Agenda Item 4.1
April 13,2010
Introduction
MEMORANDUM
TO:
FROM:
SUBJECT:
County Council
Robert
H.
Drummer, Senior Legislative Attorney
Introduction:
Expedited Bill 18-10, Personnel
Imputed Compensation
nuo
Retirement - Furlough ­
(i'\
Expedited Bill 18-10, Personnel
Retirement
Furlough - Imputed Compensation,
sponsored by the Council President at the request of the County Executive, is scheduled to be
introduced on April 13, 2010. A public hearing is tentatively scheduled for April 27 at 1:30 p.m.
The Executive's Recommended FYl1 Operating Budget includes 10 furlough days for
most County employees. Under the current retirement laws, an employee who takes a furlough
would also suffer a corresponding loss of retirement benefits due to the reduction in regular
earnings. However, §30-2(b)(3) of the Personnel Regulation requires the County to ensure that
retirement benefits are not adversely affected when an employee takes a furlough. Bill 18-10
would amend the definition of regular earnings in the retirement laws to include imputed income
not received due to a furlough.
This Bill would ensure that a furlough does not reduce the employer and the employee
contributions to the plan or any pension benefit. The Bill would also prevent a furlough from
resulting in a reduced disability benefit for a member of the Retirement Savings Plan or the
Guaranteed Retirement Income Plan.
This packet contains:
Expedited Bill 18-10
Legislative Request Report
Executive Memo
Circle #
1
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6
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Expedited Bill No.
---!..::18~-....:..1!::.0
_ _ __
Concerning: Personnel - Retirement ­
Furlough-Imputed Compensation
Revised: April 8, 2010 Draft No. _1_
Introduced:
April 13, 2010
Expires:
October 13, 2011
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective:
_~
_ _ _ _ _ _ __
Sunset Date:
....!.N~o!!..!n~e-:----:
_ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
amend the definition of regular earnings under the employees' retirement system
and the retirement savings plan to include certain imputed compensation not
received due to a furlough; and
(2) generally amend the law regarding the employees' retirement system and the
retirement savings plan.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-35,33-113 and 33-128
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double
boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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Expedited Bill No. 18 -10
1
Sec.
1.
Sections 33-35, 33-113 and 33-128 are amended as follows:
33-35. Definitions
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3
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In this Article, the following words and phrases have the following
meanmgs:
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*
*
*
Regular earnings:
Except as otherwise provided, gross pay for actual hours
worked.1 including paid leave, but not including overtime. Regular earnings for a
Group A, E, or H member who is employed on July 1, 2009 and participates in the
integrated or optional plan must include amounts as if the member had received an
increase of 4.5% in the member's gross pay as of July 1, 2009, except for the
purpose of calculating a member's contribution under Section 33-39. Regular
earnings for a Group F member who is employed on July 1, 2009 and participates
in the integrated or optional plan must include amounts as if the member had
received an increase of 4.25% in the member's gross pay as of July 1, 2009, except
for the purpose of calculating a member's contribution under Section 33-39.
Regular earnings for a Group G member who is employed on July 1, 2009 and
participates in the integrated or optional plan must include amounts as if the
member had received an increase of 4% in the member's gross pay as of July 1,
2009, except for the purpose of calculating a member's contribution under Section
33-39. If
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member is required to take any furlough, as defined in personnel
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regulations adopted under Section 33-7(b), regular earnings must include any
amount the member would have received if the member had not been required to
take any furlough. Regular earnings for an elected official is gross pay for services
rendered to the County. Regular earnings must not exceed the limit under Internal
Revenue Code Section 401(a)(l7), as adjusted by the Internal Revenue Service.
Gross pay must be used to determine benefits even if the County implements a
pick-up plan under Section 414 of the Internal Revenue Code. Gross pay must be
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(!)­
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Expedited Bill No. 18 -10
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used to determine benefits even if a member has agreed to a reduction in earnings
under:
(a)
the County's deferred compensation plan under Section 457 of the
Internal Revenue Code; or
(b)
any statutory fringe benefit program sponsored by the County and
permitted by the Internal Revenue Code.
