# State Personnel and Pensions (GSP)

## Title 35. Supplemental Retirement Plans

### Subtitle 1. Definitions

#### Section 35-101

(a) In this title the following words have the meanings indicated.

(b) "Board" means the State Board of Trustees of the Maryland State Employees Supplemental Retirement Plans.

(c) "Supplemental retirement plans" means the deferred compensation, tax sheltered annuity, salary reduction savings plans, and any other plans authorized by this title.

#### Section 35-102

(a) The supplemental retirement plans are in addition to any other retirement, pension, or benefit system established by the State.

(b) A deferral of compensation under any of the supplemental retirement plans does not reduce the amount of any retirement, pension, or other benefit provided by law.

### Subtitle 2. Board of Trustees

#### Section 35-201

There is a Board of Trustees of the Maryland State Employees Supplemental Retirement Plans.

#### Section 35-202

(a)

  (1) The Board consists of nine members appointed by the Governor.

  (2) Of the nine members:

    (i) three shall be from any of the following units:

      (1) the Department of Budget and Management;

      (2) the Department of Education;

      (3) the Office of the State Comptroller;

      (4) the Office of the State Treasurer;

      (5) the State Retirement Agency; or

      (6) the Maryland Higher Education Commission;

    (ii) three shall be individuals who are eligible to participate in one of the supplemental retirement plans, at least one of whom shall be an employee described in Sec. 403(b)(1)(A)(ii) of the Internal Revenue Code; and

    (iii) three shall be members of the public who are not eligible to participate in any of the supplemental retirement plans, at least one of whom shall have experience with deferred compensation and salary reduction plans.

(b)

  (1) The term of a member is 4 years.

  (2) The terms of members are staggered as required by the terms provided for members of the Board on October 1, 1994.

  (3) At the end of a term, a member continues to serve until a successor is appointed and qualifies.

  (4) A member who is appointed after a term has begun serves only for the rest of the term and until a successor is appointed and qualifies.

(c) The Governor may remove a member for incompetence or misconduct.

#### Section 35-203

The Governor shall appoint a chairman from among the members of the Board appointed under Sec. 35-202(a)(2)(i) or (ii) of this subtitle.

#### Section 35-204

(a) The Board shall meet at least quarterly at the times and places it determines.

(b) Each member of the Board is entitled to reimbursement for expenses under the Standard State Travel Regulations, as provided in the State budget.

(c)

  (1) The Board may employ a staff in accordance with the State budget.

  (2) The Board may hire consultants, administrators, and other professionals as necessary to help implement, maintain, and administer the supplemental retirement plans.

  (3)

    (i) Except as provided in subparagraph (ii) of this paragraph or otherwise by law, employees of the Board are subject to the provisions of Division I of this article that govern nontemporary employees.

    (ii) Employees of the Board whose labor is predominately intellectual and who hold positions that the Board designates as professional or technical positions involving specialized skill, education, and knowledge are in the executive service, management service, or are special appointments of the skilled service or the professional service in the State Personnel Management System.

  (4)

    (i) Except as provided in paragraph (5) of this subsection, all expenses, including employee costs, incurred to implement, maintain, and administer the supplemental retirement plans shall be paid from the contributions to or the income or assets of the supplemental retirement plans.

    (ii) Each supplemental retirement plan shall pay a proportionate share of the expenses specified in subparagraph (i) of this paragraph.

    (iii) Administrative expenses to implement, maintain, and administer the supplemental retirement plans shall be as provided in the State budget.

  (5) At the request of the Board, and subject to an agreement governing the payment of costs, a unit of State government shall help to implement, maintain, and administer the supplemental retirement plans.

#### Section 35-205

(a) The Board shall:

  (1) implement, maintain, and administer the supplemental retirement plans;

  (2) submit progress and status reports to participants in the supplemental retirement plans; and

  (3) submit an annual report to the Governor and, subject to Sec. 2-1257 of the State Government Article, to the General Assembly.

(b) In case of doubt as to whether an individual is eligible to participate in any of the supplemental retirement plans, the Board shall determine the individual's eligibility.

### Subtitle 3. Fiduciaries and Investments

#### Section 35-301

(a) In this section, "fiduciary" means a person with discretionary authority or control over:

  (1) the management or administration of any of the supplemental retirement plans; or

  (2) the management or disposition of the assets of any of the supplemental retirement plans.

(b) A fiduciary is subject to the duties and responsibilities imposed on fiduciaries by Title 21, Subtitle 2 of this article.

(c) A fiduciary is entitled to indemnification and insurance as provided under Sec. 21-207 of this article.

#### Section 35-302

(a) Assets of the supplemental retirement plans may be deposited and invested in accordance with the investment elections allowed under the supplemental retirement plans as selected and determined by the Board in accordance with the statements of investment policy adopted by the Board from time to time 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.

(b) The Board shall make arrangements for the safe custody, domestic or global, of investments with one or more duly qualified custodian banks or trust companies.

