Retirement Plans at a Glance

State Retirement and Pension
System
Optional Retirement Program
Type of Program Defined benefit plan
Provides a determinable benefit based upon your salary and service.
Defined contribution plan
Provides a benefit based upon your accumulated account balance.
How Benefits Are Determined Benefits are calculated using a specific formula that takes into consideration a fixed percentage of your years of creditable service and final average salary. Benefits are based on your ORP account accumulation which consists of State contributions, income, expenses and investment gains and losses.
Contributions State contributions vary annually. They are determined by the State System’s actuary. You must contribute 7% of your annual salary. The State contributes a certain percentage of our salary each year to your ORP account. (Currently, the contribution rate is 7.25% of salary.)
Investment Management The SRPS assets are invested by professional investment managers chosen by the SRPS Board of Trustees. You do not bear any investment risk. You choose one of two investment vendors when you join the plan. You may invest your account among your vendor’s investment options. You bear all investment risk.
Retirement Benefit Rule of 90 – age and service must equal 90,

OR

Age 65 with at least 10 years of eligibility service

Benefits may begin upon separation from employment. [A federal penalty tax may apply.]
Early Retirement Benefit Age 60 with at least 15 years of
eligibility service (maximum reduction is 30%).
Benefits may begin upon separation from employment. [A federal penalty tax may apply.]
Disability Ordinary disability: you must be permanently disabled and have 5 or more years of eligibility service. Accidental disability: you must be permanently and totally disabled as a direct result of a job related injury. The ORP investment accounts do not include disability benefits. However, if you become disabled, you may receive the full value of your current ORP account balance.
Death Benefit Pre-retirement death benefits are available. The benefit amount depends upon the age and eligibility service at death. Pre-retirement death benefits are available. The benefit is your account balance — including all State contributions and investments earnings — paid to your designated beneficiary(ies) or estate.
Vested Retirement Allowance You are fully vested after completing 10 years of eligibility service. Benefit payments may commence at age 65 or reduced payments may commence as early as age 60 with 15 years of eligibility service. You are immediately fully vested in your total account balance. Benefits may begin upon separation form employment. [A federal penalty tax may apply.]
How Benefits are Paid You may elect one of several payment options available under the program. You may elect one of several payment options available through your investment vendor.
Cost-of-Living Increases Adjustment is made each July 1. Cost-of-living adjustment has a cap of 2.5% when the System earns its assumed rate of return (currently 7.75%) or capped at 1% in years when the interest assumption is not met. ORP benefits do not include an annual cost-of-living adjustment.
Portability SRPS benefits are transferable among certain governmental plans within the State of Maryland ORP accounts are fully transportable to any employer offering the same investment provider.
Transferring Benefits Transfer is possible among certain governmental plans within the State of Maryland. However, there is no transfer between out-of state systems and the State Retirement and Pension System. Your benefits are vested immediately. This means you may accumulate additional funds with the same vendor in another employer’s 403(b) retirement program if that same vendor is offered as an
investment provider in you new employer’s plan.

Last updated: March 10, 2016