State Personnel and Pensions (GSP) — Title 21. State Retirement and Pension System

the contributory plan, established on July 1, 1969; and

the noncontributory plan, established on April 7, 1904;

the Secretary of Budget and Management, ex officio, who may appoint a deputy secretary as designee;

the State Comptroller, ex officio, who may appoint a deputy comptroller as designee;

the State Treasurer, ex officio, who may appoint a deputy treasurer as designee; and

12 trustees elected or appointed as follows:

The trustee who represents the interests of participating subdivisions in the Employees’ Pension System and the Employees’ Retirement System shall be appointed by the Governor.

The trustees who represent the public shall be appointed by the Governor with the advice and consent of the Senate.

The trustee who represents the interests of county governments shall be appointed by the Governor and may be from a list submitted to the Governor by the Maryland Association of Counties.

Within 10 days after the appointment or election of an individual as a trustee, the individual shall take and subscribe to an oath of office that, so far as it devolves on the individual, as trustee the individual:

The officer before whom the individual takes the oath shall:

A trustee who is a member but not a retiree of the Correctional Officers’ Retirement System, the Employees’ Pension System, the Employees’ Retirement System, the Judges’ Retirement System, the Legislative Pension Plan, the Local Fire and Police System, the Law Enforcement Officers’ Pension Plan, the Teachers’ Pension System, or the Teachers’ Retirement System at the time of election of the trustee may complete the term of office even if, during the term, the trustee:

A vacancy in the office of a trustee shall be filled for the unexpired term in the same manner as the office was previously filled.

At the end of a term, a trustee continues to serve until a successor is appointed or elected.

A trustee who is appointed after a term has begun serves only for the rest of the term and until a successor is selected and qualifies.

Except as provided in paragraph (2) of this subsection, each trustee shall attend at least 80% of the monthly Board of Trustees meetings held during a 1–year period beginning January 1.

An elected trustee representing employees of any of the several systems shall be given reasonable time during work to attend monthly meetings of the Board of Trustees or committee meetings of the Board of Trustees.

the transaction of any business;

the exercise of any power; or

the performance of any duty authorized or imposed by law.

may not receive compensation from the several systems for service as a trustee; but

is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget.

The responsibility for the management, general administration, and proper operation of the several systems is vested in the Board of Trustees.

The Board of Trustees is not responsible for:

the administration of the several systems;

the management of the assets of the several systems;

the transaction of its business;

the imposition of an administrative fee on any participating employer that fails to provide the information required by the State Retirement Agency to properly enroll eligible employees in the several systems;

notwithstanding the provisions of § 9–602 of the Criminal Law Article, the management of monitoring and recording, for training and quality control purposes:

rules regarding the retention of recordings made in accordance with paragraph (5) of this subsection, including a prohibition on the retention of recordings for longer than 10 years.

Subject to the approval of the Board of Public Works, the Board of Trustees may adopt regulations for the administration of funds of a pension or retirement system established under §§ 7-206 and 7-603 of the Transportation Article.

The Maryland Transit Administration shall pay all financing costs of a pension or retirement system established under §§ 7-206 and 7-603 of the Transportation Article, including the pro rata share of the administrative costs that the Board of Trustees incurs.

As the Board of Trustees considers necessary to properly administer and enforce this Division II or regulations adopted under this Division II, the Board of Trustees may:

The Board of Trustees, or any trustee on the Board of Trustees, may administer an oath to a witness who appears before the Board of Trustees.

In addition to any hearing that Title 10 of the State Government Article requires, the Board of Trustees may hold hearings as necessary to perform its duties.

The hearings are governed by regulations of the Board of Trustees.

The Board of Trustees is not bound by technical rules of evidence.

If the Board of Trustees approves an application for disability retirement on behalf of a State police officer under § 2-415(b) of the Public Safety Article, the Board of Trustees shall hold a hearing unless the officer waives the hearing in writing.

publish a consolidated report that includes:

provide each member and retiree with a statement on the State Retirement Agency’s website that:

the member’s vested benefits or the benefits the member will be entitled to on vesting;

the date when the member was or will be vested; and

the present value of any annuity.

correct the error; and

to the extent practicable, adjust the payment to the retiree or beneficiary to provide the actuarial equivalent to which the retiree or beneficiary is correctly entitled.

