Expedited Bill No. --'1'-\.1.....;-1'-\.1___- - ­
Concerning: Personnel - Retirement
Plans - Contributions
Revised: May 26, 2011 Draft No.4-'--__
Introduced:
April 5, 2011
Enacted:
May 26,2011
Executive: _ _ _ _ _ _ _ __
Effective: _--:-:_ _ _ _ _ _ __
Sunset Date: ....:.N-'-'o""'n=e_ __:_----
ChI _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Council President at the Request ofthe County Executive
AN EXPEDITED ACT
to:
(1) amend the Optional and Integrated Plans of the Employees' Retirement System to
increase member contributions;
(2) amend the Guaranteed Retirement Income Plan of the Employee's Retirement
System and the Retirement Savings Plan to decrease employer contributions and
permit an additional after-tax employee Cillltribution in Fiscal Year 2012; [and]
(3) amend the cost-pf-living provisions in
the
Optional
and
Integrated Plans of the
Employees' Retirement System and the Disabilitv Benefits Plan of the Retirement
Savings Plan: and
ill
generally amend the law regarding the employees' retirement system.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-39, 33-40. 33-44, ;33-116, [[and]] 33-117
~18,
and 33-131
Boldface
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[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
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*
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Heading or defined term.
Added to existing law by original bill.
Deleted from 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.11-11
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Sec. 1.
Sections 33-39, 33-40, 33-44. 33-116, [[and]] 33-117,33-118.
and 33-131 are amended as follows:
33-39.
(a)
Member Contributions and Credited Interest.
Member contributions. Each member of the retirement system must
contribute a portion of the member's regular earnings through regular
payroll deductions.
(1)
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Member Contributions to the Optional Retirement Plan.
A
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member of the Optional Retirement Plan must contribute the
following percentage of regular earnings:
(A)
Group A or H member, [6] 7 percent for servIce
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beginning on the first pay period after June
30. 2011
and
percent for service beginning on the first pay period after June
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(B)
(C)
(D)
Group B member, 7 percent;
Group D member,
7Ih
percent; and
Group E, F, or G member,
[8Ih] 9Ih
percent for service
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beginning on the first pay period after June
30, 2011
and
10Ih
percent for service beginning on the first pay period after June
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(2)
Member Contributions to the Integrated Retirement Plan. A
member of the Integrated Retirement Plan must contribute the
following percentage of regular earnings:
(A)
Group A, [4] 5 percent for service beginning on the first
pay period after June
30. 2011
and
Q
percent for service
beginning on the first pay period after June
30, 2012
up
to the maximum Social Security wage base, and [6]
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EXPEDITED BILL NO.11-11
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June 30. 2011 and
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percent for service beginning on the
first pay period after June 30. 2012 of regular earnings
that exceed the wage base;
(B) Group B,
4Yz
percent up to the maximum Social Security
wage base, and 7 percent of regular earnings that exceed
the wage base;
(C) Group E, [4%] 5% percent for service beginning on the
first pay period after June 30, 2011 and 6% percent for
service beginning on the first pay period after June 30,
2012 up to the maximum Social Security wage base, and
[8Yz] 9Yz
percent for service beginning on the first pay
period after June 30. 2011 and
10Yz
percent for service
beginning on the first pay period afteLJune 30, 2012 of
regular earnings that exceed the wage base;
(D) Group F,
[4
%] 5% percent for service beginning on the
first pay period after June 30, 2011 and 6% percent for
service beginning on the first pay period after June 30,
2012 up to the maximum Social Security wage base and
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[8Yz] 9Yz
percent for service beginning on the first pay
period after June 30. 2011 and
10Yz
percent for service
beginning on the first pay period after June 30. 2012 of
regular earnings that exceed the wage base;
(E) Group G:
(i)
[5Yz] 6Yz
percent for service beginning on the first
pay period after June 30. 2011 and
7Yz
percent for
service beginning on the first pay period after June
~~~
up to the maximum Social Security
..,
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ExPEDITED BILL
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base, and
(9Y4] 10Y4
percent for service beginning
on the first pay period after June 30. 2011 and
11 Y4 percent for service beginning on the first pay
period after June 30. 2012 of regular earnings that
exceed the wage base;
(ii)
starting in the 25th year from the member's leave
accrual date under the County payroll system, [4%]
5% percent for service beginning on the first pay
period after June 30, 2011 and 6% percent for
service beginning on the first pay period after June
30.2012 up to the maximum Social Security wage
base, and
[8Yz] 9Yz
percent for service beginning
on the first pay period after June 30. 2011 and 10Yl
percent for service beginning on the first pay
period after June 30. 2012 of regular earnings that
exceed the wage base on and after the member's
25th year of credited service;
(F)
Group H, [4] 5 percent for service beginning on the first
pay period after June 30, 2011 and
Q
percent for service
b¥ginning on the first pay period after June 30, 2012 up
to the maximum Social Security wage base and [6]
:
1
percent for service beginning on the first pay period after
June 30, 2011 and.8. percent for service beginning on the
first pay period after June 30, 2012 of regular earnings
that exceed the wage base.
