Employees’ And Teachers’ Reformed Contributory Pension System
* PLEASE NOTE: Individuals who enrolled in a state retirement program prior to January 1, 1980 may be members of the Teachers’ Retirement System or the Employees’ Retirement System. If you participate in either of these plans, click here. Individuals who have enrolled in a state retirement program after January 1, 1980 and prior to July 1, 2011 are members of the Employees’ and Teachers’ Alternate Pension System, if you participate in either of these plans, click here. If you are uncertain which plan you are enrolled in, please contact the Employee Benefits Office.
How SRPS Benefits Are Determined
The SRPS is the State Retirement and Pension System defined benefit plan that provides benefits based on a specific formula. This formula takes into account your years of creditable service and your final average salary. When you retire, you have several payment options to choose from.
Contributions to the SRPS
Each year, the State contributes a certain percentage of your salary to the SRPS which is determined annually by the State System’s actuary. You must contribute 7% of your annual salary.
Several professional investment managers who are selected and monitored by the Board of Trustees of the SRPS invest the assets of the SRPS. Any investment losses or funding shortfalls are the responsibility of the State of Maryland.
Your retirement benefit is calculated using the following formula:
.015 times Average
Final Salary (AFS) times Years of Credit
Annual Basic Allowance
Annual Basic Allowance divided by 12 = Monthly Basic Allowance
Retirement Benefit Eligibility
Benefits are available through normal, early, vested, or disability retirement.
You may retire with unreduced benefits:
- Rule of 90 – age and service must equal 90
- at age 65 with at least 10 years of eligibility service
Former employees may receive benefits if they were vested (had at least 10 years of eligibility service) when they terminated employment. Your benefit is calculated using your total creditable service at termination, since no additional service is earned after termination. If you terminate employment with at least 15 years of strong>eligibility service, you may elect a reduced monthly benefit beginning at age 60. Any benefit payable before age 65 will be reduced by 1/2% for each month you retire before age 65. If you wait until age 65, you receive a full retirement allowance.
There are two types of disability retirement benefits: ordinary and accidental. To qualify for ordinary disability retirement, you must be permanently disabled and have at least five years of eligibility service. Accidental disability benefits are paid if you are permanently and totally disabled as the direct result of a job-incurred injury.
Ordinary Disability Benefit
Creditable service is based on actual service when disabled, plus years and months of service to age 65. If you are working part-time when disabled, service is projected as part-time.
Accidental Disability Benefit
Unlike ordinary disability, accidental disability does not make use of the normal service retirement formula. The accidental benefit is based on two-thirds of an employee’s average final salary at the time of disability, regardless of the member’s age.
If you retire early (age 60 with at least 15 years service), your monthly benefit will be equal to your pension benefit, reduced by 1/2% for each month you retire before age 65.
If you die after retirement, your benefit will be determined by the payment option you selected. If you die as a former employee eligible for a vested benefit, your contributions are paid in a lump sum to your designated beneficiary(ies) or estate. If you die before retirement, your designated beneficiary(ies) or estate will receive:
- a lump-sum benefit equal to your contribution plus interest (is you contributed)
- a lump sum equal to 100% of your salary if you had at least one year of service or died in the performance of duty.
Your surviving spouse may have a choice of selecting a monthly retirement benefit instead of the lump-sum payments described above, provided:
- you were at least age 65 when you died, and you named your surviving spouse as your sole primary beneficiary,
- you had at least 25 years of eligibility service (regardless of age) when you die and you named your surviving spouse as your sole primary beneficiary,
- you were at least age 60 when you died, had 15 or more years of eligibility service, and named your surviving spouse as your sole primary beneficiary.
You may change beneficiaries at any time before retirement by
submitting the applicable change form to your Campus Benefits Counselor.
How Benefits Are Paid
You have several payment options from which to choose. You may choose to receive monthly payments throughout your lifetime with all benefits ending when you die. This option is called the basic allowance and provides the maximum monthly benefit for you alone. Under this option there is no beneficiary benefit. You may select an option that reduces your monthly benefit but provides varying degrees of protection for your beneficiary(ies). You may choose one of the following options:
- Option 1 Provides a lower monthly benefit than the Basic Allowance, but guarantees monthly payments that equal the total of your retirement benefit=s Present Value. The Present Value of your benefit is figured at the time of your retirement. If you die before receiving monthly payments that add up to the Present Value, the remaining payments will be paid in a lump sum to your designated beneficiary or beneficiaries who remain alive. For state employees: Option 1 does not provide for continued beneficiary health coverage after your death.
- Option 2 guarantees that at your death your entire monthly benefit will continue to be paid to your beneficiary for the remainder of their lifetime. Payments end upon the death of your beneficiary.
- Option 3 guarantees upon your death that your beneficiary receives 50% of your monthly benefit for the remainder of their lifetime. Payment ends upon the death of your beneficiary.
- Option 4 guarantees a return of your contributions with interest. If you die before receiving the full guaranteed amount, the remainder is paid in single lump sum to your beneficiary(ies).
- Option 5 guarantees upon your death that your beneficiary receives your entire monthly benefit for their lifetime. However, if your beneficiary dies before you, your reduced benefit is increased to the amount you would have received if you elected your basic allowance.
- Option 6 guarantees your surviving beneficiary a lifetime monthly benefit equal to 50% of your monthly benefit. However, if your beneficiary dies before you, your reduced benefit is increased to the amount you would have received if you elected your basic allowance.
When you retire under the SRPS program, you may receive an annual cost-of-living increase to your basic retirement benefit. The amount is based on increases in the average Consumer Price Index — All Urban Index as determined by the US. Department of Labor.Members of the Employees’ and Teachers’ Reform Contributory Pension System receive a compounded COLA, meaning that the increase is applied to the current allowance. However, your increase cannot exceed 2.5% per year 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. You will receive your cost-of-living increase each July 1, provided you have been retired for at least one full year as of July 1.
Separation of Employment Prior to Vesting
Individuals who leave State or municipal employment have the option to withdraw their accumulated contributions from the SRPS and terminate their membership. Members who separate from employment with less than the required amount of eligibility service to be eligible for a future retirement benefit should strongly consider withdrawing their accumulated balance of employee contributions and interest from the System. Once the membership period ends for the member, interest is no longer earned on their balance of employee contributions remaining in the system.
Membership in the SRPS ends if the member:
- Is separated from employment for more than four years
- Withdraws his or her accumulated contributions, if any;
- Becomes a retiree; or
A member may elect to withdraw his/her contributions from the system by submitting an Application for Withdrawal of Accumulated Contributions packet to the SRA. The refund will include all contributions and accumulated interest up to the date of payment.