<section article="gsp" article_name="State Personnel and Pensions" number="30-101" title_number="30" title_name="Optional Retirement Program" subtitle_number="1" subtitle_name="Definitions"> <level label="a"> <text>In this title the following words have the meanings indicated.</text> </level> <level label="b"> <level label="1"> <text>“Annuity contract” means a fixed or variable annuity contract or combination of fixed or variable annuity contracts authorized under § 403(a) or (b) of the Internal Revenue Code.</text> </level> <level label="2"> <text>“Annuity contract” includes a custodial account to be invested in regulated investment company stock as provided in § 401(f) or § 403(b)(7) of the Internal Revenue Code.</text> </level> </level> <level label="c"> <text>“Designated company” means an entity that is designated by the Board of Trustees.</text> </level> <level label="d"> <text>“Eligible employee” means an individual eligible to participate in the program.</text> </level> <level label="e"> <text>“Employing institution” means:</text> <level label="1"> <text>the University System of Maryland;</text> </level> <level label="2"> <text>Morgan State University;</text> </level> <level label="3"> <text>St. Mary’s College;</text> </level> <level label="4"> <text>the Maryland Higher Education Commission with respect to eligible employees of the Commission; and</text> </level> <level label="5"> <text>any community college or regional community college established under Title 16 of the Education Article.</text> </level> </level> <level label="f"> <text>“Participating employee” means an eligible employee who elects to participate in the program.</text> </level> <level label="g"> <text>“Pension system” means the Employees’ Pension System or the Teachers’ Pension System.</text> </level> <level label="h"> <text>“Program” means the optional retirement program established under § 30-201 of this title.</text> </level> <level label="i"> <text>“Retirement system” means the Employees’ Retirement System or the Teachers’ Retirement System.</text> </level> <level label="j"> <text>“Supplemental retirement plans” means plans established pursuant to § 30–401 of this title.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-201" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <level label="a"> <text>There is an optional retirement program in which eligible employees may participate.</text> </level> <level label="b"> <text>Under the program, annuity contracts offered by a designated company that provide retirement and death benefits may be purchased for participating employees.</text> </level> <level label="c"> <level label="1"> <text>The Board of Trustees shall administer the program to the extent provided in this title.</text> </level> <level label="2"> <text>The State Retirement Agency shall carry out the administrative duties of the Board of Trustees.</text> </level> </level> <level label="d"> <text>The program shall be offered by each employing institution.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-202" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <level label="a"> <text>The Board of Trustees may designate not more than five companies from which annuity contracts are to be purchased under the program.</text> </level> <level label="b"> <text>The Board of Trustees shall approve the form and contents of annuity contracts to be offered by a company that is designated by the Board of Trustees under subsection (a) of this section.</text> </level> <level label="c"> <text>In making the designation and giving approval under this section, the Board of Trustees shall consider:</text> <level label="1"> <text>the nature and extent of the rights and benefits to be provided by the annuity contracts for participating employees and their beneficiaries;</text> </level> <level label="2"> <text>the relation of those rights and benefits to the amount of contributions to be made;</text> </level> <level label="3"> <text>the suitability of the rights and benefits to the needs of the participating employees and the interests of the employing institutions in the recruitment and retention of participating employees;</text> </level> <level label="4"> <text>the ability of the company to provide for suitable rights and benefits under the annuity contracts;</text> </level> <level label="5"> <text>the selection of annuity contracts offered by the company;</text> </level> <level label="6"> <text>the financial stability of the company and whether the company meets minimum financial criteria, if any, including a minimum net worth requirement, if any, established by the Board of Trustees; and</text> </level> <level label="7"> <text>the effect of any fees, commissions, or other charges imposed or collected in connection with an annuity contract.</text> </level> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-203" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <text>The Board of Trustees shall adopt and maintain a written plan document for the program and may adopt regulations that it deems necessary to carry out this title.</text> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-204" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <text>The Board of Trustees is not responsible for:</text> <level label="1"> <text>retirement counseling with respect to the program;</text> </level> <level label="2"> <text>preparing or disseminating information with respect to an annuity contract offered by a designated company; or</text> </level> <level label="3"> <text>enrolling, terminating, or retiring a participating employee.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-205" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <level label="a"> <text>Under the program, the State and the participating employees shall contribute, to the extent required, toward the purchase of annuity contracts.</text> </level> <level label="b"> <text>A participating employee may elect to make contributions to no more than two designated companies under the program for the same payroll period, if the Board of Trustees determines that the election of more than one designated company is administratively feasible.</text> </level> <level label="c"> <level label="1"> <text>On behalf of each participating employee, the State shall contribute 7.25% of the participating employee’s annual earnable compensation.</text> </level> <level label="2"> <text>If a participating employee’s compensation is paid from special or federal funds or both, the State’s contribution to the program shall be paid from those funds.</text> </level> </level> <level label="d"> <text>The Central Payroll Bureau shall pay contributions to the appropriate designated company for the benefit of each participating employee.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-206" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <text>In accordance with § 403(b) of the Internal Revenue Code, a participating employee’s rights to benefits under an annuity contract purchased under the program shall be fully vested and nonforfeitable. </text> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-207" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <text>Benefits under the program:</text> <level label="1"> <text>shall be payable to participating employees or their beneficiaries in accordance with the terms of the annuity contracts; and</text> </level> <level label="2"> <text>are not payable by the State or governing board of an employing institution.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-208" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <level label="a"> <text>Every 3 years the Board of Trustees shall review the performance, form, and contents of the annuity contracts offered under the program.</text> </level> <level label="b"> <text>After a review under subsection (a) of this section, the Board of Trustees may:</text> <level label="1"> <text>eliminate a designated company from participation in the program; or</text> </level> <level label="2"> <text>withdraw approval for a type of annuity contract offered by a designated company under the program.</text> </level> </level> <level label="c"> <level label="1"> <text>If a designated company is eliminated from the program or approval for a type of annuity contract is withdrawn, the Board of Trustees:</text> <level label="i"> <text>to the extent permitted under an annuity contract, may direct the transfer of existing balances of participating employees to a new annuity contract; and</text> </level> <level label="ii"> <text>shall give participating employees an opportunity to select an annuity contract with a designated company for future contributions and existing balances subject to transfer under the program, in accordance with item (i) of this paragraph.</text> </level> </level> <level label="2"> <text>If a participating employee does not make a selection under paragraph (1)(ii) of this subsection within a period specified by the Board of Trustees, the participating employee shall be deemed to have elected for future contributions and existing balances subject to transfer an annuity contract and a designated company specified by the Board of Trustees.</text> </level> </level> <level label="d"> <text>All eligible employees shall have access to the information compiled for the purpose of conducting the review required under this section and shall be notified of the availability of the information by the Board of Trustees.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-209" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <level label="a"> <text>There is an expense fund for the program to which shall be credited and from which shall be paid all money provided in the State budget to pay the administrative and operational expenses of the program.</text> </level> <level label="b"> <level label="1"> <text>Each year, the Board of Trustees shall estimate the amount of money required to provide for the administrative and operational expenses of the program for the subsequent fiscal year.</text> </level> <level label="2"> <text>The amount determined in accordance with paragraph (1) of this subsection shall be collected from the designated companies on an equal basis and credited to the expense fund, as determined by the Board of Trustees.</text> </level> </level> <level label="c"> <text>The costs incurred by the Board of Trustees in selecting companies and types of annuity contracts to be offered under the program shall be recovered by assessing on an equal basis the companies designated by the Board of Trustees under § 30-202(a) of this subtitle and crediting those amounts to the expense fund.</text> </level> <level label="d"> <text>Any unexpended funds remaining in the expense fund at the end of the fiscal year shall be held by the Board of Trustees for the exclusive purpose of defraying administrative costs of the program in subsequent years and may not revert to the General Fund of the State.</text> </level> <level label="e"> <text>The Board of Trustees may invest and reinvest the expense fund as the Board of Trustees determines.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-210" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <text>With respect to a participating employee who is employed by an employing institution or an institution over which the employing institution has administrative authority, the employing institution shall administer the participating employee’s enrollment, termination, or retirement under the program.</text> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-210.1" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <level label="a"> <text>In this section, “covered individual” means an employee of an employing institution with discretionary authority over the management or administration of any of the supplemental retirement plans or the management or disposition of the assets of any of the supplemental retirement plans.