1state retirement agency of maryland leaving employment seminar

1State Retirement Agency of Maryland

Leaving Leaving Employment Employment

SeminarSeminar


OverviewOverview There are three groups that will be There are three groups that will be covered during this seminar: covered during this seminar:

Group 1: Members currently Group 1: Members currently

eligible for a retirement allowanceeligible for a retirement allowance Group 2: Vested members who are Group 2: Vested members who are

eligible for a future monthly allowanceeligible for a future monthly allowance Group 3: Non-vested members who are Group 3: Non-vested members who are

ineligibleineligible for a future monthly allowance for a future monthly allowance


Eligibility RequirementsEligibility RequirementsPension SystemPension System

Service Retirement (full benefit)Service Retirement (full benefit) Age 62 with at least 5 years of Age 62 with at least 5 years of

eligibility service eligibility service oror 30 years of eligibility service 30 years of eligibility service

regardless of ageregardless of age Early Retirement (reduced Early Retirement (reduced

benefit)benefit) Age 55 with at least 15 years of Age 55 with at least 15 years of

eligibility serviceeligibility service Greatest reduction is 42%Greatest reduction is 42%


Eligibility RequirementsEligibility RequirementsRetirement SystemRetirement System

Service Retirement (full benefit)Service Retirement (full benefit) Age 60 Age 60 oror 30 years of service regardless of age30 years of service regardless of age

Early Retirement (reduced benefit)Early Retirement (reduced benefit) 25 years of service regardless of age25 years of service regardless of age Greatest reduction is 30%Greatest reduction is 30%


Purchase of ServicePurchase of ServiceNormal CostNormal Cost

Missed contributions plus interest to Missed contributions plus interest to date of purchasedate of purchase

May be purchased at any time during May be purchased at any time during membershipmembership Must be on active payroll or SRA Must be on active payroll or SRA

Approved Leave of Absence Approved Leave of Absence Submit Form 26Submit Form 26 Example:Example:

SRA Approved Leave of Absence (Same SRA Approved Leave of Absence (Same System)System)


Purchase ServicePurchase ServiceFull CostFull Cost

You pay the cost to fund the benefit your You pay the cost to fund the benefit your additional purchased service will provide.additional purchased service will provide.

Submit Form 26 and Form 9 when you are Submit Form 26 and Form 9 when you are within 12 months of retirementwithin 12 months of retirement Must be on active payroll to purchase service Must be on active payroll to purchase service

creditcredit May purchase a minimum of 1 month and a May purchase a minimum of 1 month and a

maximum of 10 years of service creditmaximum of 10 years of service credit Examples:Examples:

Federal GovernmentFederal Government Public, Private or Parochial School TeachingPublic, Private or Parochial School Teaching Municipal EmploymentMunicipal Employment Prior State service for which you are not Prior State service for which you are not

receiving creditreceiving credit


Purchase of ServicePurchase of Service

Members may use funds from Members may use funds from 457(b), 403(b), 401(k) or IRA for 457(b), 403(b), 401(k) or IRA for purchasing service credit. purchasing service credit. Member must complete Form Member must complete Form SRA-192 Prior to Retirement.SRA-192 Prior to Retirement.


Military CreditMilitary Credit Must have 10 years of creditable serviceMust have 10 years of creditable service May receive up to 5 years additional credit May receive up to 5 years additional credit Form 43 with military documentation Form 43 with military documentation

verifying serviceverifying service Types of Military ServiceTypes of Military Service

Active dutyActive duty ReservesReserves National GuardNational Guard


Monthly Option Monthly Option SelectionSelection Basic Allowance (Maximum)Basic Allowance (Maximum)

Largest monthly allowanceLargest monthly allowance No protection to beneficiary(ies)No protection to beneficiary(ies) Benefits cease at deathBenefits cease at death

Single Life AnnuitiesSingle Life Annuities Lifetime monthly benefit to retiree and may Lifetime monthly benefit to retiree and may

provide single payment to beneficiary(ies) provide single payment to beneficiary(ies) at retiree’s deathat retiree’s death