Notwithstanding § 21-502 of this title, the Board of Trustees may recover the amount of any improper payment.

After due notice, if a person who receives an improper payment fails to repay the money owed, the Board of Trustees may:

Subject to the approval of the Board of Trustees, the Executive Director of the State Retirement Agency shall:

specify by resolution the number of members of the Investment Committee; and

except as provided in subsection (b)(2) of this section, appoint annually the members of the Investment Committee from the members of the Board of Trustees.

a representative of each of:

three representatives from the public appointed by the Board of Trustees with the approval of the Board of Public Works for staggered 3-year terms who:

set additional qualifications for public members; and

adopt regulations on ethical standards and conflicts of interest for public members.

the investment programs;

compliance of the investment programs with the policies of the Board of Trustees; and

bonding for employees of the State Retirement Agency in the form and amount required by law.

Subject to subsections (d) and (e) of this section, the Board of Trustees shall adopt an investment policy manual that details:

The Investment Committee shall:

In consultation with the Governor’s Office of Small, Minority, and Women Business Affairs and the Investment Committee, the Board of Trustees shall develop guidelines to assist the Investment Committee in identifying and evaluating qualified minority business enterprises in order to help the State Retirement Agency achieve the objective for greater use of minority business enterprises for brokerage and investment management services.

On or before November 1 each year, the Investment Committee shall submit a report to the Board of Trustees, the Governor’s Office of Small, Minority, and Women Business Affairs and, subject to § 2–1257 of the State Government Article, the General Assembly on:

Consistent with its fiduciary duties, the Board of Trustees shall include policies in the investment policy manual adopted under subsection (c) of this section regarding the management of risk, including the management of climate risks in accordance with § 21–116.1 of this subtitle, in the investment of system assets, and shall address:

To the extent practicable, the State Retirement Agency shall request all information necessary from managers, brokers, or other entities to carry out the policies of the Board of Trustees with respect to an assessment conducted in accordance with this subsection.

The Board of Trustees, or any other fiduciary of the several systems as defined in § 21–201(b) of this title, may not be held liable for any actions taken or decisions made in good faith for the purpose of complying with or executing this subsection.

Nothing in this subsection shall require the Board of Trustees to take action as described in this section unless the Board of Trustees determines, in good faith, that the action is consistent with the fiduciary responsibilities of the Board of Trustees as described in Subtitle 2 of this title.

a review of the total investment portfolio of the several systems to determine the level of climate risk across industry sectors and asset classes that prioritize high–impact sectors responsible for greenhouse gas emissions;

identifying investment opportunities in:

establishing a process for regular reassessment of the potential systemic risks of the impact of climate change on the assets of the several systems; and

utilization of the best data and practices available in current science, investment strategies, and climate risk analyses.

shall review and manage the investments of the several systems; and

may choose to invest or divest in funds within the several systems.

identify environmentally sustainable investment opportunities to support a low–carbon economy;

develop transition assessments relating to investments in high–impact sectors;

evaluate whether internal and external investment managers are taking steps to transition to a more sustainable business model aligned with a low–carbon economy; and

work with managers, data providers, index providers, or consultants to identify, analyze, define, and prioritize asset–class specific metrics and minimum standards to evaluate transition readiness and resiliency for companies in high–impact sectors.

direct engagement with managers, brokers, or other entities;

proxy voting;

a periodic review and assessment of the effectiveness of procedures used for direct engagement and proxy voting; and

to the extent practicable, the establishment of an advisory panel of experts in the analysis of climate change risk to provide the most current science and data available.

The Board of Trustees shall appoint the Executive Director of the State Retirement Agency.

The Executive Director serves at the pleasure of the Board of Trustees.

be in charge of the State Retirement Agency;

compile annually a comprehensive budget for submission to the Board of Trustees; and

have the duties and functions that the Board of Trustees may delegate.

Except for employees described in paragraph (3) of this subsection, the employees are skilled service or professional service employees subject to the provisions of this article that govern skilled service or professional service employees.