(c) Except as provided in Title 12, Subtitle 4 and Title 14, Subtitle 3 of the State Finance and Procurement Article, Title 10 and Division II of the State Finance and Procurement Article do not apply to the supplemental retirement plans for:

  (1) services of managers to invest the assets deposited and invested in investment options of the supplemental retirement plans in accordance with the statements of investment policy adopted by the Board from time to time;

  (2) expenditures to manage, maintain, and enhance the value of assets deposited and invested in investment options of the supplemental retirement plans selected in accordance with the statements of investment policy adopted by the Board from time to time; and

  (3) expenditures for the safe custody, domestic or global, of assets deposited and invested in investment options of the supplemental retirement plans selected in accordance with subsection (b) of this section.

(d)

  (1) The Board shall consider and attempt to use to the greatest extent feasible minority business enterprises to provide investment advisor and fund manager services to the Board consistent with minority business purchasing standards applicable to units of State government under the State Finance and Procurement Article and consistent with the fiduciary duties of the Board.

  (2)

    (i) To assist it in achieving the goal described under paragraph (1) of this subsection, the Board shall undertake measures to remove any barriers that limit full participation by minority business enterprises in investment advisor and fund manager services opportunities afforded under this title.

    (ii) The measures undertaken by the Board shall include the use of the Maryland Teachers and State Employees Supplemental Retirement Plans' website, the Office of State Procurement website, and the State's electronic procurement system, whenever required, to provide notice to a broad and varied range of potential providers about the investment advisor and fund manager services opportunities afforded by the Maryland Teachers and State Employees Supplemental Retirement Plans.

  (3) In consultation with the Governor's Office of Small, Minority, and Women Business Affairs, the Board shall identify entities that have been certified by the State Department of Transportation as minority business enterprises as qualified minority business enterprises in order to help the Maryland Teachers and State Employees Supplemental Retirement Plans achieve the objective for greater use of minority business enterprises for investment advisor and fund manager services.

  (4) On or before September 1 each year, the Board shall submit a report to the Governor's Office of Small, Minority, and Women Business Affairs and, subject to Sec. 2-1257 of the State Government Article, the General Assembly on:

    (i) the identity of the minority business enterprise investment advisor and fund manager services firms used by the Board in the immediately preceding fiscal year;

    (ii) the percentage and dollar value of the assets that are under the control of the Board that are under the investment control of minority business enterprise investment advisor and fund manager services firms for each allocated asset class; and

    (iii) the measures the Board undertook in the immediately preceding fiscal year in accordance with paragraph (2)(ii) of this subsection.

### Subtitle 4. Tax Sheltered Annuity Plan

#### Section 35-401

There is a tax sheltered annuity plan for eligible participants as allowed by Sec. 403(b) of the Internal Revenue Code.

#### Section 35-402

An individual is eligible to participate in the tax sheltered annuity plan if the individual:

(1) is eligible for coverage under Sec. 403(b) of the Internal Revenue Code; and

(2) is an officer or employee of:

  (i) this State; or

  (ii) any other governmental entity in this State, including a county board of education.

#### Section 35-403

Subject to the conditions that the Board may set and in accordance with a contract between the participant and the employer, a participant may have contributions made to the tax sheltered annuity plan on the participant's behalf by a salary reduction or in place of a salary increase.

#### Section 35-404

This section does not prohibit a county board of education from adopting a plan for its employees that qualifies under Sec. 403(b) of the Internal Revenue Code.

### Subtitle 5. Salary Reduction Savings Plan

#### Section 35-501

(a) There is a salary reduction savings plan for eligible participants as allowed by Sec. 401(k) of the Internal Revenue Code.

(b) The Board shall obtain approval from the Internal Revenue Service for the salary reduction savings plan.

#### Section 35-502

An individual is eligible to participate in the salary reduction savings plan if the individual is:

(1) an officer of this State; or

(2) an employee of this State, including a contractual employee.

### Subtitle 6. Deferred Compensation Plan

#### Section 35-601

There is a deferred compensation plan for eligible participants as allowed by Sec. 457 of the Internal Revenue Code.

#### Section 35-602

An individual is eligible to participate in the deferred compensation plan if the individual is:

(1) an officer of this State;

(2) an employee of this State, including a contractual employee;

(3) an employee of the Northeast Maryland Waste Disposal Authority;

(4) an independent contractor who performs service under Sec. 21-304(c) of the Education Article; or

(5) an employee of the Maryland Small Business Retirement Savings Board who has been determined by the Board to be an eligible employee under the federal Internal Revenue Code.

### Subtitle 7. Defined Contribution Plan

#### Section 35-701

There is a Defined Contribution Plan for eligible participants as allowed by Sec. 401(a) of the Internal Revenue Code.

#### Section 35-702

An individual is eligible to participate in the Defined Contribution Plan if the individual is an eligible employee as defined in Sec. 32-101 of this article.

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