*
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EXPEDITED BILL
No.11-11
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(4)
Member contributions to the guaranteed retirement Income
plan.
(A)
A non-public safety employee member in the guaranteed
retirement income plan must contribute 4% of regular
earnings less than or equal to the Social Security wage
base and 8% of regular earnings that exceed the Social
Security wage base.
(B)
A public safety employee member in the guaranteed
retirement income plan must contribute 3% of regular
earnings less than or equal to the Social Security wage
base and 6% of regular earnings that exceed the Social
Security wage base.
(C)
For service beginning on the first pay period after June
30, 2011 and before the first pay period beginning after
July 1, 2012. a member may contribute an additional 2%
of regular earnings on
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an
after-tax basis by making an
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irrevocable election in writing on or before September 1,
2011.
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!Ill
To the extent allowed under Section 414(h)(2) of the
Internal Revenue Code, the County must "pick up" (as
described in the Internal Revenue Code) member
contributions to the guaranteed retirement income plan.
A
member
is
always
vested
in
the
member's
contributions.
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[[(D)]]
When a member reJOInS County servlce after
military service that qualifies under Section 33-41(q) as
credited service, the County must credit the member with
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the amount that the member would have contributed if
the member had worked for the County during military
service. Contribution credits for military service must be
based on the regular earnings the member would have
earned during military service. If the regular earnings are
not reasonably ascertainable, the credit must be based on
the
member's
regular
earnings
during
a
period
The
immediately preceding the military service.
averaging period is 12 months, or the full length of the
member's County service, whichever is shorter.
The
member must not receive any retroactive credited interest
on the contribution credits. The County must not credit a
member with a discretionary after-tax contribution under
subparagraph C unless the member elects to make up the •
contribution under Internal Revenue Code Section
414(ul. as amended.
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33-40.
Employer Contributions.
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(d)
Elected officials' plan. Subsections 33-40(a), (b), and (c) do not apply
to the elected officials' plan. Instead, the following provisions apply:
(1)
The County must contribute to the elected officials' plan
in
monthly installments, on behalf of each elected officials'
participant, an amount equal to
[8]
[[§.11
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percent of the elected
officials' participants' regular earnings. The .county's elected
officials' contributions are to be adjusted to take into account
any forfeiture under subsection 33-40( d)(2)(D). In detennining
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the amount of the County elected officials' contributions, only
an elected officials' participant's regular earnings earned while
that elected officials' participant made required elected officials'
participant contributions are counted.
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(e)
(1)
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Guaranteed Retirement Income Plan.
Each pay period, the County must credit to each non-public
safety member's guaranteed retirement income plan account an
amount equal to [8%] 6% for service beginning on the first pay
period after June 30, 2011 and 8% for service beginning on the
first pay period afterJune 30, 2012 of the member's regular
earnings. [[The County must make a one-time credit equal to
.36% of the member's fiscal year 2010 regular earnings to the
member's guaranteed retirement income plan account on the
second pay period in July 2010 for a member who is on the
County payroll as of June 30, 2009 and who is also on the
County payroll as of June 30, 2010.]] Interest must be credited
at an annual rate of 7.25% on the County contribution credits. If
the annual 7.25% interest rate does not comply with applicable
law, the third segment rate described in Internal Revenue Code
Section 430(h)(2)(G) or any successor provision must apply.
Interest must be credited to a member's guaranteed retirement
income plan account balance on a monthly basis as of the last
day of the month.
(2)
Each pay period, the County must credit to each public safety
member's guaranteed retirement income plan account an
amount equal to [10%]
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pay period after June 30, 2011 and 10% for service beginning
on the first pay period after June 30, 2012 of the member's
regular earnings. Interest must be credited at an annual rate of
7.25% on the County contribution credits. If the annual 7.25%
interest rate does not comply with applicable law, the third
segment rate described in Internal Revenue Code Section
430(h)(2)(G) or any successor provision must apply. Interest
must be credited to a member's guaranteed retirement income
plan account balance on a monthly basis as of the last day of the
month.
33-44. Pension payment options and cost-of-living adjustments.
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(c)
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....:
Cost-ofliving adjustment.
A retired member or beneficiary, including
the surviving spouse or domestic partner of a group D member or
other beneficiary who survives the member under a pension option or
who is otherwise eligible to receive benefits, must receive
an
annual
cost-of-living adjustment in pension benefits.
(1)
Each retired member or beneficiary [[shall]] must have a cost­
of-living base which [[shall]]
be the Consumer Price
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Index most recently preceding the date of the member's
retirement or death.
(2)
The Consumer Price Index to be used for the fiscal year in
which the cost-of-living adjustment is payable [[shall]]
be
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the index calculated for the month last preceding the end of the
fiscal year immediately preceding the fiscal year in which the
adjustment is to be effective.
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(3)
The percentage cost-of-living adjustment of pension benefits
must be obtained by dividing the most recent index determined
under paragraph (2) by the next preceding index multiplied by
100 less 100.
(A)
A member enrolled before July 1, 1978, must receive the
full cost-of- living adjustment. .
(B)
A member enrolled on or after July 1, 1978, must receive
100 percent of the change in the consumer price index up
to 3 percent, and 60 percent of any change
in
the
consumer price index greater than 3 percent, up to a total
adjustment of 7
Y2
percent in any year. The 7
Y2
percent
annual limit does not apply to:
(i)
(ii)
a retired member who is disabled; or
a pensioner aged 65 or older for a fiscal year
beginning after the date the pensioner reaches age
65.
(4)
For the purpose of this section, "Consumer Price Index" [[shall
mean]] means, beginning January 1, 1978, the Consumer Price
Index for All Urban Consumers issued for the Washington,
D.C. Metropolitan Area (all items) as published by the United
States Department of Labor, Bureau of Labor Statistics (for
months before 1978, the Consumer Price Index published
previously for urban wage earners and clerical workers for such
months [[shall]] must be applicable.)
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(5)
Pension benefits are subject to decreases in the Consumer Price
Index. In no instance, however, [[shall]] must a retired member
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or beneficiary receive less than the amount of pension benefits
for which eligible at the time of the member's retirement.
Notwithstanding the provisions of this Section, the cost-of­
living adjustment must not exceed 2.5% for:
credited service beginning on the first pay period after
June 30, 2011; or
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a disability retirement pension based upon a disability
occurring after June 30. 2011.
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33-116.
Participant contributions.
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(a)
Percent of participant contributions.
(1)
(A)
Group
I.
Each participant in Group I must contribute,
through regular payroll deductions, 4% of regular
earnings less than or equal to the Social Security wage
base and 8% of regular earnings that exceed the Social
Security wage base.
(B)
Group
II.
Each participant in Group II must contribute,
through regular payroll deductions, 3% of regular
earnings less than or equal to the Social Security wage
base and 6% of regular earnings that exceed the Social
Security wage base.
For service beginning on the first pav period after June
30. 2011 and before the first pay period beginning after
July 1, 2012. a participant may contribute an additional
2%)
of regular earnings on an after-tax basis by making
an irrevQcable election in writing on or before September
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EXPEDITED Bill
No.11-11
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(4)
*
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The County must contribute on behalf of a participant who
rejoins County service after military service that qualified under
Section 33-1l9(b) as credited service an amount equal to the
amount that the participant could have contributed if the
participant had worked for the County during the period of
military service.
(A)
Contributions for the period of military service must be
based on the regular earnings the participant would have
earned during the period of military servIce.
amount
of
regular
earnmgs
IS
not
If this
reasonably
ascertainable, the contribution must be based on the
participant's average regular earnings during a period
immediately preceding military service. The averaging
period is 12 months, or the full length of the participant's
County service, whichever is shorter.
