# State Personnel and Pensions (GSP)

## Title 20. Definitions and General Provisions

### Subtitle 2. General Provisions

#### Section 20-201

(a) Except as provided in subsection (b) of this section, and except as otherwise expressly provided, this title and Titles 21 and 29 of this article apply to each State system.

(b) Title 21, Subtitle 4 and Titles 22 through 31 of this article do not apply to the Legislative Pension Plan.

#### Section 20-202

An actuarial equivalent shall be an equivalent amount based on actuarial assumptions adopted by the Board of Trustees.

#### Section 20-203

On retirement, an Executive Branch official, judge, legislator, or other State employee may not receive benefits as a member of more than one State system for the same period of employment as a member.

#### Section 20-204

(a)

  (1) This subsection applies only to an individual who is a member of:

    (i) the Employees' Retirement System; or

    (ii) the Teachers' Retirement System.

  (2) Except as provided in paragraph (3) of this subsection, the average final compensation of a member equals the average annual earnable compensation of the member for:

    (i) the 3 years of employment as a member during which the member's earnable compensation was highest, if the member was employed at least 3 years as a member; or

    (ii) the member's total period of employment, if the member was employed less than 3 years as a member.

  (3) Except as provided in paragraph (4) of this subsection, the member's average final compensation does not include a salary increase in the last 3 years of employment if it is an extraordinary salary increase according to regulations that the Board of Trustees adopts.

  (4) A salary increase may not be considered an extraordinary salary increase under paragraph (3) of this subsection if the salary increase is:

    (i) because of a member's promotion; or

    (ii) subject to paragraph (5) of this subsection, related to a review and adjustment to the compensation for a position classification to:

      (1) address inequities in compensation among employees in the same position classification; or

      (2) increase the compensation for the position classification to be more consistent with market compensation for the position.

  (5)

    (i) At the time of retirement, a member who has received a salary increase in accordance with paragraph (4)(ii) of this subsection shall file with the State Retirement Agency a form provided by the State Retirement Agency that:

      (1) is completed by the member's employer; and

      (2) certifies that the member received a salary increase in accordance with paragraph (4)(ii) of this subsection.

    (ii) A member shall submit to the State Retirement Agency the completed form required under subparagraph (i) of this paragraph within 30 days from the date of the State Retirement Agency's written notice that the member has received an extraordinary salary increase.

(b)

  (1) This subsection applies only to an individual who on or before June 30, 2011, is a member of:

    (i) the Correctional Officers' Retirement System; or

    (ii) the State Police Retirement System.

  (2) Except as provided in paragraph (3) of this subsection, the average final compensation of a member equals the average annual earnable compensation of the member for:

    (i) the 3 years of employment as a member during which the member's earnable compensation was highest, if the member was employed at least 3 years as a member; or

    (ii) the member's total period of employment, if the member was employed less than 3 years as a member.

  (3)

    (i) Except as provided in paragraph (4) of this subsection, the member's average final compensation does not include a salary increase in the last 3 years of employment if it is an extraordinary salary increase according to regulations that the Board of Trustees adopts.

    (ii)

      (1) This subparagraph applies only to a member of the State Police Retirement System.

      (2) If a member of the State Police Retirement System who transferred from another actuarial retirement system in the State retires after less than 3 years of employment as a member of the State Police Retirement System, the earnable compensation as a member in the other system shall be used in the determination of average final compensation.

  (4) A salary increase may not be considered an extraordinary salary increase under paragraph (3)(i) of this subsection if the salary increase is:

    (i) because of a member's promotion; or

    (ii) subject to paragraph (5) of this subsection, related to a review and adjustment to the compensation for a position classification to:

      (1) address inequities in compensation among employees in the same position classification; or

      (2) increase the compensation for the position classification to be more consistent with market compensation for the position.

  (5)

    (i) At the time of retirement, a member who has received a salary increase in accordance with paragraph (4)(ii) of this subsection shall file with the State Retirement Agency a form provided by the State Retirement Agency that:

      (1) is completed by the member's employer; and

      (2) certifies that the member received a salary increase in accordance with paragraph (4)(ii) of this subsection.

