resigned is not eligible for a discontinued service pension.

(3) A member enrolled on or before June 30, 1978, and continuously enrolled thereafter, may substitute 10 or more years of credited service for the 10 or more years of continuous service requirement.

(4) The discontinued service retirement pension of a member who has been continuously enrolled in the retirement system since before July 1, 1978, is the amount of pension the member would have received under Section 33-42(b) for regular retirement, as modified as follows:

(A) substitute "final earnings" wherever the term "average final earnings" appears in the applicable formula under Section 33-42(b);

(B) add 5 percent of final earnings; and

(C) treat a member who submitted an application to transfer from the optional plan to the integrated plan before September 26, 1983, as if the member had remained in the optional plan.

(5) The discontinued service retirement pension of any other member is the amount of pension the member would have received under Section 33-42(b)(2) for regular retirement.

(e) Discontinued service benefits of elected and appointed members.

(1) If an elected or appointed member with 10 or more years of credited service, is not reappointed or reelected, the member may opt to:

(A) receive a pension immediately, if the member enrolled or reenrolled before January 22, 1974; or

(B) receive a pension at age 60, if the member enrolled or reenrolled on or after January 22, 1974.

(2) The pension for a member enrolled or reenrolled on or before September 26, 1983, or who submitted an application to transfer from the optional plan to the integrated plan before September 26, 1983, is the pension the member would have received under Section 33-42(b) for regular retirement, except that:

(A) "final earnings" replaces "average final earnings" in the applicable formula in Section 33-42(b);

(B) a member who submitted an application to transfer from the optional plan to the integrated plan before September 26, 1983, must be treated as if the member had remained in the optional plan; and

(3) The pension for a member enrolled or reenrolled after September 26, 1983, or a member who submits an application to transfer from the optional plan to the integrated plan after September 26, 1983, is the amount of pension the member would have received under Section 33-42(b)(2) for regular retirement, except that:

(A) "final earnings" replaces "average final earnings" in the applicable formula in Section 33-42(b); and

(B) the monthly benefit must be at least $300.

(f) [Exception.] Section 33-45 does not apply to the elected officials' plan.

(g) Limitation on the use of forfeitures. Except as provided in section 33-40(c), any forfeitures arising through the termination of members who have not attained full vesting must not be used to increase the benefits of any other member in the retirement system. (Ord. No. 5-152; Ord. No. 6-195, § 1; 1971 L.M.C., ch. 39, § 6; 1972 L.M.C., ch. 19, § 10; 1974 L.M.C., ch. 31, § 13; 1974 L.M.C., ch. 59, § 6; 1978 L.M.C., ch. 44, § 1; 1980 L.M.C., ch. 11, § 1; 1984 L.M.C., ch. 11, § 1; 1987 L.M.C., ch. 27, § 8; 1987 L.M.C., ch. 44, § 3; 1989 L.M.C., ch. 45, § 1.; 1993 L.M.C., ch. 21, § 1; 1998 L.M.C., ch. 31, § 1; 1999 L.M.C., ch. 26, § 1; 2001 L.M.C., ch. 21, § 1; 2006 L.M.C., ch. 20, § 1; 2006 L.M.C., ch. 33, § 1; 2007 L.M.C., ch. 3, § 1; 2008 L.M.C., ch. 22, § 1; 2009 LMC ch. 33, § 2; 2012 L.M.C., ch. 10, § 1; 2017 L.M.C., ch. 7, §1; 2021 L.M.C., ch. 36, §1.)

Editor’s note—See County Attorney Opinion dated 4/10/06-A discussing the appointment and supervision of heads of departments and principal offices. See County Attorney Opinion dated 4/10/06, concerning the Chief Administrative Officer’s authority to terminate an appointed official, which quoted Section 33-45. See County Attorney Opinion dated 5/9/91 explaining that discontinued service pension for administrative services coordinator based upon proposed abolishment of the position meets the intent of the retirement system law.

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.

Sec. 33-46. Death benefits and designation of beneficiaries.