(B)
Contributions under this paragraph count toward the
maximum annual contribution limits under the Internal
Revenue Code for the year for which the contributions
relate.
(C)
The participant IS not entitled to any retroactive
allocation of forfeitures or any retroactive crediting of
earnmgs
because
of
contributions
under
this
subparagraph.
tm
The County must not credit a participant with a
discretionary after-tax contribution under subsection
(a)O)(C) unless the particiDant elects to make liD the
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contribution under Internal Revenue Code Section
414(u), as amended.
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33-117.
Employer Contributions.
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(a)
Amount of employer contributions.
(1)
Group I participants. The County must contribute to the
retirement savings plan in quarterly installments, on behalf of
each Group I participant, an amount equal to [8%] 6% for
service beginning on the first pay period after June 30, 2011
and 8% for service beginning on the first pay period after June
30, 2012 of that participant's regular earnings while a Group I
participant during a plan year, [[The County must make a one­
time contribution of .36% of the participant's fiscal year 2010
regular earnings on the second pay period in July 2010 for a
Group I participant on the County payroll as of June 30, 2009
and who is also on the County payroll as of June 30,2010.]]
(2)
Group II participants. The County must contribute to the
retirement savings plan in quarterly installments, on behalf of
each Group II participant, an amount equal to [10%] 80/0
service beginning on the first pay period after June 30, 2011
and 10% for service beginning on the first pay period after June
30, 2012 of that participant's regular earnings while a Group II
participant during a plan year. [[The County ,must make a one­
time contribution of .36% of the participant's fiscal year 2010
regular earnings on the second pay period in July 2010 for a
Group
n
participant on the County payroll as of June 30, 2009
and who is also on the County payroll as of June 30, 2010.]]
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33-118.
(a)
Contribution limitations.
*
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Maximum Annual Contribution
(1)
Notwithstanding any other provision in this Division, to the
extent required under the Internal Revenue Code, the annual
additions described
in
this Section that are allocated
in
any
limitation year to the retirement accounts of any participant
must not exceed the lesser of:
(A)
$30,000, effective January 1, 1995, or $40,000, effective
January 1, 2002 (the "dollar limitation"), as adjusted by
the Internal Revenue Service from time to time to reflect
cost of living increases; or
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(B)
25
percent of the participant's compensation as defmed
below, or 100 percent of the participant's compensation,
effective January 1, 2002, (the "percentage limitation").
(2)
For purposes of this Section, the annual addition must be:
(A)
(B)
(C)
County contributions;
required participant contributions; [[and]]
forfeitures, but only if the retirement savings plan permits
forfeitures to be added to the participant's account: and
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all
after-tax contributions.
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33-131. Amount of benefits.
*
*
*
*
(c)
*
Cost-aI-living adjustments.
The administrator must make a cost-of­
living adjustment annually to the disability benefits paid to any public
safety employee
this plan. The cost of living adjustment must
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be equal to 60% of the annual increase in the Baltimore-Washington
Area Consumer Price Index. However, the disability cost-of-living
increase must not increase the disability benefits by more than 3%
each 12-month period.
A non-public safety employee must not
receive a cost-of-living adjustment for any benefit paid under this
plan. The cost-of-living adjustment for a disability benefit based upon
a disability occurring after June 30, 2011 must not exceed 2.5%.
Sec. 2.
Effective Date.
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on July 1, 2011 except as
otherwise provided. For a member of the Optional Plan, Integrated Plan, [[Elected
Officials' Plan,]] or Guaranteed Retirement Income Plan holding the office of
County Executive, Councilmember, or Sheriff, the amendments to Sections 33­
39(a)(1), 33-39(a)(2), 33-44(ct [[, 33-40(d)(1)]] and 33-40(e)(1) take effect on
December 1, 2014. For a member of the Optional Plan, Integrated Plan, [[Elected
Officials' Plan,]] or Guaranteed Retirement Income Plan holding the office of
State's Attorney, the amendments to Sections 33-39(a)(1), 33-39(a)(2), 33-44(c),
[[,
33-40(d)(1)]] and 33-40(e)(1) take effect on January 5,2015.
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Isiah Leggett, County Executive
Date
Approved:
Valerie Ervin, President, ounty CouncIl
Approved:
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D~te
s;{rh~O/1
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This is a correct copy o/Council action.
Linda M. Lauer, Clerk of the Council
Date