</text> </level> <level label="b"> <text>Subject to the provisions of this section, the State shall indemnify a covered individual who is, or is threatened to be made, a party to an action or proceeding, including an administrative or investigative proceeding, by reason of the covered individual’s service as an employee of an employing institution with discretionary authority over the management or administration of any of the supplemental retirement plans or the management or disposition of the assets of any of the supplemental retirement plans.</text> </level> <level label="c"> <level label="1"> <text>In this subsection, “expenses” include:</text> <level label="i"> <text>reasonable attorney’s fees;</text> </level> <level label="ii"> <text>judgments;</text> </level> <level label="iii"> <text>fines; and</text> </level> <level label="iv"> <text>other expenses that were actually and reasonably incurred by the individual in connection with the action or proceeding.</text> </level> </level> <level label="2"> <text>With respect to a civil, administrative, or investigative action or proceeding, the State shall indemnify a covered individual for the expenses of the action or proceeding if the covered individual acted:</text> <level label="i"> <text>in good faith; and</text> </level> <level label="ii"> <text>in a manner the covered individual reasonably believed to be in or not opposed to the best interest of the supplemental retirement plans.</text> </level> </level> <level label="3"> <text>With respect to a criminal action or proceeding, the State shall indemnify a covered individual for the expenses of the action or proceeding if the covered individual:</text> <level label="i"> <text>acted in good faith;</text> </level> <level label="ii"> <text>acted in a manner the covered individual reasonably believed to be in or not opposed to the best interest of the supplemental retirement plans; and</text> </level> <level label="iii"> <text>did not have reasonable cause to believe that the covered individual’s conduct was unlawful.</text> </level> </level> </level> <level label="d"> <text>Any termination of an action or proceeding does not, of itself, create a presumption that the covered individual did not meet the standards for indemnification described in subsection (b)(2) and (3) of this section.</text> </level> <level label="e"> <text>The State may not indemnify:</text> <level label="1"> <text>a covered individual with respect to an action or proceeding as to which the covered individual was held liable for gross negligence or willful misconduct in the performance of the covered individual’s duty to the supplemental retirement plans; or</text> </level> <level label="2"> <text>an independent contractor furnishing services to the supplemental retirement plans.</text> </level> </level> <level label="f"> <level label="1"> <text>The State shall provide insurance for a covered individual eligible for indemnification under this section.</text> </level> <level label="2"> <text>For the purpose of paragraph (1) of this subsection, the State may provide self-insurance under terms and conditions satisfactory to the State Treasurer.</text> </level> <level label="3"> <text>A covered individual 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.</text> </level> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-211" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <level label="a"> <text>Before enrolling a participating employee, each designated company shall provide to eligible employees, the Board of Trustees, and the employing institutions any information requested, including a full disclosure of the entire compensation provided to the senior executives of the designated company, and any information requested regarding the designated company or the annuity contracts offered by the designated company.</text> </level> <level label="b"> <text>Each designated company shall provide and pay for all administrative, informational, and counseling services with respect to the annuity contracts offered by the designated company.</text> </level> <level label="c"> <text>Each designated company shall cooperate with the employing institution in connection with any concerns that relate to enrollment, termination, or retirement of a participating employee.</text> </level> <level label="d"> <text>Each designated company shall disclose to the Board of Trustees all fees, commissions, or other charges the designated company imposes or collects with respect to an annuity contract.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-212" title_number="30" title_name="Optional Retirement Program" subtitle_number="2" subtitle_name="Optional Retirement Program"> <text>A designated company or a company authorized to provide supplemental retirement accounts under § 30–401 of this title shall hold harmless and indemnify the State, the Board of Trustees, employing institutions, and the officers, agents, and employees of the State, the Board of Trustees, and employing institutions from any claims or demands arising from any act or omission on the part of the designated company or a company authorized to provide supplemental retirement accounts under § 30–401 of this title or its officers, agents, or employees, including any claim or demand for payment of benefits or damages arising from the formation, execution, performance, or termination of an annuity contract.</text> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-301" title_number="30" title_name="Optional Retirement Program" subtitle_number="3" subtitle_name="Participation"> <level label="a"> <text>An individual is eligible to participate in the program only if the individual:</text> <level label="1"> <text>is eligible for membership in a retirement system or a pension system;</text> </level> <level label="2"> <text>has not previously participated in a State system as an employee of an employing institution or any other unit of State government; and</text> </level> <level label="3"> <text>is:</text> <level label="i"> <text>a member of the faculty of an employing institution;</text> </level> <level label="ii"> <text>a professional employee at a community college or regional community college established under Title 16 of the Education Article;</text> </level> <level label="iii"> <text>an employee of the University System of Maryland who is in a position designated as exempt under a policy adopted by the University System of Maryland Board of Regents;</text> </level> <level label="iv"> <text>an employee of Morgan State University who is in a position designated as executive or professional administrative by the Board of Regents of Morgan State University;</text> </level> <level label="v"> <text>an employee of St. Mary’s College of Maryland who is in a position determined by the Board of Trustees of the College to be an exempt position; or</text> </level> <level label="vi"> <text>an employee of the Maryland Higher Education Commission who is in a position determined by the Secretary of Higher Education to be a professional position.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>This subsection applies to an individual who:</text> <level label="i"> <text>on August 22, 2004, was eligible to participate in the program; and</text> </level> <level label="ii"> <text>is in a position that, as of August 23, 2004, was reclassified by the University System of Maryland Board of Regents or the Board of Regents of Morgan State University and would no longer be eligible for participation in the program under subsection (a) of this section.</text> </level> </level> <level label="2"> <text>An individual described under paragraph (1) of this subsection shall continue to participate in the program if the individual:</text> <level label="i"> <text>would otherwise be eligible for membership in a system under the State Retirement and Pension System; and</text> </level> <level label="ii"> <text>is employed by an employing institution.</text> </level> </level> </level> <level label="c"> <level label="1"> <text>This subsection applies to an individual who:</text> <level label="i"> <text>is in a position that was eligible to participate in the program but was reclassified by the governing board of the individual’s employing institution or the Secretary of Higher Education to a position that would no longer be eligible for participation in the program under subsection (a) of this section; and</text> </level> <level label="ii"> <text>was a participant in the program on the date immediately preceding the reclassification.</text> </level> </level> <level label="2"> <text>An individual described under paragraph (1) of this subsection shall continue to participate in the program if the individual:</text> <level label="i"> <text>would otherwise be eligible for membership in a system under the State Retirement and Pension System; and</text> </level> <level label="ii"> <text>is employed by an employing institution.</text> </level> </level> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-302" title_number="30" title_name="Optional Retirement Program" subtitle_number="3" subtitle_name="Participation"> <level label="a"> <text>An election to participate in the program shall be made by an eligible employee at commencement of employment.</text> </level> <level label="b"> <text>An eligible employee’s election to participate in the program is a one–time irrevocable election.</text> </level> <level label="c"> <text>An individual who previously participated in a State system as an employee of an employing institution or any other unit of State government may not elect to participate in the program.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-303" title_number="30" title_name="Optional Retirement Program" subtitle_number="3" subtitle_name="Participation"> <level label="a"> <text>An eligible employee shall elect to:</text> <level label="1"> <text>join a pension or retirement system in accordance with the provisions of this Division II applicable to that system; or</text> </level> <level label="2"> <text>participate in the program.</text> </level> </level> <level label="b"> <text>An eligible employee shall:</text> <level label="1"> <text>make an election under this section in writing; and</text> </level> <level label="2"> <text>file the election with the Board of Trustees and the employing institution at commencement of employment.</text> </level> </level> <level label="c"> <text>An eligible employee’s election under this section is a one–time, irrevocable election.</text> </level> <level label="d"> <text>The effective date of the election shall be the day of commencement of employment.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-304" title_number="30" title_name="Optional Retirement Program" subtitle_number="3" subtitle_name="Participation"> <text>Unless an eligible employee transferred to a pension system on or before July 1, 1981, the eligible employee may not elect to participate in the program after transferring to a pension system.</text> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-305" title_number="30" title_name="Optional Retirement Program" subtitle_number="3" subtitle_name="Participation"> <level label="a"> <text>This section applies only to a State employee who is appointed, promoted, transferred, or reclassified to a position in which an employee would be eligible to participate in the program.</text> </level> <level label="b"> <text>A State employee described in subsection (a) of this section may not elect to participate in the program.</text> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-306" title_number="30" title_name="Optional Retirement Program" subtitle_number="3" subtitle_name="Participation"> <text>An election of the program by an eligible employee is only effective when the election is accompanied by an appropriate application, if required, for the issuance of an annuity contract under the program.