An employee is in the executive service, management service, or is a special appointment in the State Personnel Management System if:

A document that must be executed by or for the Board of Trustees shall be signed:

If a countersignature is required, with the approval of the Chairman of the Board of Trustees, the Executive Director shall designate those employees of the State Retirement Agency who may sign.

Notwithstanding any other provision of law, on the recommendation of the Executive Director and the Investment Committee, the Board of Trustees shall determine the qualifications and appointment, as well as compensation and leave, for the Chief Investment Officer who shall be the head of the Investment Division.

The Compensation and Staffing Committee shall assist the Executive Director and the Investment Committee in recommending qualifications, compensation, and leave for the Chief Investment Officer, including any salary changes for the Chief Investment Officer.

In making recommendations, determinations, and appointments under this section, the Board of Trustees, Executive Director, Investment Committee, and Compensation and Staffing Committee shall consider the comparative qualifications, compensation, and leave of employees serving in similar positions and discharging similar duties at comparable public pension funds.

In addition to the Board of Trustees setting the compensation of the Chief Investment Officer under subsection (a) of this section, the Board of Trustees may also award financial incentives to the Chief Investment Officer in accordance with this subsection and subsection (d) of this section.

The criteria under paragraph (1) of this subsection shall include:

The Chief Investment Officer may not participate in any deliberations regarding the establishment of criteria under this subsection.

The criteria established under this subsection shall be included in the investment policy manual.

On or before September 1 of each year, the Board of Trustees shall submit to the Joint Committee on Pensions, in accordance with § 2–1257 of the State Government Article, a copy of the most recent criteria established under this section and any financial incentives that were awarded for the previous fiscal year to the Chief Investment Officer.

The Executive Director shall employ a Director of Diversity, Equity, and Inclusion of the State Retirement Agency.

The Director of Diversity, Equity, and Inclusion shall report directly to the Executive Director.

identify and minimize barriers to open and equitable processes by ensuring the State Retirement Agency provides access and opportunities to underrepresented groups;

engage with the Board of Trustees, staff, and external entities to promote and support diversity of participation and leadership;

provide assistance as necessary to the Investment Division established under § 21–122 of this subtitle;

provide advice and reports to the Board of Trustees on topics including diversity, equity, and inclusion; and

have the duties and functions that the Executive Director or the Board of Trustees may delegate.

prescribe the format of the report; and

require any information it considers appropriate.

the State Retirement Agency and participating employer shall correct their records; and

There is an Investment Division in the State Retirement Agency.

Subject to subsection (f) of this section, the Board of Trustees shall determine the qualifications and compensation for positions within the Investment Division.

The Board of Trustees:

On or before October 1, 2012, and each October 1 thereafter, the Board of Trustees shall report to the Senate Budget and Taxation Committee, the House Appropriations Committee, and the Joint Committee on Pensions, in accordance with § 2–1257 of the State Government Article on:

Quarterly, the Investment Division shall submit to the Board of Trustees a report about the commissions that the State Retirement Agency pays on investments.

The report shall detail:

may hire external investment managers to invest the assets of the several systems;

may select and invest in specific investment vehicles, including limited partnerships, private equity fund investments, and private real estate fund investments; and

may terminate the appointment of an external investment manager.

On or before October 1, January 1, March 1, and July 1 each year, the Board of Trustees shall submit to the Senate Budget and Taxation Committee, the House Appropriations Committee, and the Joint Committee on Pensions, in accordance with § 2–1257 of the State Government Article, a report on system investment returns for the preceding fiscal quarter, including:

There is a Compensation and Staffing Committee of the Board of Trustees.

The Committee shall make recommendations to the Board of Trustees regarding:

There is a governance program within the Investment Division of the State Retirement Agency established in accordance with the policies of the Board of Trustees.

The responsibilities of the individual employed under paragraph (2)(i) of this subsection shall be consistent with the fiduciary responsibilities and shall include:

is deemed the owner of all the assets of the several systems; but

may delegate some or all incidents of ownership to the State Retirement Agency to administer the investment portfolios of the several systems.

The Board of Trustees may invest assets of the several systems subject to the conditions that it imposes.

The Board of Trustees shall include the conditions that it adopts under paragraph (1) of this subsection in the investment policy manual required by § 21–116(c) of this subtitle.

