How SRPS Benefits
Are
Determined |
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. |
Investment
Management |
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. |
Benefit
Calculation
|
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:
- at any age with 30 years of creditable service,
- at age 60 regardless of service
|
Vested
Retirement |
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.
|
Disability
Retirement |
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. |
Ordinary
Disability Benefit |
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:
- a lump-sum benefit equal to your contribution plus interest, and
- 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 eligible to retire under normal or early retirement,
OR
- you were at least age 55 when you died, had 15 or more years of creditable
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 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:
- Option 1 guarantees a return of your contributions (if any)
with interest plus the State's contributions. If you
die before receiving the full guaranteed amount, the remainder is paid
in
a single
lump-sum payment to your beneficiary(ies).
- 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 the basic allowance.
- Special Option 7 allows you to "personalize" your
benefit to meet your specific needs. The Board of Trustees must approve
all personalized options.
|
Cost-of-Living
Increases |
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. |