(a) Beneficiary death benefits of an active member whose death is not service connected. Upon the death of a member under circumstances not covered by subsection (b), the designated beneficiary must receive a death benefit payment equal to:

(1) member contributions, including picked-up contributions, with credited interest, or a spouse's, or domestic partner's, and children's benefit as provided in subsection (e); plus

(2) 50 percent of average final earnings if the member was a member of the employees' retirement system of the state of Maryland as of August 15, 1965, and became a member of the employees' retirement system of the County on or before December 31, 1966, or such later agency entrance date without a break in service, and who is not on leave without pay except for authorized leave without pay for illness.

(b) Spouse's, or domestic partner’s, and children's benefits of a member whose death is service connected.

(1) (A) If a member other than a Group F or G member dies while employed by the County or a participating agency and the employing department or agency, a beneficiary, or another person submits satisfactory proof to the Chief Administrative Officer that the employee’s death resulted from injuries sustained in the line of duty or was directly attributable to the inherent hazards of the duties the employee performed and the death was not due to willful negligence, the County must pay benefits as follows:

(i) a spouse's or domestic partner’s benefit equal to 25 percent of the member's final earnings, paid as a monthly benefit for the spouse’s or partner’s life, but not less than $250 per month; plus

(ii) a child's benefit equal to 5 percent of the member's final earnings, paid as a monthly benefit, but not less than $50 per month until the child reaches age 21 or for life if the child is disabled and incapable of self-support.

(B) The Chief Administrative Officer must ensure that the maximum total benefit for a spouse or domestic partner and child must not exceed 40 percent of the member's final earnings.

(C) The Chief Administrative Officer must not pay the benefit to the spouse or domestic partner and child if the spouse or domestic partner elects to receive benefits under subsection (e). However, the Chief Administrator must pay a child's benefit if the eligible spouse or domestic partner dies before the child is 21 years old.

(2) The Chief Administrative Officer must pay death benefits to the spouse or domestic partner and child of a Group F or G member as if the member had been receiving a service-connected disability pension on the date of the member’s death and had selected a joint and survivor pension option of 100 percent of the amount payable to the member, if:

(A) the Group F or G member died while employed by the County; and

(B) the employing department, a beneficiary, or another person submits satisfactory proof to the Chief Administrative Officer that the member’s death:

(i) resulted from injuries the employee received in the line of duty or was directly attributable to the inherent hazards of the duties the employee performed; and

(ii) was not due to the employee’s willful negligence.

(3) The Chief Administrative Officer must pay a benefit to the spouse or domestic partner and children of a Group G member who dies on or after July 1, 2004 under the conditions stated in subsection (2) as if the member had died while receiving a service connected disability retirement benefit of at least 70 percent of the member's final earnings.

(c) Spouse's, or domestic partner's, and children's benefits when a member who has retired on a disability dies. When a member who has retired on a disability dies, the spouse or domestic partner is entitled to receive the death benefits provided under the pension payment option elected. If the spouse or domestic partner died before the member, any child of the retiree less than 21 years old is entitled to receive these death benefits, shared equally among the member's children who are less than 21 years old.

(d) Actuarial value of spouse's, or domestic partner's, and children's benefits. If the actuarial value of a spouse's, or domestic partner's, and children's benefit is less than the death benefit payment otherwise payable under subsection (a), the County must pay the death benefit or the benefit's actuarial equivalent instead of the spouse's, or domestic partner's, and children's benefit.

(e) Spouse's, or domestic partner's, and children's benefits when an active member eligible for vesting or retirement dies.

(1) A surviving spouse, domestic partner, or child who is the designated beneficiary of a member who died after becoming eligible to vest or retire, may elect within 60 days after the member's death a benefit equal to the yearly amount of benefits that would have been payable if the member had vested or retired immediately before death and had elected a 100-percent joint and survivor pension option. The payments must begin on the member's normal retirement date if the member was eligible for vesting, or immediately if the member was eligible for retirement.

(2) If the designated beneficiary who would receive a death benefit under paragraph (1) dies before the death benefit payments begin and the member designated a contingent beneficiary, the death benefit under subsection (a) must be paid to the contingent beneficiary designated by the member (or to a person designated by the beneficiary if the member left no enforceable contingent beneficiary designation.)