This subsection applies only to the execution of:

An instrument must be executed by any two of:

The Board of Trustees may commingle assets of the several systems, including the Postretirement Health Benefits Trust Fund, if the Board of Trustees keeps separate sets of records for each State system or group of State systems listed in paragraph (2) of this subsection that show:

The Board of Trustees shall keep records required by paragraph (1) of this subsection for each of the following:

Notwithstanding any other law in force on or after July 1, 1988, unless the law makes specific reference to this subsection, and subject to paragraph (2) of this subsection, the Board of Trustees may keep all analyses, forecasts, negotiations, papers, records, recommendations, and reports closed to public inspection until:

The sale or purchase of real estate shall be subject to the approval of a majority of the Comptroller, Treasurer, and Secretary of Budget and Management, in their capacity as members of the Board of Trustees.

In this subtitle the following words have the meanings indicated.

“Company” means any corporation, utility, partnership, joint venture, franchisor, franchisee, trust, entity investment vehicle, financial institution, or a wholly owned subsidiary of any of these entities.

“Divestment action” means selling, redeeming, transferring, exchanging, otherwise disposing of, and refraining from further investment in certain investments.

“Doing business in Iran” means the company has, with actual knowledge, on or after August 5, 1996, made an investment of $20,000,000 or more, or any combination of investments of at least $10,000,000 each, which in the aggregate equals or exceeds $20,000,000 in any 12–month period, and which directly or significantly contributes to the enhancement of Iran’s ability to develop the petroleum or natural gas resources of Iran.

“Doing business in Sudan” means engaging in commerce in Sudan by maintaining or leasing equipment, facilities, personnel, or other apparatus of business or commerce in oil–related activities, mineral extraction activities, power production activities, or production of military equipment of Sudan.

“Eligible accounts” means actively managed separate accounts containing funds of the several systems.

“Government of Iran” means the government of Iran, its instrumentalities, and companies owned or controlled by the government of Iran.

“Investment” means the commitment of funds or other assets to a company, including:

“Iran” means the Islamic Republic of Iran.

Except as otherwise provided in this section, and consistent with the fiduciary duties of the Board of Trustees under Subtitle 2 of this title and all other applicable law, the Board of Trustees shall, within 30 days of its review under subsection (b) of this section, provide written notice and opportunity to comment to a company in which eligible accounts are invested and that has been identified as doing business in Iran or Sudan.

Any notice provided by the Board of Trustees under paragraph (1) of this subsection shall state that the company shall be subject to divestment action by the Board of Trustees unless the company provides written comments within 90 days to the Board of Trustees:

If the company demonstrates to the satisfaction of the Board of Trustees that it is not doing business in Iran or Sudan, the Board of Trustees may not take any divestment action against the company.

shall take divestment action in eligible accounts with regard to current investments:

may not make any new investments from net new funds in an eligible account in any company that is doing business in Iran or Sudan as determined in accordance with the procedures set forth in subsection (c) of this section.

that the United States government affirmatively declares to be excluded from its federal sanctions regime relating to Iran or Sudan; and

whose divestment cannot be executed for fair market value or greater.

a summary of correspondence with companies engaged by the Board of Trustees under this section;

all divestment actions taken by the Board of Trustees in accordance with this section;

a list of companies doing business in Iran or Sudan which the Board of Trustees has determined to be ineligible for investments of net new funds under subsection (d)(2) of this section; and

other developments relevant to investment in companies doing business in Iran or Sudan.

In this section the following words have the meanings indicated.

“Private equity” means an asset class consisting of equity securities and debt in operating companies that are not publicly traded on a stock exchange.

“Venture capital” means an investment of capital to a business at any stage of its development before the business makes a public offering of stock.

is domiciled in the State;

operates in the State; or

is reasonably expected to invest in entities that are in the State.

The Board of Trustees may enter into an agreement with the Maryland Technology Development Corporation or another entity to make and manage investments on behalf of the Board of Trustees in private equity and venture capital in the State with the amount of money appropriated to the system, the State Retirement Agency, or the accumulation funds of the several systems that:

If the Board of Trustees does not enter into an agreement with the Maryland Technology Development Corporation or another entity in accordance with paragraph (1) of this subsection, the Board of Trustees shall develop a process that authorizes the Maryland Technology Development Corporation or another entity to provide recommendations regarding investments in private equity and venture capital in the State with respect to the amount described under paragraph (1) of this subsection.