    (ii) A member shall submit to the State Retirement Agency the completed form required under subparagraph (i) of this paragraph within 30 days from the date of the State Retirement Agency's written notice that the member has received an extraordinary salary increase.

(c)

  (1) This subsection applies only to an individual who on or after July 1, 2011, becomes a member of:

    (i) the Correctional Officers' Retirement System; or

    (ii) the State Police Retirement System.

  (2) Except as provided in paragraph (3) of this subsection, the average final compensation of a member equals the average annual earnable compensation of the member for:

    (i) the 5 years of employment as a member during which the member's earnable compensation was highest, if the member was employed at least 5 years as a member; or

    (ii) the member's total period of employment, if the member was employed less than 5 years as a member.

  (3)

    (i) Except as provided in paragraph (4) of this subsection, the member's average final compensation does not include a salary increase in the last 5 years of employment if it is an extraordinary salary increase according to regulations that the Board of Trustees adopts.

    (ii)

      (1) This subparagraph applies only to a member of the State Police Retirement System.

      (2) If a member of the State Police Retirement System who transferred from another actuarial retirement system in the State retires after less than 5 years of employment as a member of the State Police Retirement System, the earnable compensation as a member in the other system shall be used in the determination of average final compensation.

  (4) A salary increase may not be considered an extraordinary salary increase under paragraph (3)(i) of this subsection if the salary increase is:

    (i) because of a member's promotion; or

    (ii) subject to paragraph (5) of this subsection, related to a review and adjustment to the compensation for a position classification to:

      (1) address inequities in compensation among employees in the same position classification; or

      (2) increase the compensation for the position classification to be more consistent with market compensation for the position.

  (5)

    (i) At the time of retirement, a member who has received a salary increase in accordance with paragraph (4)(ii) of this subsection shall file with the State Retirement Agency a form provided by the State Retirement Agency that:

      (1) is completed by the member's employer; and

      (2) certifies that the member received a salary increase in accordance with paragraph (4)(ii) of this subsection.

    (ii) A member shall submit to the State Retirement Agency the completed form required under subparagraph (i) of this paragraph within 30 days from the date of the State Retirement Agency's written notice that the member has received an extraordinary salary increase.

#### Section 20-205

(a) This section applies only to an individual who on or before June 30, 2011, is a member of:

  (1) the Employees' Pension System;

  (2) the Local Fire and Police System;

  (3) the Law Enforcement Officers' Pension System; or

  (4) the Teachers' Pension System.

(b)

  (1) In this subsection, "break in service" means a period of employment in which the member's employer did not:

    (i) deduct the member contributions from the compensation of the member; or

    (ii) report the hours worked by the member.

  (2)

    (i) For the purpose of computing benefits under this Division II, the average final compensation of a member equals the average annual earnable compensation of the member, adjusted as provided in this section, during the 3 consecutive years that provide the highest average earnable compensation.

    (ii) If the member experienced any break in service during the 3 consecutive years that provide the member's highest average earnable compensation, the Board of Trustees:

      (1) may not include in the computation of average final compensation the period of months of the breaks in service, that otherwise would be included in the computation; and

      (2) in order to generate the highest average earnable compensation for the member, shall extend the 3-year period by an equal number of months immediately preceding or following that period.

(c)

  (1) This subsection applies to a member of the Employees' Pension System or Teachers' Pension System who is subject to the noncontributory pension benefit and who was on authorized leave of absence at partial pay or without pay during the last 3 years of employment as a member.

  (2) If the period used to determine average final compensation is the period that immediately precedes the date of retirement or other separation from employment, the Board of Trustees:

    (i) may not include in the computation of average final compensation the period of months of the leave of absence, not exceeding 12, that otherwise would be included in the computation; and

    (ii) shall substitute an equal number of months immediately preceding that period.

(d)

  (1) This subsection applies to a member whose eligibility service has been adjusted under this Division II to compute creditable service, on the basis of the member having completed less than the normal hours of service for the member's position.

  (2) A member's earnable compensation shall be adjusted to a full-time basis for any period included in the computation of average final compensation.

(e)

  (1) Except as provided in paragraph (2) of this subsection, the member's average final compensation does not include a salary increase in the last 3 years of employment if it is an extraordinary salary increase according to regulations that the Board of Trustees adopts.