(3) If the member meets the requirements for the benefit in subsection (a)(2), the beneficiary also is entitled to receive a death benefit equal to 50 percent of the member's average final earnings.

(f) Designation of beneficiaries.

(1) A member may name a primary beneficiary or beneficiaries and contingent beneficiary or beneficiaries on a designation of beneficiaries form to be filed with the Office of Human Resources. If a member names 2 or more persons as beneficiaries, the persons must be considered co-beneficiaries unless the member specifies otherwise. A member may change any named beneficiary by written request. The consent of the beneficiary or beneficiaries is not required to name or change a beneficiary. The designation is effective when the member signs the request even if the member is not living when the Office receives the request, but without prejudice for any payments made before the Office received the request.

(2) If a member dies without designating a surviving beneficiary or the designation is not enforceable, the surviving spouse or domestic partner (or if there is no surviving spouse or domestic partner, each surviving child, sharing equally with any other surviving child) is the designated beneficiary for purposes of this Section and any other death benefit provided to a "designated beneficiary" under the Employees' Retirement System. If no spouse, domestic partner, or child survives a member who left no enforceable beneficiary designation, the member's estate is the designated beneficiary.

(g) Elected officials plan. If an elected officials' participant dies before the County has implemented the method of distribution of benefits to the elected officials participant under a method of distribution designated in Section 33-44, the elected officials' participant's vested County elected officials' contributions account balance, including picked-up contributions, and the amounts distributable under Section 33-39(c)(2) from the elected officials' plan, must be distributed to the elected officials' participant's designated beneficiary. A beneficiary may choose to have benefits distributed in any method listed in Section 33-44(f)(2). If the beneficiary does not choose a method of distribution, the method of distribution must be a variable annuity that reflects investment gains and is payable for the beneficiary's life. The County Executive may provide by regulation adopted under method (3) a procedure for a beneficiary to choose a method of distribution.

(1) A participant may name a primary beneficiary or beneficiaries and contingent beneficiary or beneficiaries on a designation of beneficiary form filed with the Office of Human Resources, or designee of the Chief Administrative Officer, including a third party service provider. If a participant names 2 or more persons as beneficiaries, the persons are considered co-beneficiaries and share the benefit equally unless the participant specifies otherwise on the designation of beneficiary form. A participant may change any named beneficiary by completing a new designation of beneficiary form. The consent of the beneficiary or beneficiaries is not required to name or change a beneficiary. The designation is effective if the form is received by the Office or the designee of the Chief Administrative Officer, including a third party service provider, during a participant’s lifetime.

(2) If a participant dies without designating a surviving beneficiary or the designation is not enforceable under subsection (i), the surviving spouse or domestic partner (or if there is no surviving spouse or domestic partner, each surviving child, sharing equally with any other surviving child) is the designated beneficiary. If no spouse, domestic partner, or child survives a participant who left no enforceable beneficiary designation, the participant’s estate is the designated beneficiary.

(h) Guaranteed retirement income plan. Subsections (a)-(g) do not apply to the guaranteed retirement income plan. If a participant dies before receiving the participant’s guaranteed retirement income plan account, the guaranteed retirement income plan account balance must be distributed to the participant’s designated beneficiary in a lump sum as soon as practicable after the participant’s death, but not later than the December 31st of the year containing the fifth anniversary of the participant’s death.

(1) A participant may name a primary beneficiary or beneficiaries and contingent beneficiary or beneficiaries on a designation of beneficiaries form filed with the Office of Human Resources, or designee of the Chief Administrative Officer. If a participant names 2 or more persons as beneficiaries, the persons are considered co-beneficiaries and share the benefit equally unless the participant specifies otherwise on the designation of beneficiaries form. A participant may change any named beneficiary by completing a new designation of beneficiaries form. The consent of the beneficiary or beneficiaries is not required to name or change a beneficiary. The designation is effective when the participant signs the form even if the participant is not living when the Office, or designee of the Chief Administrative Officer, receives the request, but without prejudice for any payments made before the Office, or the designee of the Chief Administrative Officer, received the request.