The investments or recommendations made in accordance with this section shall include a goal of investments or recommendations for the investment of 50% of the funds in commercialization of technology sponsored or created by a university in the State.

An entity providing services to the Board of Trustees in accordance with paragraph (1) or (2) of this subsection shall be subject to the standards of care under § 21–203 of this title and the prohibited transactions under § 21–205 of this title, with respect to the services provided.

On or before December 31 each year, the Board of Trustees shall submit a report to the Senate Budget and Taxation Committee, the House Appropriations Committee, and the Joint Committee on Pensions, in accordance with § 2–1257 of the State Government Article, and subject to § 4–335 of the General Provisions Article, that includes a detailed description of:

On or before December 1 each year, the Maryland Technology Development Corporation or another entity with which the Board of Trustees entered into an agreement under subsection (d)(1) or (2) of this section shall submit a report to the Senate Budget and Taxation Committee, the House Appropriations Committee, and the Joint Committee on Pensions, in accordance with § 2–1257 of the State Government Article, that, to the extent possible, provides:

In this section the following words have the meanings indicated.

“Company” means any corporation, utility, partnership, joint venture, franchisor, franchisee, trust, entity investment vehicle, financial institution, or a wholly owned subsidiary of any of these entities.

“Divestment action” means selling, redeeming, transferring, exchanging, otherwise disposing of, and refraining from further investment in certain investments.

“Eligible accounts” means actively managed separate accounts containing funds of the several systems.

“Investment” means the commitment of funds or other assets to a company including:

“Russia–restricted investment” means an investment in a company:

shall take divestment action in eligible accounts with regard to current investments:

may not make any new investments from net new funds in an eligible account in any Russia–restricted investment.

that the United States government affirmatively declares to be excluded from its federal sanctions regime relating to Russia; and

whose divestment cannot be executed for fair market value or greater.

all divestment actions taken by the Board of Trustees in accordance with this section;

a list of investments that the Board of Trustees has determined to be ineligible for investments of net new funds under subsection (c)(2) of this section; and

other developments relevant to Russia–restricted investments.

The State Treasurer is the custodian of:

The State Retirement Agency shall make all payments from the accumulation, annuity savings, and expense funds of the several systems in accordance with regulations that the Board of Trustees adopts with the approval of the State Treasurer.

The State Treasurer may make arrangements with one or more duly qualified banks or trust companies in this State, organized under the laws of this State or of the United States, for:

The State Treasurer:

The Board of Trustees shall keep on file any safekeeping receipt that the State Treasurer delivers.

Subject to paragraph (2) of this subsection, to make disbursements, the State Treasurer may keep cash on deposit in one or more duly qualified banks or trust companies in this State that are organized under the laws of this State or of the United States.

The State Treasurer may not:

give technical advice to the Board of Trustees on the operation of the funds of the several systems; and

perform other related duties that the Board of Trustees requires.

On the basis of actuarial assumptions that the Board of Trustees adopts, each year the actuary shall make a valuation of the assets and liabilities of the funds of the several systems and shall recommend the rates of employer contributions to be certified by the Board of Trustees.

For purposes of actuarial valuation, the Board of Trustees may adopt a generally accepted actuarial method for determining the value of the assets held by the several systems.

For general ledger accounting and financial reporting, the Board of Trustees shall use generally accepted accounting principles.

At least once in each 5–year period, the actuary shall make:

The Board of Trustees shall:

Each medical board consists of three members and not more than three alternates.

Each medical board member and alternate shall be a physician who is not eligible to be a member of a State system.

In the absence of a medical board member, an alternate may serve on a medical board.

arrange for and approve all medical examinations required under this Division II;

investigate all essential certificates and statements by or on behalf of a member concerning the application of the member for disability retirement; and

submit written reports to the Board of Trustees, with conclusions and recommendations, on all matters that the Board of Trustees refers to the medical board.