*
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31
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33
34
*
*
35
33-113. Definitions.
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In this Division the following words and phrases have the following
meamngs:
*
(p)
*
*
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Regular earnings
means gross pay for actual hours worked, including
paid leave, but not including [exclusive of] overtime, without
reduction for participant contributions that are picked up under
Section 33-1l6(a), or contributions to any County deferred
compensation plan or statutory fringe benefit program.
If a
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participant is required to take any furlough, as defined in personnel
regulations under Section 33-7(b), regular earnings must include any
amount the participant would have received if the participant had not
been required to take any furlough.
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*
33-128. Definitions.
*
*
meanmgs:
*
*
.
In this Division, the following words and phrases have the following
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*
Final earnings
means the annual average of the regular salary of an employee less
any shift pay differential for the I8-month period immediately before the disability
o
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Expedited Bill No. 18 -10
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or any period of 18 consecutive months, whichever is greater. If
f!
participant is
required to take any furlough, as defined in personnel regulations adopted under
Section 33-7(b), final earnings must include any amount the participant would
have received if the participant had not been required to take any furlough.
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Sec. 2. Effective Date.
The Council declares that this Act is necessary for
the immediate protection of the public interest. This Act takes effect on July 1,
2010.
Approved:
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Nancy Floreen, President, County Council
Date
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Approved:
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Isiah Leggett, County Executive
Date
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This is a correct copy ofCouncil action.
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Linda M. Lauer, Clerk of the Council
Date
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LEGISLATIVE REQUEST REPORT
Personnel
DESCRIPTION:
Expedited Bill 18 -10
Retirement Furlough
-
Imputed Compensation
The requested expedited legislation would amend the definition of regular
earnings in the Employee Retirement System and the Retirement Savings
Plan to include any amount the employee would have received if the
employee had not been required to take a furlough.
The Executive's Recommended FYll Operating Budget includes 10
furlough days for most County employees. Under the current retirement
laws, an employee who takes a furlough would also suffer a corresponding
loss of retirement benefits due to the reduction in regular earnings.
PROBLEM:
GOALS AND
OBJECTIVES:
Under §30-2(b)(3) of the Personnel Regulation, the County must ensure that
retirement benefits are not adversely affected when an employee takes a
furlough. This Bill would amend the definition of regular earnings in the
retirement laws to include imputed income not received due to a furlough.
This Bill would thereby prevent a furlough from resulting in lower
employer and employee contributions to the plan and a lower pension
benefit.
COORDINATION:
Office of Human Resources, County Attorney's Office
FISCAL IMPACT:
Office of Management and Budget
ECONOMIC
IMPACT:
EVALUATION:
Fiscal impact statement to be provided at a later date.
nJa
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OFFICE OF THE COUNTY
L'/U.C,,-",U
ROCKVILLE, MARYLAND 20850
Isiah
County Executive
MEMORANDUM
April 8, 201 0
TO:
Nancy Floreen, President
Montgomery County Council
FROM:
SUBJECT:
Isiah Leggett, County Executive
--P
~7'lA~
Retirement
__
Proposed Legislation - Personnel
Compensation
Furlough - Imputed
Section 30-2
(b)
(3) of the Personnel Regulations provides that the County must
ensure that retirement benefits are not adversely affected when an employee takes a furlough
day. To ensure no loss of retirement benefit when County employees are furloughed in FY 2011,
I am proposing the attached legislation that will amend the definition of regular earnings in the
Employees Retirement System and the Retirement Savings Plan to include any amount the
member would have received if the member had not been required to take a furlough.
With this bill, there will be no reduction in the employee and employer
contribution for retirement as a result of the furlough. Please let me know if you have any
questions or concerns regarding this proposed amendment.
cc: Joseph Adler, Director, Office of Human Resources