(i) For purposes of this Section, a beneficiary designation is “not enforceable” if:

(1) the designated beneficiary:

(A) predeceases the member;

(B) disclaims the benefit; or

(2) the designation is legally void for any reason. (Ord. No. 5-152; Ord. No. 6-195; 1971 L.M.C., ch. 40, § 1; 1972 L.M.C., ch. 19, § 1; 1974 L.M.C., ch. 31, § 14; 1974 L.M.C., ch. 59, § 7; 1978 L.M.C., ch. 44, § 1; 1987 L.M.C., ch. 27, § 9; 1997 L.M.C., ch. 28; §1; 1998 L.M.C., ch. 31, § 1; 1999 L.M.C., ch. 30, § 2; 2001 L.M.C., ch. 21, § 1; 2001 L.M.C., ch. 28, §§ 6, 15 and 16; 2003 L.M.C., ch. 30, § 1 § 1; 2004 L.M.C., ch. 14, § 1; 2008 L.M.C., ch. 22, § 1; 2010 L.M.C., ch. 49, § 1; 2014 L.M.C., ch. 17, § 1; 2021 L.M.C., ch. 16, §1.)

Editor's note—2004 L.M.C., ch. 14, § 2, states: Transition. Sections 33-42(b)(2) and 33-46(b) of the Code, as amended by this Act, apply to eligible Group G members who file applications to retire on or after July 1, 2004.

2003 L.M.C., ch. 30, § 2, states: Section 33-46(b)(2) of the Code, as amended by this Act, applies to service-connected death benefits payable to the spouse or domestic partner and child of any Group F member who dies on or after July 1, 2003.

The effective date of the amendments made to this section by 2001 L.M.C., ch. 28, § 6, is the same effective date as 1998 L.M.C., ch. 31, § 1.

1997 L.M.C., ch. 28, § 2, states:

(a) This Act applies to Employees’ Retirement System benefits that are based on the death of a member on or after January 1, 1995.

(b) The Department of Human Resources must notify:

(1) active employees;

(2) retirees; and

(3) any surviving spouse or child of a member who died on or after January 1, 1995,

about the changes in law contained in this Act. The Department may notify active employees and retirees in any form designed to reach substantially all active employees and retirees. The Department must provide actual notice to any known surviving spouse, surviving child, and other person affected by this Act in connection with the death of a member between January 1, 1995 and the date this Act takes effect [Nov. 17, 1997].

(c) Any person affected by this Act in connection with the death of a member between January 1, 1995, and the date this Act takes effect [Nov. 17, 1997], within 60 days after the person receives the notice required by this Section, file any election of benefits or any other document that the person could have filed if this Act were in effect when the member died.

(d) The notification requirement in subsection (b) and the authority under subsection (c) to file an election of benefits or other document expire after December 31, 1999.

(e) If the System paid a death benefit on behalf of a member who died on or after January 1, 1995, to the member’s estate before May 15, 1997, any benefit that becomes payable to a surviving spouse or child of the member because of this Act must be reduced by the amount of the System’s payment to the member’s estate."

Division 4. Administration.

Sec. 33-47. Administration.

(a) Responsibility for administration. The chief administrative officer shall be responsible for the administration of the retirement system.

(b) Regulations for administration. The county executive must establish regulations, adopted under method (1) of section 2A-15 of this Code, for the administration of the retirement system, within the limitations of this article. However, the county executive must establish regulations, adopted under method (3) of section 2A-15, for the administration of the elected officials' plan.

(c) Chief administrative officer. Except for the powers of the board, the chief administrative officer has the power and the duty to take all actions and to make all decisions to administer the retirement system.