A retiree organization may submit only two requests each year to the Board of Trustees to assist the retiree organization in performing direct mailings to retirees of the several systems who are members of the retiree organization or eligible to become members of the retiree organization.

The direct mailings may not be for the purpose of supporting or opposing any political party, ballot measure, or candidate in any election, including any State general or primary election or any election within the retiree organization.

A retiree organization is solely responsible for the procurement of a mail processing center under this section.

The retiree organization shall provide all printed materials to be mailed and envelopes to a mail processing center.

The retiree organization is responsible for paying all costs for generating mailing labels, inserting materials into envelopes, sealing, labeling, and delivering materials to be mailed to a bulk mail center or post office.

The retiree organization is responsible for all postage costs involved for the direct mailings.

a member of the Board of Trustees;

a member of the Investment Committee;

a member of a committee established by the Board of Trustees as authorized under § 21–108 of this title;

a member of a committee established under § 21–122(g) of this title; or

an employee of the State Retirement Agency who exercises any discretionary authority or control over:

Except as otherwise provided in subsection (c) of this section, in exercising the standards set forth in § 21-203 of this subtitle:

Paragraph (1) of this subsection does not preclude any agreement that allocates specific responsibilities, obligations, or duties among the trustees.

allocate the responsibilities of the fiduciaries among the fiduciaries; and

designate any other person to carry out the responsibilities of a fiduciary.

If the Board of Trustees makes an allocation or designation to a person under subsection (b) of this section, the Board of Trustees is not liable for an act or omission of that person in carrying out the responsibility, except to the extent that the Board of Trustees violates § 21-203 of this subtitle with respect to:

Except as otherwise provided in paragraph (1) of this subsection, a trustee to whom certain responsibilities, obligations, or duties have not been allocated is not liable, either individually or as a trustee, for any loss resulting to the several systems arising from an act or omission of another person to whom the responsibilities, obligations, or duties have been allocated.

is personally liable to the several systems for any losses to the several systems resulting from a breach;

shall restore to the several systems any profits of the fiduciary made through use of assets of the several systems by the fiduciary; and

is subject to any equitable or remedial relief, including removal of the fiduciary, that a court considers appropriate.

before the fiduciary became a fiduciary; or

after the fiduciary ceased to be a fiduciary.

In this subsection, “expenses” include:

With respect to a civil, administrative, or investigative action or proceeding, the State shall indemnify a fiduciary for the expenses of the action or proceeding if the fiduciary acted:

With respect to a criminal action or proceeding, the State shall indemnify a fiduciary for the expenses of the action or proceeding if the fiduciary:

a fiduciary with respect to an action or proceeding as to which the fiduciary was held liable for gross negligence or willful misconduct in the performance of the fiduciary’s duty to the several systems; or

an independent contractor furnishing services to the several systems.

The State shall provide insurance for a fiduciary eligible for indemnification under this section.

For the purpose of paragraph (1) of this subsection, the State may provide self–insurance under terms and conditions satisfactory to the State Treasurer.

A fiduciary may not be required to pay amounts attributable to liability described in this section because the State does not provide adequate insurance coverage or otherwise fails to indemnify in accordance with this section.

Notwithstanding any other law, a person may not serve as a fiduciary if the person has been convicted of:

A person may not knowingly allow another person to serve as a fiduciary in violation of paragraph (1) of this subsection.

the date of judgment of the trial court; or

the date of the final sustaining of judgment on appeal.

Unless a fiduciary is bonded as required by subsection (a) of this section, the fiduciary may not exercise custody or control of any assets of a State system.

A fiduciary may not allow another fiduciary to act in violation of paragraph (1) of this subsection.

The State may satisfy the requirement for a bond under subsection (a) of this section by purchasing an insurance policy.

The State Treasurer, in consultation with the Board of Trustees, shall determine the type and amount of coverage provided by a policy purchased under paragraph (1) of this subsection.

an accumulation fund;

an annuity savings fund; and

an expense fund.

the payment of all allowances and other benefits payable under this Division II;

the creation and maintenance of reserves in the accumulation funds of the several systems; and

the crediting of regular interest to the annuity savings funds of the several systems.

all employer contributions to the State system;

all interest, dividends, and other income derived from the assets of the State system; and

amounts transferred under § 21–311(c) or (d) of this subtitle.