  (2) A salary increase may not be considered an extraordinary salary increase under paragraph (1) of this subsection if the salary increase is:

    (i) because of a member's promotion; or

    (ii) subject to paragraph (3) of this subsection, related to a review and adjustment to the compensation for a position classification to:

      (1) address inequities in compensation among employees in the same position classification; or

      (2) increase the compensation for the position classification to be more consistent with market compensation for the position.

  (3)

    (i) At the time of retirement, a member who has received a salary increase in accordance with paragraph (2)(ii) of this subsection shall file with the State Retirement Agency a form provided by the State Retirement Agency that:

      (1) is completed by the member's employer; and

      (2) certifies that the member received a salary increase in accordance with paragraph (2)(ii) of this subsection.

    (ii) A member shall submit to the State Retirement Agency the completed form required under subparagraph (i) of this paragraph within 30 days from the date of the State Retirement Agency's written notice that the member has received an extraordinary salary increase.

#### Section 20-205.1

(a) This section applies only to an individual who on or after July 1, 2011, becomes a member of:

  (1) the Employees' Pension System;

  (2) the Law Enforcement Officers' Pension System; or

  (3) the Teachers' Pension System.

(b)

  (1) In this subsection, "break in service" means a period of employment in which the member's employer did not:

    (i) deduct the member contributions from the compensation of the member; or

    (ii) report the hours worked by the member.

  (2)

    (i) For the purpose of computing benefits under this Division II, the average final compensation of a member equals the average annual earnable compensation of the member, adjusted as provided in this section, during the 5 consecutive years that provide the highest average earnable compensation.

    (ii) If the member experienced any break in service during the 5 consecutive years that provide the member's highest average earnable compensation, the Board of Trustees:

      (1) may not include in the computation of average final compensation the period of months of the breaks in service that otherwise would be included in the computation; and

      (2) in order to generate the highest average earnable compensation for the member, shall extend the 5-year period by an equal number of months immediately preceding or following that period.

(c)

  (1) This subsection applies to a member whose eligibility service has been adjusted under this Division II to compute creditable service, on the basis of the member having completed less than the normal hours of service for the member's position.

  (2) A member's earnable compensation shall be adjusted to a full-time basis for any period included in the computation of average final compensation.

(d)

  (1) Except as provided in paragraph (2) of this subsection, the member's average final compensation does not include a salary increase in the last 5 years of employment if it is an extraordinary salary increase according to regulations that the Board of Trustees adopts.

  (2) A salary increase may not be considered an extraordinary salary increase under paragraph (1) of this subsection if the salary increase is:

    (i) because of a member's promotion; or

    (ii) subject to paragraph (3) of this subsection, related to a review and adjustment to the compensation for a position classification to:

      (1) address inequities in compensation among employees in the same position classification; or

      (2) increase the compensation for the position classification to be more consistent with market compensation for the position.

  (3)

    (i) At the time of retirement, a member who has received a salary increase in accordance with paragraph (2)(ii) of this subsection shall file with the State Retirement Agency a form provided by the State Retirement Agency that:

      (1) is completed by the member's employer; and

      (2) certifies that the member received a salary increase in accordance with paragraph (2)(ii) of this subsection.

    (ii) A member shall submit to the State Retirement Agency the completed form required under subparagraph (i) of this paragraph within 30 days from the date of the State Retirement Agency's written notice that the member has received an extraordinary salary increase.

#### Section 20-206

(a) In this section, "unused sick leave" means sick leave credit that:

  (1) has not been used before retirement; and

  (2) was available to the member to be used as sick leave during employment.

(b) This section does not apply to:

  (1) the Judges' Retirement System; or

  (2) the Legislative Pension Plan.

(c) Except as provided in subsections (f) and (g) of this section, a member is entitled to receive creditable service for unused sick leave if the member retires on or before 30 days after the member is separated from employment with a participating employer or a participating governmental unit that has withdrawn from one of the several systems under Title 31 of this article.

(d)

  (1) At retirement, a member is entitled to receive creditable service for unused sick leave, on verification of the unused sick leave to the Board of Trustees.

  (2)

    (i) This subsection does not apply to the Local Fire and Police System or the Law Enforcement Officers' Pension System.

    (ii) A member who separates from employment for reasons other than retirement on or before June 30, 1990, is entitled to receive creditable service for unused sick leave that is reported by the member's employer at the member's separation from employment if the member was entitled to a vested allowance at the time of separation.

(e)

  (1) Subject to paragraphs (2) and (3) of this subsection, for 22 days of unused sick leave a member is entitled to receive 1 month of creditable service.

  (2)

    (i) If a member has at least 11 days but less than 22 days of unused sick leave, the member is entitled to receive 1 month of creditable service.

    (ii) If a member has at least 22 days of unused sick leave, and if fractional days totaling 11 or more result from the application of the formula described in paragraph (1) of this subsection, a member is entitled to receive 1 additional month of creditable service.

  (3) For the purposes of this section:

    (i) a member may not accumulate more than 15 days of sick leave per year;

    (ii) unless sick leave credit is accepted and credited by the current participating employer, a member may not receive credit for unused sick leave granted by a former employer; and

    (iii) in determining the amount of unused sick leave a member is eligible to use as creditable service at retirement, the Board of Trustees shall use the lesser of:

      (1) the member's number of years of creditable service, not including credit for unused sick leave, multiplied by 15; or

      (2) the member's cumulative number of unused sick leave days reported by the participating employer.

(f)

  (1) This subsection applies to a member of the Employees' Pension System who:

    (i) was a member of the Correctional Officers' Retirement System and was transferred from the Correctional Officers' Retirement System to the Employees' Pension System as a result of a change in position with the same employer that rendered the individual ineligible for membership in the Correctional Officers' Retirement System; and

    (ii) did not transfer service credit from the Correctional Officers' Retirement System to the Employees' Pension System.

  (2) Subject to paragraph (3) of this subsection, a member is entitled to receive creditable service for the total amount of unused sick leave accrued by the member at the time of retirement.

  (3) The creditable service for unused sick leave shall be calculated for each of the two State systems by multiplying the total amount of unused sick leave, calculated in accordance with subsection (e) of this section, by a fraction:

    (i) the numerator of which is the creditable service earned in the State system, not including the creditable service for unused sick leave; and

    (ii) the denominator of which is the total creditable service earned in both State systems, not including the creditable service for unused sick leave.

(g)

  (1) This subsection applies to a member of the Correctional Officers' Retirement System who:

    (i) was a member of the Employees' Pension System or Employees' Retirement System and was transferred from the Employees' Pension System or Employees' Retirement System to the Correctional Officers' Retirement System as a result of a change in membership within the several systems that rendered the individual ineligible for membership in the Employees' Pension System or the Employees' Retirement System;

    (ii) did not transfer service credit from the Employees' Pension System or the Employees' Retirement System to the Correctional Officers' Retirement System; and

    (iii)

      (1) retires under Sec. 25-401 of this article, and receives a vested benefit from the Employees' Pension System or the Employees' Retirement System;

      (2) retires under Sec.Sec. 22-401, 22-402, 23-401, or 23-402 of this article, and receives a vested benefit from the Correctional Officers' Retirement System for service earned on or after July 1, 2016; or

      (3) retires with a vested benefit from the Employees' Pension System or Employees' Retirement System, and earned service in the Correctional Officers' Retirement System on or after July 1, 2016, for which the individual is not eligible for a benefit.

  (2) Subject to paragraphs (3) and (4) of this subsection, a member is entitled to receive creditable service for the total amount of unused sick leave accrued by the member at the time of retirement.

  (3)

    (i) This paragraph applies to an individual described under paragraph (1)(iii)1 or 2 of this subsection.

    (ii) The creditable service for unused sick leave shall be calculated for each of the two State systems by multiplying the total amount of unused sick leave, calculated in accordance with subsection (e) of this section, by a fraction:

      (1) the numerator of which is the creditable service earned in the State system, not including the creditable service for unused sick leave; and

      (2) the denominator of which is the total creditable service earned in both State systems, not including the creditable service for unused sick leave.

  (4)

    (i) This paragraph applies to an individual described under paragraph (1)(iii)3 of this subsection.