Dual Life AnnuityDual Life Annuity Provides a continued monthly benefit to a Provides a continued monthly benefit to a

surviving beneficiarysurviving beneficiary


Single Life Annuities:Single Life Annuities:Option 1Option 1

Lifetime monthly benefit to the retireeLifetime monthly benefit to the retiree

Guarantees the full return of the present value of Guarantees the full return of the present value of the retiree’s Basic Allowance computed at the the retiree’s Basic Allowance computed at the time of retirement. If the retiree dies before time of retirement. If the retiree dies before receiving the full guaranteed amount, the receiving the full guaranteed amount, the remainder, if any, is paid in a lump-sum payment remainder, if any, is paid in a lump-sum payment to the designated beneficiary(ies). to the designated beneficiary(ies).

Example: Monthly for the remainder of your life Example: Monthly for the remainder of your life $1,800. The Present Value is $250,000. If you die $1,800. The Present Value is $250,000. If you die before receiving the full guaranteed present value before receiving the full guaranteed present value at the monthly rate of $1,800, your beneficiaries at the monthly rate of $1,800, your beneficiaries will be paid the balance in a lump-sum payment.will be paid the balance in a lump-sum payment.


Single Life Annuities:Single Life Annuities:Option 4Option 4

Lifetime monthly benefit to the retireeLifetime monthly benefit to the retiree

Provides a return of the value of the member’s Provides a return of the value of the member’s accumulated contributions (employee contributions accumulated contributions (employee contributions and interest). If the retiree dies before receiving and interest). If the retiree dies before receiving the full guaranteed amount, the remainder is paid the full guaranteed amount, the remainder is paid in a single sum to the retiree’s beneficiary(ies). in a single sum to the retiree’s beneficiary(ies).

Example: Monthly for the remainder of your life Example: Monthly for the remainder of your life $1,900. The value of your accumulated $1,900. The value of your accumulated contributions and interest is $10,500. If you die contributions and interest is $10,500. If you die before receiving the total accumulated before receiving the total accumulated contributions and interest at the monthly rate of contributions and interest at the monthly rate of $75, your beneficiaries will be paid the balance in a $75, your beneficiaries will be paid the balance in a lump-sum paymentlump-sum payment


Dual Life AnnuitiesDual Life AnnuitiesProvides a monthly benefit Provides a monthly benefit

throughout the life of the retiree throughout the life of the retiree and then provides a continued and then provides a continued lifetime monthly benefit to a sole lifetime monthly benefit to a sole surviving beneficiary. surviving beneficiary.

Option 2Option 2 100% survivorship - Same lifetime 100% survivorship - Same lifetime

monthly benefit to beneficiary monthly benefit to beneficiary

Option 3Option 3 50% survivorship - 1/2 lifetime monthly 50% survivorship - 1/2 lifetime monthly

benefit to beneficiarybenefit to beneficiary


Dual Life AnnuitiesDual Life Annuities

Option 5Option 5 100% survivorship (with “pop-up” provision) - 100% survivorship (with “pop-up” provision) -

Same lifetime monthly benefit to beneficiarySame lifetime monthly benefit to beneficiary

Option 6Option 6 50% survivorship (with “pop-up” provision) - 50% survivorship (with “pop-up” provision) -

1/2 lifetime monthly benefit to beneficiary1/2 lifetime monthly benefit to beneficiary

“Pop-Up” provision - If beneficiary dies before the retiree, the retiree’s monthly benefit “pops-up” to the Basic Allowance unless the retiree renames another beneficiary


Naming a Beneficiary Naming a Beneficiary Under Options 2 and 5Under Options 2 and 5

You cannot designate a You cannot designate a beneficiary who is more than 10 beneficiary who is more than 10 years younger than you unless the years younger than you unless the beneficiary is your spouse or beneficiary is your spouse or disabled child.disabled child.