Each year the Board of Trustees shall transfer from the accumulation fund of each State system to each member’s account in the annuity savings fund of that State system regular interest on the account as provided in this Division II.

If a retiree who has retired because of disability is restored to membership, the Board of Trustees shall transfer from the accumulation fund of the appropriate State system to the annuity savings fund of that State system an amount equal to the remaining portion of the retiree’s annuity reserve.

In this section the following words have the meanings indicated.

With respect to local employees, “aggregate annual earnable compensation” means the total annual earnable compensation payable by a local employer to all of its local employees, calculated as of June 30 of the second prior fiscal year before the fiscal year for which the calculation is made under this section, adjusted by any actuarial assumed salary increases that were used in the actuarial valuation prepared under § 21–125(b) of this title for the immediate prior fiscal year.

“Local employee” means a member of the Teachers’ Retirement System or the Teachers’ Pension System who is an employee of a day school in the State under the authority and supervision of a county board of education or the Baltimore City Board of School Commissioners, employed as:

“Local employer” means a county board of education or the Baltimore City Board of School Commissioners.

“State member” does not include a member on whose behalf a participating governmental unit is required to make an employer contribution under § 21–305 or § 21–306 of this subtitle.

“Total employer contribution for local employees” means that portion of the employer contribution calculated under subsection (b) of this section that is attributable to all local employees.

Subject to paragraphs (4) and (5) of this subsection, each fiscal year, on behalf of the State members of each State system, the State shall pay to the appropriate accumulation fund an amount equal to or greater than the sum of the amount, if any, required to be included in the budget bill under § 3–501(c)(2)(ii) of this article and the product of multiplying:

The amount determined under paragraph (1) of this subsection for each State system shall be based on an actuarial determination of the amounts that are required to preserve the integrity of the funds of the several systems using:

For the purpose of making the determinations required under this section:

Except as provided in paragraph (6) of this subsection, the difference between the total employer contribution for local employees and the local share of the total employer contribution for all local employees shall be the obligation of the State.

As part of each actuarial valuation, the actuary shall determine the normal contributions, net of member contributions, on account of the State members of each State system.

For each State system, the normal contribution rate equals the fraction that has:

Beginning July 1, 2023, each year the Board of Trustees shall set contribution rates for each State system that shall amortize:

On recommendation of the system’s actuary, for the purpose of mitigating tail volatility in the annual contribution rate, the Board of Trustees may adjust the period of amortization under paragraph (1)(ii) of this subsection for liabilities or surpluses accrued in any fiscal year.

Each fiscal year, on behalf of its employees who are members of one of the employees’ systems, a participating governmental unit shall pay an amount equal to or greater than the product of multiplying:

Each fiscal year, in addition to the amounts required to be paid under paragraph (1) of this subsection, a participating governmental unit shall pay:

Each fiscal year, a participating governmental unit shall reduce the amounts required to be paid under paragraphs (1) and (2) of this subsection by any annual credit allowed to the participating governmental unit under § 21–305.4(b) of this subtitle.

The amount determined under subsection (b) of this section for the employees’ systems shall be based on an actuarial determination of the amounts that are required to preserve the integrity of the accumulation fund of the employees’ systems, using:

Except as provided in subsection (b)(2)(iii) of this section, for the purpose of making the determinations required under this section, the Employees’ Retirement System and the Employees’ Pension System shall be considered together as one State system.

as its numerator, the sum of the normal contributions determined under this section; and

as its denominator, the aggregate annual earnable compensation of the members of the employees’ systems who are employees of participating governmental units.

experience gains and losses;

the effect of changes in actuarial assumptions; and

the effect of legislation enacted after July 1, 1980.

all unfunded liabilities or surpluses accrued as of June 30, 2016, over 100 years;

all unfunded liabilities or surpluses accrued as of June 30, 2017, over 40 years;

all unfunded liabilities or surpluses accrued as of June 30, 2018, over 35 years;

all unfunded liabilities or surpluses accrued as of June 30, 2019, over 30 years;

all unfunded liabilities or surpluses accrued as of June 30, 2020, over 25 years;

all unfunded liabilities or surpluses accrued as of June 30, 2021, over 22 years;

all unfunded liabilities or surpluses accrued as of June 30, 2022, over 20 years; and

beginning July 1, 2023, any new unfunded liabilities or surpluses that have accrued from July 1 of the preceding fiscal year over the time remaining until June 30, 2041, to reflect:

In this section the following words have the meanings indicated.

