# COMAR Title 22 — State Retirement and Pension System

## Subtitle 01 — General Regulations

### Chapter 04 — Average Final Compensation

**Authority:** State Personnel and Pensions Article, §§20-204, 20-205, 20-205.1, and 21-110, Annotated Code of Maryland

**Administrative History:** Effective date: January 1, 1996 (22:26 Md. R. 2031)

**Administrative History:** Effective January 1, 1996, all of Title 22 was repealed and completely new regulations adopted. Codification and organization of the title were also completely changed. Consequently, the administrative histories of the revised Title 22 do not reflect regulatory activity before January 1, 1996. Refer to the old version of Title 22 or contact the Maryland State Archives for assistance.

**Administrative History:** Regulation .02 amended effective February 11, 2019 (46:3 Md. R. 108)

**Administrative History:** Regulation .03 amended effective February 11, 2019 (46:3 Md. R. 108)

**Administrative History:** Regulation .04 amended effective February 11, 2019 (46:3 Md. R. 108)

**Administrative History:** Regulation .05 amended effective February 11, 2019 (46:3 Md. R. 108)

#### Regulation .01 Scope.

*COMAR 22.01.04.01*

This chapter does not apply to the Judges' Retirement System or the Legislative Pension Plan.

#### Regulation .02 Average Final Compensation — Retirement Systems.

*COMAR 22.01.04.02*

A. This regulation applies only to the Correctional Officers' Retirement System, the Employees' Retirement System, the State Police Retirement System, and the Teachers' Retirement System.

B. Except as provided in §§D and E of this regulation, the average final compensation of a member who became a member before July 1, 2011 equals the average annual earnable compensation of the member, adjusted as provided in Regulation .04 of this chapter, for the:

  (1) 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

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

C. Except as provided in §§D and F of this regulation, the average final

  (1) 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

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

D. An increase of more than 20 percent to a member’s average annual earnable compensation in any one of the last 3 years of employment for a member who became a member before July 1, 2011, or in any one of the last 5 years of employment for a member who became a member on or after July 1, 2011, is an extraordinary salary increase that is not included in determining the member’s average final compensation unless:

  (1) The increase is the result of the member’s:

    (a) Promotion by the member’s employer; or

    (b) Appointment or election to a public office;

  (2) Including the increase when determining the member’s average final compensation would increase the member’s allowance by $25 or less per month; or

  (3) The Board of Trustees determines that the increase is not an extraordinary salary increase in accordance with Regulation .05 of this chapter.

E. If a member of the State Police Retirement System who became a member before July 1, 2011 and 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 member’s earnable compensation in the other system shall be used to determine the member’s average final compensation.

F. If a member of the State Police Retirement System who became a member on or after July 1, 2011 and 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 member’s earnable compensation in the other system shall be used to determine the member’s average final compensation.

#### Regulation .03 Average Final Compensation — Pension Systems.

*COMAR 22.01.04.03*

A. This regulation applies only to the Employees’ Pension System, the Local Fire and Police System, the Law Enforcement Officers’ Pension System, and the Teachers’ Pension System.

B. Except as provided in §D of this regulation, for the purpose of computing benefits under State Personnel and Pensions Article, Division II, Annotated Code of Maryland, the average final compensation of a member who became a member before July 1, 2011 equals the average annual earnable compensation of the member, adjusted as provided in Regulation .04 of this chapter, for the:

  (1) 3 consecutive years that provide the highest average earnable compensation; or

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

C. Except as provided in §D of this regulation, for the purpose of computing benefits under State Personnel and Pensions Article, Division II, Annotated Code Maryland, the average final compensation of a member who became a member on or after July 1, 2011 equals the average annual earnable compensation of the member, adjusted as provided in Regulation .04 of this chapter, for the:

  (1) 5 consecutive years that provide the highest average earnable compensation; or

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

D. An increase of more than 20 percent to a member’s average annual earnable compensation in any one of the last 3 years of employment for a member who became a member before July 1, 2011, or

  (1) The increase is the result of the member’s:

    (a) Promotion by the member’s employer; or

    (b) Appointment or election to a public office;

  (2) Including the increase when determining the member’s average final compensation would increase the member’s allowance by $25 or less per month; or

  (3) The Board of Trustees determines that the increase is not an extraordinary salary increase in accordance with Regulation .05 of this chapter.

#### Regulation .04 Adjustment to Earnable Compensation.

*COMAR 22.01.04.04*

A. The Board of Trustees shall adjust the member’s annual earnable compensation if, during the time period included in the computation of average final compensation, the member:

  (1) Was on a qualifying leave of absence; and

  (2) Received eligibility service credit as provided in COMAR 22.05.01.

B. Part-time Employment.

  (1) This section applies only to a member of the Employees’ Pension System, the Local Fire and Police System, the Law Enforcement Officers’ Pension System, or the Teachers’ Pension System whose eligibility service has been adjusted under State Personnel and Pensions Article, Division II, Annotated Code of Maryland 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) The Board of Trustees shall adjust the member’s annual earnable compensation to a full-time basis for any time period included in the computation of average final compensation.

#### Regulation .05 Extraordinary Salary Increase — Board of Trustees' Determination.

*COMAR 22.01.04.05*

A. Retirement Agency’s Report and Notice.

  (1) The Retirement Agency shall issue a preliminary report that includes the following information:

    (a) The name of each member that the Retirement Agency has preliminarily determined to have received an extraordinary salary increase;

    (b) The name of the member’s employer;

    (c) The amount of the increase in the member’s average annual earnable compensation;

    (d) The reason or reasons for the increase; and

    (e) A comparison of the member’s allowance calculated with and without inclusion of the extraordinary salary increase in the member’s annual final compensation.

  (2) The Retirement Agency shall send to each member listed in the report written notice of:

    (a) The Agency’s determination that the member has received an extraordinary salary increase;

    (b) A comparison of the member’s average final compensation and resulting allowance amount calculated with and without inclusion of the extraordinary salary increase;

    (c) The employer’s stated reason or reasons for the increase; and

    (d) A statement of the member’s right to file with the Executive Director a written statement of the reasons why the member believes the determination that the member received an extraordinary salary increase is incorrect.

B. Board of Trustees Determination.

  (1) The Executive Director shall submit to the Board of Trustees:

    (a) Each report issued pursuant to §A(1) of this regulation; and

    (b) A copy of a written statement filed by a member pursuant to §A(2)(d) of this regulation.

  (2) Following review of the Retirement Agency’s report and any written statement filed by a member, a majority of the Board of Trustees shall determine whether each member received an extraordinary salary increase.

  (3) As soon as practicable after the meeting of the Board of Trustees, the Secretary to the Board of Trustees shall send each member listed on the Retirement Agency’s report written notice of the Board of Trustees’ decision and, if the decision is adverse to the member, of the member’s right to submit a petition for a hearing under COMAR 22.03.04.