Expedited Bill No. 7-12
Concerning: Employees’ Retirement System – Automatic Distributions
Revised: March 1, 2012 Draft No. 2
Introduced: March 6, 2012
Enacted: May 1, 2012
Executive: May 10, 2012
Effective: May 10, 2012
Sunset Date: None
Ch. 10 , Laws of Mont. Co. 2012
County Council
For Montgomery County, Maryland
By: Council President at the Request of the County Executive
AN EXPEDITED ACT to:
(1) provide for an automatic distribution for account balances of $1,000 or less in the Optional and Integrated Plans and the Elected Officials’ Plan of the Employees’ Retirement System; and
(5) generally amend the law regarding the employees’ retirement system.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-39, 33-44 and 33-45
Boldface Heading or defined term. Underlining Added to existing law by original bill. [Single boldface
brackets] Deleted
from existing law by original bill. Double
underlining
Added
by amendment. [[Double boldface
brackets]] Deleted
from existing law or the bill by amendment. *
* * Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
Sec. 1. Sections 33-39, 33-44, and 33-45 are amended as follows:
33-39. Member contributions and credited interest.
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(c) Return of member contributions.
(1) Refund after employee’s separation under the optional and integrated plans.
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(D) Notwithstanding any other provision, if the member’s contributions and interest are $1,000 or less, the amount must be distributed in a lump sum as soon as administratively feasible after termination of employment even if the member does not submit an application. If the distribution cannot be made because the member cannot be located, the member will forfeit the amount. If the member later contacts the County, the member will receive the forfeited amount.
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33-44. Pension payment options and cost-of-living adjustments.
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(h) (1) Required commencement of benefit payments. The distribution of an elected officials' participant's retirement benefits must be made no later than April 1 of the calendar year following the later of the calendar year in which the elected officials' participant attains age seventy and one-half (70 1/2) or the calendar year in which the elected officials' participant retires. In the alternative, the payment of benefits to an elected officials' participant must begin not later than such April 1 under a method of payment that, in accordance with the applicable United States Treasury Regulations, provides for distribution of the elected officials' participant's benefits over:
[(1)] (A) The life of the elected official's participant;
[(2)] (B) The lives of the elected officials' participant and the elected officials' participant's designated beneficiary;
[(3)] (C) A period not extending beyond the life expectancy of the elected officials' participant; or
[(4)] (D) A period not extending beyond the life expectancy of the elected officials' participant and the elected officials' participant's designated beneficiary.
(2) Notwithstanding any other provision, an elected official’s account balance of $1,000 or less must be automatically distributed in a lump sum as soon as administratively feasible after termination of employment without a request from the elected official. If the distribution cannot be made because the elected official cannot be located, the elected official will forfeit the amount. If the elected official later contacts the County, the elected official will receive the forfeited amount.
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(q) Direct rollover distributions. A member or beneficiary may elect, in any manner prescribed by the Chief Administrative Officer at any time, to have any portion of eligible rollover distribution (as defined in the Internal Revenue Code) paid directly to an eligible retirement plan (as defined in the Internal Revenue Code) specified by the member in a direct rollover. For purposes of this subsection, a direct rollover is a payment from the retirement system to the eligible retirement plan specified by the member. A member may not elect a direct rollover if the eligible rollover distribution is less than $200.
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33-45. Vested benefits and withdrawal of contributions.
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(b) Withdrawal of contributions for optional and integrated plans.
(1) [If a member complies] In accordance with paragraph (2), the County must refund a member’s contributions with credited interest to:
(A) a member whose County service ends before the member is eligible to vest; and
(B) a member eligible to vest whose County service ends and who voluntarily elects to withdraw, thus ceasing to be a member.
(2) (A) If a member’s contributions and interest are more than $1,000, to obtain a refund of contributions, a member must properly complete and submit an application for a refund.
(B) If a [member] member’s contributions and interest are more than $1,000, and the member does not properly complete and submit an application for a refund, the County must refund the contributions with credited interest under the minimum distribution requirements of the Internal Revenue Code and corresponding regulations.
(C) Notwithstanding any other provision, if the member’s contributions and interest is $1,000 or less, the amount must be distributed in a lump sum as soon as administratively feasible after termination of employment even if the member does not submit an application. If the distribution cannot be made because the member cannot be located, the member will forfeit the amount. If the member later contacts the County, the member will receive the forfeited amount.
(3) If a vested member dies before the normal retirement date, the County must pay the designated beneficiary a lump sum death benefit equal to the member's contributions plus credited interest.
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Sec. 2. Expedited Effective Date.
The Council declares that this legislation is necessary for the immediate protection of the public interest. This Act takes effect on the date on which it becomes law.
Approved: