Expedited Bill No..
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__
Concerning:
Deferred
Retirement
Option Plans - Group G
Amendments
Revised: May 15, 2013 Draft No.
Introduced:
May 7,2013
Enacted:
June 11, 2013
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 Deferred Retirement Option Plan for Group G members; and
(2)
generally amend the law regarding the Employee's Retirement System.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Section 33-38A
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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. 12-13
1
Sec.
1.
Section 33-38A is amended as follows:
33-38A.
Deferred Retirement Option Plans.
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(b)
DROP Plan for Group
G
members.
(1)
Eligibility.
An
employee who is a member of Group G and who
has met the minimum requirements for a normal retirement may
participate
in
the DROP Plan.
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(2) Application requirements.
An
eligible employee must apply at
least 45 days before the employee becomes a participant.
An
employee may withdraw a pending application within 2 weeks
after submitting the application.
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(3) Employee participation and termination.
(A)
The employee's participation in the DROP Plan must
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begin on the first day of a month that begins at least 45
days, but not more than 75 days, after the employee
applied.
(B) A Group G member may participate
in
the DROP Plan
for up to 36 months.
An
employee who elects to stop
participating before the end of the 36-month period must
notify Fire and Rescue Services and the Office of Human
Resources at least 60 days before stopping participation
in the program.
(C) When the employee's participation in the DROP Plan
ends, the employee must stop working for the County
and receive a pension benefit.
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(4) Employment status.
A DROP Plan participant must continue to
be a member of the retirement system, earn sick and annual
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EXPEDITED BILL
No. 12-13
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leave, and remam eligible to participate in health and life
insurance
programs
for
employees
while
the
member
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participates in the DROP Plan.
(5)
Retirement date, retirement contributions, and credited service.
(A)
The retirement date of a member who participates in the
DROP Plan is the date when the employee begins to
participate in the DROP Plan.
(B)
The
member
will
continue
to
make
retirement
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contributions to the Optional Plan or Integrated Plan
while participating in the DROP Plan. The County must
not make retirement contributions on behalf of the
member after the date on which the member's DROP
Plan participation begins.
(C)
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Sick leave credited towards retirement at the beginning
of the member's participation will not be available for the
member's use after participation in the DROP Plan
begins.
(D)
A member who wishes to purchase prior service must do
so before the member's participation in the DROP Plan
begins.
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(6)
Pension benefits.
(A)
Before a member's participation begins, the member
irrevocably must choose a pension payment option under
Section 33-44 for retirement pension payments.
(B)
Pension benefits will not be paid to the member while the
member participates in the DROP Plan. Pension
payments that are deferred while the member participates
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EXPEDITED BILL
No.
12-13
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III
the DROP Plan must not include cost-of-living
increases under Section 33-44 that were given to retirees
and beneficiaries during the period of the member's
participation in the DROP Plan. The participant will
receive the deferred pension payments when the
member's participation in the DROP Plan ends, or within
60 days after the member gives notice under paragraph
(3)(B), whichever is later.
(C)
After the member's participation ends, the member's
pension benefit will be based on the member's:
(i)
credited service, including credit for unused sick
leave, before the member's participation in the
DROP Plan began, adjusted to include credit for
unused sick leave accrued during the period of
DROP Plan participation; and
(ii)
average fmal earnings, excluding earnings during
the period of participation in the DROP Plan.
(D)
The pension benefit that a member receives after the
member's participation in the DROP Plan ends must be
adjusted to reflect cost-of-living adjustments under
Section 33-44(c) that occurred during the period of the
member's participation in the DROP Plan, but the
pension
payments
that
are
deferred
during
the
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participation period must not include cost-of-living
adjustments.
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(7)
Disability retirement.
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ExPEDITED BILL
No. 12-13
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(A)
A member may apply for disability retirement prior to the
termination of the member's participation in the DROP
Plan.
(B)
If the Chief Administrative Officer determines that a
DROP participant is eligible for a service-connected
disability retirement, the participant must elect to receive
either:
(i)
the retirement benefit under subsection (6)( C) and
the DROP Plan payoff; or
(ii)
the service-connected disability retirement benefit
that the member would have received if the
member had continued as an active employee and
not elected to participate in the DROP Plan.
(C)
A member who elects to receive a service-connected
disability retirement must not receive the DROP Plan
payoff
(D)
If the Chief Administrative Officer determines that a
DROP participant is eligible for a non-service connected
disability retirement, the participant must receive:
(i)
the non-service connected disability retirement
benefit provided under Section 33-43(h), with the
benefit calculated as of the member's DROP entry
date; and
(ii)
the DROP account balance.
(8)
Death benefit.
If a member dies during the member's
participation in the DROP Plan, the member's beneficiary will
receive the greater of:
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EXPEDITED BILL NO.
12-13
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(A)
the death benefit that the beneficiary would have
received if the member had retired on the date on which
the member began to participate in the DROP Plan,
calculated to reflect cost-of-living adjustments under
Section 33-44(c) that occurred during the period of
DROP Plan participation, and the value of the DROP
Plan payoff, not including retroactive cost-of-living
adjustments to the deferred pension payments; or
III
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(B)
the service-connected death benefit that the beneficiary
would have received if the member had not elected to
participate in the DROP Plan, but not the DROP Plan
payoff.
(9)
DROP Plan payoffand distribution.
(A)
DROP Plan payoff
The DROP Plan payoff must include
the total of the following, accumulated over the period of
the member's participation in the DROP Plan:
(i)
the member's deferred monthly pension payments,
not including any cost-of-living adjustments;
(ii)
the member's retirement contributions to the
Optional Plan or Integrated Plan treated as picked­
up contributions; and
(iii)
for
~
member beginning DROP Plan participation
before July
L
2013, 8.25 percent annual interest
rate credited monthly, compounded quarterly [,
credited each calendar quarter] on the amount in
the DROP Plan payoff [at the beginning of each
quarter] during the member's participation in the
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EXPEDITED BILL
No.
12-13
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DROP Plan. For
f!
member beginning DROP Plan
participation on or after July
L
2013, 7.5 percent
annual interest credited monthly, compounded
quarterly on the amount in the DROP Plan payoff
during the member's participation in the DROP
plan.
(B)
DROP Plan payoffdistribution options.
At the time that a
member's DROP Plan participation ends, the member
must elect to have the DROP Plan
payoff~
ill
distributed as a:
[(i)]{&
lump sum payment;
annuity; or
direct
rollover
distribution,
III
[(ii)](hl
[(iii)]hl
compliance with the Internal Revenue Code,
to an eligible retirement plan;. or
(ii)
remain in the retirement system in
f!
DROP Plan
Payoff Account and receive interest at a 4.0
percent annual rate, credited monthly, for the
period of time during which the DROP Plan Payoff
Account remains in the retirement system.
.cg
Distribution gfDROP Plan PayoffAccount
ill
A fonner member may elect to receIve
f!
distribution of the DROP Plan Payoff Account in
f!
single lump sum payment or
f!
single direct
rollover distribution to an eligible retirement plan
at any time, but must receive
f!
distribution
Qy
the
date required under Internal Revenue Code Section
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EXPEDITED BILL
No. 12-13
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401(a)(9)k, as amended, and the corresponding
regulations.
(ii)
The Chief Administrative Officer must
~
the
~
balance of the DROP Plan Payoff Account to
designated beneficiary of
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former member who
dies without receiving the DROP Plan Payoff
Account as soon as practicable after the former
member's death.
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 June
30, 2013.
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Approved:
Nan
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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.
Linda M. Lauer, Clerk of the Council
Date
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