(d) Powers and duties of the Chief Administrative Officer. The chief Administrative Officer has, but is not limited to, the following powers and duties:

(1) Interpret the provisions of the retirement system;

(2) Decide the eligibility of any employee and the rights of any member or beneficiary to receive benefits;

(3) Compute the amount of benefits payable to any member or beneficiary;

(4) Authorize disbursements of benefits;

(5) Keep records;

(6) Select and retain the actuary for the retirement system;

(7) After consultation with the board and the actuary for the retirement system, determine the actuarial cost method, and the mortality, turnover, interest rates, and other assumptions to be used in actuarial and other computations for the retirement system;

(8) Consider the recommendation of the actuary for the retirement system on contributions the county makes under this article;

(9) Incur expenses as necessary for the chief administrative officer to administer the retirement system;

(10) Disclose the reports prepared under section 33-51;

(11) Prepare and file reports that are required by law; and

(12) In connection with the participation or withdrawal of an agency as a participating agency in the retirement system:

(A) obtain any data and require any documentation that the Chief Administrative Officer finds necessary;

(B) retain an independent actuary not otherwise under contract to the system to compute the valuation of the accrued benefit of any member or group of members upon withdrawal from the retirement system by a formula set out in regulations adopted under subsection (b); and

(13) Authorize the refund of member contributions, and earnings thereon, to correct any contribution or withholding error; and

(14) Delegate any power or duty under this Section.

(e) Payment of expenses and contributions.

(1) The county must pay contributions of the county to the retirement system from appropriations approved by the County Council.

(2) The board must pay:

(A) operating expenses of the integrated retirement plan, the optional retirement plan, and the guaranteed retirement income plan from the assets of these plans; and

(B) operating expenses of the elected officials' plan from plan assets or from County government assets, at the direction of the Chief Administrative Officer.

(f) Exemption. Chapter 11B does not apply to procurement of goods and services for the retirement system by the chief administrative officer. (Ord. No. 5-152; Ord. No. 6-195, § 1; 1974 L.M.C., ch. 59, § 8; 1978 L.M.C., ch. 44, § 1; 1984 L.M.C., ch. 24, § 39; 1987 L.M.C., ch. 29, § 6.; 1993 L.M.C., ch. 3, § 1; 1994 L.M.C., ch. 33, § 1; 2001 L.M.C., ch. 28, §§ 6, 15 and 16; 2008 L.M.C., ch. 22, § 1.)

Editor’s noteThe above section is cited in Fultz v. Shaffer, 111 Md.App. 278, 681 A.2d 568 (1996).

See County Attorney Opinion dated 11/14/11 regarding the County’s liability for errors in the administration of the pension and retirement funds of employees.

The effective date of the amendments made to this section by 2001 L.M.C., ch. 28, § 6, is the same as the effective date of 1998 L.M.C., ch. 31, § 1.

Sec. 33-48. Reserved.

Editor's note—Former Section 33-48, relating to the disability retirement board, derived from Ord. No. 5- 152; Ord. No. 6-195, § 1; 1972 L.M.C., ch. 19, § 13; 1974 L.M.C., ch. 31, § 15; 1974 L.M.C., ch. 59, § 9; 1978 L.M.C., ch. 44, § 1; and 1982 L.M.C., ch. 40, § 5, was first repealed by 1985 L.M.C., ch. 49, § 2. Subsequently, 1986 L.M.C., ch. 27, § 1, added § 33-48, disability retirement board, for the reasons set forth in 1986 L.M.C., ch. 27, § 2: “Sec. 2. Ratification of acts.

In adopting chapter 49 of the Laws of Montgomery County (Bill 54-84), it was not the legislative intent that the disability retirement hearing board and any medical review committee cease to function immediately. It was the legislative intent that the board and committees continue to function until a final decision is made on all disability retirement applications filed before the date on which the disability benefits program under article VI of chapter 33 takes effect.

Any action taken by the disability hearing board and any medical review committee since August 11, 1985, are to be given the same force and effect as if this act had been in effect when the actions were taken.”

2010 L.M.C., ch. 49, § 1, again repealed Section 33-48.

Sec. 33-49. Reserved.

Editor's note—Section 33-49, relating to the medical review committee, derived from Ord. No. 5-152; Ord. No. 6-195, § 1; 1974 L.M.C., ch. 59, § 11; and 1978 L.M.C., ch. 44, § 1, was repealed by 1985 L.M.C., ch. 49, § 2. Subsequently, 1986 L.M.C., ch. 27, § 1, added a new § 33-49, medical review committees, which was repealed by 2010 L.M.C., ch. 49, § 1.

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