    (ii) An individual's retirement benefit from the Employees' Pension System or Employees' Retirement System shall be adjusted to include any credit for unused sick leave that the individual accrued in the Employees' Pension System or Employees' Retirement System prior to becoming a member of the Correctional Officers' Retirement System:

      (1) on or after July 1, 2016, in a position included under Sec. 25-201(a)(7) of this article;

      (2) on or after July 1, 2017, in a position included under Sec. 25-201(a)(8) or (9) of this article;

      (3) on or after July 1, 2018, in a position included under Sec. 25-201(a)(10) or (11) of this article;

      (4) on or after July 1, 2022, in a position included under Sec. 25-201(a)(12) of this article;

      (5) on or after July 1, 2024, in a position included under Sec. 25-201(a)(13) of this article;

      (6) on or after July 1, 2025, in a position included under Sec. 25-201(a)(14) of this article; or

      (7) on or after July 1, 2026, in a position included under Sec. 25-201(a)(15) of this article.

(h) Credit for unused sick leave may not be used under this section:

  (1) to determine years of eligibility service required for a benefit under this Division II; or

  (2) to compute average final compensation.

(i) A State employee who came into the State system while retaining sick leave and annual leave benefits under a county system and who came under the provisions of Chapter 423 of the Acts of 1971 shall be entitled to the same full credit toward retirement as provided by this section.

#### Section 20-207

(a) This section does not apply to an individual who is a member of a State system on or before June 30, 1996.

(b) Notwithstanding any other provision of law, for plan years beginning on or after July 1, 1996, the annual compensation that may be taken into account when determining the retirement allowance payable to a member of a State system may not exceed the compensation limit under Sec. 401(a)(17)(B) of the Internal Revenue Code and regulations adopted thereunder.

#### Section 20-208

(a) Notwithstanding any other provision of law, the Board of Trustees may not pay an allowance that exceeds the limit on benefit accruals established from time to time under Sec. 415 of the Internal Revenue Code.

(b) Subject to subsections (c) and (d) of this section, the Agency shall reduce:

  (1) an allowance to the extent that it exceeds the dollar limit on an annual benefit established from time to time under Sec. 415(b) of the Internal Revenue Code and the regulations adopted thereunder; and

  (2) the contributions and other additions to any defined contribution plan maintained by the Board of Trustees to the extent that they exceed the limit on annual additions established from time to time under Sec. 415(c) of the Internal Revenue Code and the regulations adopted thereunder.

(c)

  (1) The dollar limit on an annual benefit is the amount set forth in Sec. 415(b) of the Internal Revenue Code, as adjusted by the Commissioner of Internal Revenue under Sec. 415(d) of the Internal Revenue Code as of January 1 of each calendar year.

  (2) The dollar limit for a calendar year applies to a State system's fiscal year ending within that calendar year.

(d)

  (1) Except as provided in paragraph (2) of this subsection, the Agency shall pay a participant whose allowance was reduced under subsection (b) of this section any postretirement adjustment if payment of the postretirement adjustment does not exceed the dollar limit on benefits.

  (2) The postretirement adjustment may not exceed a participant's basic allowance as increased by any postretirement adjustments allowable under the applicable State system.

(e) If an individual participates in any other retirement or pension system that must be aggregated with the State system administered by the Board of Trustees, the individual's annual benefit accrual or annual addition shall first be reduced by the other retirement or pension system to the extent necessary to comply with the requirements of Sec. 415 of the Internal Revenue Code and the regulations adopted thereunder before any reduction is made by the Board of Trustees.

(f)

  (1) This subsection does not apply to an individual who is a member of a State system on or before June 30, 1999.

  (2) Notwithstanding any other provision of law, the Agency may not allow a member to purchase prior service credit other than in accordance with the limitations and conditions set forth in Sec. 415(n) of the Internal Revenue Code.

(g) A member may purchase prior service credit using funds from any fund source that is not specifically prohibited by the Internal Revenue Code.

#### Section 20-209

(a) In conformity with Sec. 401(a)(8) of the Internal Revenue Code, any forfeiture of benefits by a member or former member of the several systems may not be used by the Board of Trustees to pay benefit increases.

(b) Any forfeiture of benefits by a member shall be used to reduce employer contributions.

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Md. Code Ann., State Pers. & Pens. (as displayed at mgaleg.maryland.gov, October 16, 2026)