Unused Sick LeaveUnused Sick Leave Must retire within 30 days of Must retire within 30 days of

terminating employmentterminating employment Increases monthly benefitIncreases monthly benefit Cannot be used to qualify for a benefitCannot be used to qualify for a benefit Amount of days verified by employer at Amount of days verified by employer at

time of retirementtime of retirement 22 days of unused sick leave equal one 22 days of unused sick leave equal one

month (if 11 or more days remaining, month (if 11 or more days remaining, an additional month is credited)an additional month is credited)

Maximum of 15 sick days per year of Maximum of 15 sick days per year of service may be creditedservice may be credited


Vested BenefitsVested BenefitsFive years Five years == Vested Vested

Member retains accrued benefit Member retains accrued benefit as long as no withdrawal of contributionsas long as no withdrawal of contributions

Vested Allowance payable in futureVested Allowance payable in future

Pension SystemPension SystemAge 62, Age 62, ororAge 55 with 15 years of serviceAge 55 with 15 years of service

Retirement SystemRetirement SystemAge 60Age 60


Vested BenefitsVested Benefits Keep your last Personal Statement of Benefits Keep your last Personal Statement of Benefits

(PSB)(PSB) Inform Retirement Agency of address changesInform Retirement Agency of address changes Contact the Retirement Agency when you become Contact the Retirement Agency when you become

eligibleeligible Keep beneficiaries currentKeep beneficiaries current

Survivors’ payment prior to retirement will Survivors’ payment prior to retirement will consist of vested member’s accumulated consist of vested member’s accumulated contributionscontributions


Inside Your PSBInside Your PSB

$ 720


Withdrawal of Withdrawal of ContributionsContributions

Withdraw contributions = forfeit benefitsWithdraw contributions = forfeit benefits Refund may be rolled into qualified plan, Refund may be rolled into qualified plan,

IRA or annuityIRA or annuity Return to Active Employment Return to Active Employment

in Alternate Contributory Pension System in Alternate Contributory Pension System - may redeposit contributions - may redeposit contributions and interest to regain serviceand interest to regain service


Non Vested Non Vested Members:Members:

Four years to return to ACPS membership and Four years to return to ACPS membership and retain non-vested service retain non-vested service OROR withdraw withdraw contributionscontributions

Withdrawn contributions - eligible for rollover Withdrawn contributions - eligible for rollover into qualified plan, IRA or annuityinto qualified plan, IRA or annuity

Return to membership may request to redeposit Return to membership may request to redeposit contributions and restored prior servicecontributions and restored prior service

Forfeit unused sick leave at termination of paid Forfeit unused sick leave at termination of paid employmentemployment

Less than 5 years of eligibility service:Less than 5 years of eligibility service:


Termination of Termination of MembershipMembership

Membership in Alternate Contributory Pension Membership in Alternate Contributory Pension System (System (ACPS)ACPS) terminates four years after paid terminates four years after paid employment ends. Member may no longer apply employment ends. Member may no longer apply for disability retirementfor disability retirement

Member returns to active employment with a Member returns to active employment with a participating employer in ACPS, may be eligible participating employer in ACPS, may be eligible to combine vested and current serviceto combine vested and current service

Forfeit unused sick leave at termination of paid Forfeit unused sick leave at termination of paid employmentemployment


Title 37 TransferTitle 37 TransferTwo Types:Two Types: Transfer from one SRPS systemTransfer from one SRPS system to another SRPS systemto another SRPS system Transfer from SRPS to anotherTransfer from SRPS to another Maryland Municipal systemMaryland Municipal system

Transfers are permitted if:Transfers are permitted if: No break in employment No break in employment (less than 30 days)(less than 30 days) Must be completed within 1 yearMust be completed within 1 year of transferring to the new systemof transferring to the new system

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Sources of Sources of InformationInformationTelephoneTelephone

410-625-5555 or410-625-5555 ortoll-free 1-800-492-5909toll-free 1-800-492-5909

Mail/Office VisitsMail/Office VisitsState Retirement Agency of MDState Retirement Agency of MD120 East Baltimore St., 14th Fl.120 East Baltimore St., 14th Fl.Baltimore, MD 21202-6700Baltimore, MD 21202-6700

Internet Web SiteInternet Web Sitewww.sra.state.md.uswww.sra.state.md.us

[email protected]@sra.state.md.us

InformationInformationAfter You Retire After You Retire brochurebrochureRetiree News & Notes Retiree News & Notes newsletternewsletter

1state retirement agency of maryland leaving employment seminar

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