Employees’ And Teachers’ Retirement System
|How SRPS Benefits
|The SRPS is the State Retirement and Pension System which provides defined benefit plan benefits based on a specific formula. This formula takes into account your years of creditable service and your final average salary. The Employees’ and Teachers’ Retirement System was closed to new members as of January 1, 1980. This information pertains only to employees who were enrolled prior to January 1, 1980, and who have elected to remain a member of the Retirement system. * PLEASE NOTE: Individuals who enrolled in a state retirement program after January 1, 1980 may be members of the Teachers’ Pension System or the Employees’ 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.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 a percentage of your annual salary according to the plan you’ve selected. There are three plans as follows:Plan A: Member elected to pay a higher contribution rate (generally 7% of pay) to maintain all benefits, including the cost of living adjustments.Plan B: Member continued pre-1984 contribution rate (generally 5% of pay) to maintain all benefits except unlimited cost of living. Cost of living adjustments are capped at 5%.
Plan C: Member chose a combination, or two-part (bifurcated) benefit. The portion of the service prior to the election is calculated at retirement as a Retirement System benefit; the portion of service after the election is calculated at retirement as a Pension System benefit.
|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:Total years and months of creditable service TIMES average final salary
DIVIDED BY 55
EQUALS Annual allowance
(Divide by 12 for basic monthly allowance)
|Retirement Benefit Eligibility||Benefits are available through normal, early, vested, or disability retirement.|
|Normal Retirement||You may retire with unreduced benefits:
|Former employees may receive benefits if they were vested (had at least 5 years of eligibility service) when they terminated employment. Your benefit is calculated using your total creditable service at termination. A vested allowance is payable at age 60.|
|There are two types of disability retirement benefits — ordinary and accidental. To qualify for ordinary 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.|
|The basic benefit is computed using the service retirement formula, with a minimum benefit equal to 25% of the average final salary. This means that your benefit is computed as a service retirement benefit without reduction. If you choose one of the optional allowances, the benefit will be less.|
|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, plus an annuity based on the member’s contributions. If you choose one of the optional allowances, the benefit will be less.|
|Early Retirement||The requirement for early retirement under the Retirement System is a minimum of 25 years of service, regardless of age. If you opt for early retirement you will receive a smaller monthly benefit. The reduction is 6% for each year the payment begins prior to age 60, or 30 years of service, whichever produces the smaller reduction. The reduction is calculated on a monthly basis, which means that generally, the benefit is reduced by .005 of each month that payment begins early. If you are in the Teachers’ Retirement System, the reduction for service is .006 for each month prior to 30 years service or age 60.|
|Survivor/Death Benefits||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:
Your surviving spouse may have a choice of selecting a monthly retirement benefit instead of the lump-sum payments described above, provided:
You may change beneficiaries at any time before retirement by submitting the applicable change form to your Campus Benefits Counselor.
|How Benefits Are
|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 basis 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:
|When you retire under the SRPS program, you may receive a cost-of-living (COLA) increase to your retirement benefit. The amount is based on increases in the average Consumer Price Index, All Urban Index, as determined by the U.S. Department of Labor. Members of the Retirement System receive a compounded COLA, meaning the increase is calculated on the sum of their initial benefit, plus the previous years’ increases. COLA limits vary among the three plans. Plan A has no cap (unlimited) and Plan B has a 5% cap. Plan C (bifurcated plan) has a two-part calculation. The portion paid out under the old system is unlimited, or it will have a 5% cap, depending on whether the selected plan was Plan A or B. The portion paid out under the new system has a 3% cap. You will receive your cost-of-living increase each July 1. You must be retired for at least one full year, as of the initial July 1 date, to be eligible to receive the increase. Otherwise, the increase will commence the following July 1.|