</text> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-307" title_number="30" title_name="Optional Retirement Program" subtitle_number="3" subtitle_name="Participation"> <level label="a"> <level label="1"> <text>This subsection applies to an election to participate in the program made on or before June 30, 2017.</text> </level> <level label="2"> <text>Except as otherwise provided in this section, an election to participate in the program is a waiver of all rights and benefits provided by the retirement or pension system in which the participating employee was a member on the effective date of the election.</text> </level> <level label="3"> <text>For the purpose of determining eligibility for immediate vested rights or benefits in a retirement system or pension system, an eligible employee who is a member of that State system when the employee elects to participate in the program is deemed to have separated from employment on the effective date of the election.</text> </level> <level label="4"> <text>The Board of Trustees may only compute retirement system or pension system benefits on the basis of years of creditable service as a member of that State system.</text> </level> <level label="5"> <level label="i"> <text>This paragraph applies only to a participating employee whose last employer prior to joining the program was a participating employer that does not participate in the employer pick–up program as defined in § 414(h)(2) of the Internal Revenue Code.</text> </level> <level label="ii"> <text>A participating employee may withdraw any accumulated contributions in the annuity savings fund on or after the effective date of the participating employee’s election to join the program.</text> </level> <level label="iii"> <text>If a participating employee withdraws the accumulated contributions, the participating employee forfeits any right to a benefit in the State system from which the accumulated contributions were withdrawn.</text> </level> </level> </level> <level label="b"> <level label="1"> <text>A participating employee is ineligible for membership in a retirement system or pension system while the participating employee is employed in any eligible position by any employing institution.</text> </level> <level label="2"> <text>A participating employee who is subsequently appointed, promoted, or transferred to another position that is eligible for membership in a State system but is not eligible for participation in the program shall participate in a State system with respect to that position as a condition of employment.</text> </level> </level> </section> <section article="gsp" article_name="State Personnel and Pensions" number="30-401" title_number="30" title_name="Optional Retirement Program" subtitle_number="4" subtitle_name="Supplemental Retirement Plans"> <level label="a"> <text>An employing institution may:</text> <level label="1"> <text>establish supplemental retirement plans that provide supplemental retirement accounts offered by a designated company in accordance with § 401(a), § 403(b), or § 457 of the Internal Revenue Code, or any other provision of federal law that authorizes supplemental retirement accounts; and</text> </level> <level label="2"> <text>authorize its employees or the employees of an institution over which it has administrative authority to participate in one or more of the supplemental retirement plans.</text> </level> </level> <level label="b"> <level label="1"> <text>Except as provided in paragraph (2) of this subsection, if an employing institution authorizes its employees or the employees of an institution over which it has administrative authority to participate in a supplemental retirement plan, the employing institution shall select one or more of the designated companies under § 30–202 of this title that may offer supplemental retirement accounts to those employees and shall administer the participation of those employees in the supplemental retirement plan.</text> </level> <level label="2"> <text>With respect to a community or regional college established under Title 16 of the Education Article, other than a community college established under Title 16, Subtitle 5 of the Education Article, if an employing institution authorizes its employees or the employees of an institution over which it has administrative authority to participate in a supplemental retirement plan, the employing institution shall select one or more companies that may offer supplemental retirement accounts to those employees and shall administer the participation of those employees in the supplemental retirement plan.</text> </level> </level> <level label="c"> <text>Contributions authorized under this section to a supplemental retirement account on behalf of an employee may be made by payroll deduction, a reduction in salary, deferral in compensation in accordance with § 403(b), § 457, or § 414(h) of the Internal Revenue Code, or as otherwise permitted by the Internal Revenue Code and authorized by the employing institution.</text> </level> <level label="d"> <text>Assets of the supplemental retirement plans may be deposited and invested in accordance with the investment elections allowed under the supplemental retirement plans notwithstanding any other law limiting the types of investments that may be made with State funds or imposing conditions on the deposit of State funds.</text> </level> <level label="e"> <text>An employee of an employing institution with discretionary authority over the management or administration of any of the supplemental retirement plans or the management or disposition of the assets of any of the supplemental retirement plans is entitled to indemnification and insurance as provided under § 30–210.1 of this title.</text> </level> </section>