“Employees’ systems” means the Employees’ Pension System and the Employees’ Retirement System.

“Special accrued liability” means, as to any participating governmental unit, the liability of the employees’ systems on account of the employees of the participating governmental unit who elect to become members under § 23–204(a) of this article.

the present value, as of the date of approval, of future normal contributions, future accrued liability contributions, future contributions for members of the Employees’ Retirement System required under § 21–305(b)(2)(iii) of this subtitle, future member contributions on behalf of or by members who are employees of the participating governmental unit; and

any cash and securities transferred to the Employees’ Pension System in accordance with § 31–113(e) of this article.

over a period not to exceed 40 years; or

subject to the actuary’s concurrence, by means of annual payments other than level annual payments.

In this section the following words have the meanings indicated.

“Deficit” means, as to any participating governmental unit, the lesser of:

“Employees’ systems” means the Employees’ Pension System and the Employees’ Retirement System.

“Required employer contribution” means the amount payable each fiscal year under § 21-305(b)(1) and (2)(i) and (iii) of this subtitle by a participating governmental unit.

“Surplus” means, as to any participating governmental unit, the amount, as of June 30, 1995, by which the actuarial value of the assets to the credit of the participating governmental unit in the employees’ systems exceeds the present value of the future benefits of the employees of the participating governmental unit who are members of the employees’ systems.

The actuary shall determine the surplus allocable to a participating governmental unit as of June 30, 1995, based on an actuarial valuation.

The surplus of a participating governmental unit may not be less than zero.

The annual credit of a participating governmental unit shall be the amount that is sufficient to amortize over a 25-year term commencing on July 1, 1995, the surplus allocated to a participating governmental unit as of June 30, 1995, by means of an annual credit that increases each year based on the actuarial assumptions adopted by the Board of Trustees on the recommendation of the actuary.

Each fiscal year, a participating governmental unit’s required employer contribution shall be reduced by the annual credit of the participating governmental unit, but not below zero.

The actuary shall determine the deficit allocable to a participating governmental unit as of June 30, 1995, based on an actuarial valuation.

In this section the following words have the meanings indicated.

“Complement of the participant funding ratio” is a ratio equal to 100% minus the participant funding ratio, and may not be less than zero.

“Employees’ systems” means the Employees’ Pension System and the Employees’ Retirement System.

“Noncontributory participating governmental unit” means a participating governmental unit that did not elect to provide its employees with the contributory pension benefit or the Alternate Contributory Pension Selection as provided in § 31–116 of this article.

“Noncontributory system funding ratio” means the ratio determined by the actuary as provided under subsection (e) of this section.

“Participant funding ratio” means the ratio determined under subsection (d) of this section.

“Transition amount” means the amount determined by the actuary as provided under subsection (i) of this section.

On and after the date of a participating governmental unit’s withdrawal from the employees’ systems under § 31–302(1) of this article, the participating governmental unit and its employees are not required to make any further contributions to the employees’ systems for those employees who elect to withdraw from the employees’ systems.

As of the effective date of withdrawal, the participating governmental unit shall continue to make any contributions required under § 21–305(b)(1) and (2) of this subtitle on behalf of those employees who do not elect to withdraw from the employees’ systems.

As of the effective date of withdrawal of a participating governmental unit, the Board of Trustees shall transfer to the administrative board of the local pension system the assets that are allocable to the employees of the participating governmental unit who elect to withdraw from the employees’ systems as determined under either subsection (f) or (g) of this section.

This subsection applies to a participating governmental unit that elected to provide its employees with the contributory pension benefit or the Alternate Contributory Pension Selection as provided in § 31–116 of this article.

As of June 30 of each fiscal year, the actuary shall determine the participant funding ratio for the participating governmental units as provided in this subsection.

The participant funding ratio shall be a fraction that has:

The assets to the credit of the participating governmental units as of the valuation date shall be: