Expedited Bill No.
_....!2=--..w17~
_ __
Concerning:
Employees' Retirement
System - Retirement Savings Plan
­
Employee Rights and Benefits ­
Amendments
Revised:2/10/2017 Draft NO'..l..1_ __
Introduced:
February 14. 2017
Enacted:
April 4. 2017
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
....!N~o!.Wn~e
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
amend the rights and benefits for certain employees under the Employees'
Retirement System to remain tax qualified under the Internal Revenue Code; and
(2)
amend the rights and benefits for certain employees under the Retirement Savings
Plan to remain tax qualified under the Internal Revenue Code; and
(3)
generally amend the Jaw regarding the County employee retirement plans.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-36, 33-42, 33-44, 33-45. 33-114, 33-118, and 33-120
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.
Deleted.from existing law or the hill hy amendment.
E"{isting law unqfli!Cted b.v bill.
The County Councilfor Montgomery County.
~lyfaryland
approves
the following Act:
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL NO. 2-17
Sec. 1. Sections 33-36, 33-42, 33-44, 33-45, 33-114, 33-118 and 33-120 are
2
3
4
amended as follows:
33-36. Establishment.
*
(d)
*
*
5
6
7
8
9
Unifonned Services Employment and Reemployment Rights Act.
Notwithstanding any provision of any plan, the County must provide
rights, contributions, benetits and service credit for qualified military
service as required by Section
414(u)
of the Internal Revenue
including subsection
414(u)(12).
Code~
]0
11
12
13
14
15
33-42. Amount of pension at normal retirement date or early retirement date.
*
(g)
*
*
Maximum annual contribution to elected officials' plan.
*
(3)
(A)
*
*
In this subsection (g), only:
for purposes of applying Section 415 of the Internal
Revenue Code, "compensation" has the same meaning as
provided in Treasury Regulation Section 1.415-2(d)(1),
including amounts contributed at the election of the
participant that are not includible in the gross income of
the participant, under Sections 402(g)(3), 125, 457, and
132(f)(4) of the Internal Revenue Code.:. Effective for
limitation years after December
.lL
2008, must include
amounts required to be included pursuant to Section
414(u)(12)
of the Internal Revenue Code; and
16
17
18
19
20
21
22
23
24
25
26
*
(h)
*
*
Maximum annual benefit.
Despite any other provision governing the
27
retirement system, the annual benefit of a member must not exceed the
-2­
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL NO. 2·17
28
29
30
31
limits of Internal Revenue Code Section 415 that apply to the plan. The
Chief Administrative Officer must freeze or reduce a member's annual
benefit to comply with this subsection. Effective for limitation years
after December 31, 2008, amounts required to be included under
Section 414(u)(l2) of the Internal Revenue Code must be included in
33
34
compensation for purposes of Section 415 of the Internal Revenue
Code.
35
36
37
*
*
(q)
*
*
*
33-44. Pension payment options and cost-of-Iiving adjustments.
*
38
39
40
41
42
43
44
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 paid directly to an
eligible retirement plan specified by the member in a direct rollover. A
member may not elect a direct rollover if the eligible rollover
distribution is less than $200.00. As used in this subsection:
(1)
direct rollover
means a payment from the retirement system to
the eligible retirement plan specified by the member;
[and]
45
46
(2)
eligible retirement plan means:
(A)
an individual retirement account described m Internal
Revenue Code Section 408(a);
(B)
an individual retirement annuity described in Internal
Revenue Code Section 408(b) (other than an endowment
contract);
(C)
(D)
a qualified trust;
an annuity plan described m Internal Revenue Code
Section 403(a);
·3·
47
48
49
50
51
52
53
54
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED
BILL
NO. 2-17
55
(E)
an eligible deferred compensation plan described m
Internal
Revenue
Code
Section 457(b)
which
IS
56
57
maintained by an eligible employer described in Internal
Revenue Code Section 457( e)(
1
)(A); or
(F)
an annuity described in Internal Revenue Code Section
403(b)~
58
59
60
61
ill
eligible rollover distribution
means any distribution of all or any
62
63
64
65
66
67
portion of the retirement benefit; except:
.tAl
any distribution which is one of
f!
series of substantially
equal periodic payments (not less frequently than
annually) made:
ill
for the life (or life expectancy) of the employee or
the joint lives (or joint life expectancies) of the
employee
and
the
employee's
designated
68
69
70
beneficiary; or
@
for
f!
specified period of
lQ
years or more; or
71
72
73
74
75
76
an
ill
any distribution to the extent such distribution is required
under Section 401 (a)(9) of the Internal Revenue Code, as
amended; and
beneficiary
includes
f!
non-spouse beneficiary. A non-spouse
beneficiary may make
f!
direct rollover only to an inherited
individual retirement account or annuity described in Sections
408(a) or 408(b) ofthe Internal Revenue Code that is established
on behalf of the non-spouse beneficiary. Such rollover must be
made in
f!
manner consistent with Section 402( c
)(11)
of the
Internal Revenue Code and any other applicable guidance.
77
78
79
80
81
*
*
-4­
*
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EXPEDITED BILL NO. 2-17
82
33-45. Vested benefits and withdrawal of contributions.
83
84
*
(c)
*
*
Vested benefits.
(2)
85
86
87
For purposes of this subsection, vesting will be in accordance
with Section 401(a)(37) ofthe Internal Revenue Code. Effective
January
L
2007, the beneficiary of
~
member on
~
leave of
88
absence to perform military service with reemployment rights
described in Section
414(u)
ofthe Internal Revenue Code, where
the member cannot return to employment on account of his or
her death, must be entitled to any additional benefits (other than
benefit accruals relating to the period of qualified military
service) that would be provided under the employees' retirement
system had the member died as an active employee, in
accordance with Section 401(a)(37) of the Internal Revenue
Code. This provision applies to the elected officials' plan, the
guaranteed retirement income plan, and the optional and
integrated plans.
89
90
91
92
93
94
95
96
97
98
99
100
*
33-114.
Establishment.
*
*
101
102
103
104
105
106
107
108
*
(c)
*
*
provid~
Uniformed Services Employment and Reemployment Rights Act.
Notwithstanding any provision of a plan, the County must
rights, contributions, benefits and service credit for qualified military
service according to Section
414(u)
of the Internal Revenue Code:!
including subsection 414(u)(l2).
33-118. Maximum annual contribution.
(a)
Contribution limitations.
-5­
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL NO. 2-17
109
110
111
112
*
(3)
*
*
In this Section, for purposes of applying Section 415 of the
Internal Revenue Code, "compensation" has the same meaning
as provided in Treasury Regulation Section 1.415-2(d)( 1),
including amounts contributed at the election of the participant
that are not includible in the gross income of the participant,
under Sections 402(g)(3), 125, 457, and (effective January 1,
2001) 132(t)(4) of the Internal Revenue Code:. Effective for
limitation years after December
113
114
115
116
117
lL.
2008, compensation must
118
119
120
121
122
123
124
include amounts required to be included
Qy
Section 414(u)(l2)
of the Internal Revenue Code.
*
@
*
*
For purposes of this Section, limitation year means calendar year.
For purposes of applying this Section, all defined contribution plans
maintained
Qy
the County must be aggregated.
W
33-120.
Distribution of Benefit.
125
126
127
(
c)
*
Death benefits.
*
*
*
*
*
(2)
128
129
130
Vesting.
If a participant dies before the participant's separation
from County service, all amounts credited to the participant's
County contributions account are 100% vested regardless of the
participant's years of credited service. For purposes of this
subsection, vesting must be in accordance with Section
401(a)(37) of the Internal Revenue Code. Effective January
2007, the beneficiary of
~
participant on
~
131
132
133
134
.L
leave of absence to
135
perform military service with reemployment rights described in
- 6­
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL NO. 2-17
136
137
Section 4l4(u) of the Internal Revenue Code, where the
participant cannot return to employment on account of his or her
death, must be entitled to any additional benefits that would be
provided under the retirement savings plan had the participant
died as an active employee, in accordance with Section
401(a)(37) of the Internal Revenue Code.
*
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
*
*
(g)
Direct rollover distributions.
Notwithstanding any provision of this
Division that would otherwise limit a participant's election under this
Section, a participant or beneficiary may elect in any manner prescribed
by the Chief Administrative Officer at any time to have any portion of
an eligible rollover distribution paid directly to an eligible retirement
plan specified by the participant in a direct rollover. As used in this
subsection:
*
ill
*
*
~
For purposes of this subsection, beneficiary includes
non­
spouse beneficiary. A non-spouse beneficiary may make
~
direct
rollover only to an inherited individual retirement account or
annuity described in Sections 408(a) or 408(b) of the Internal
Revenue Code that is established on behalf of the non-spouse
beneficiary. Such rollover shall be made in
~
manner consistent
with Section 402( c)( 11) of the Internal Revenue Code and any
other applicable guidance.
154
155
156
157
158
159
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 the date on which it
becomes law.
-7­
160
161
162
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EXPEDITED
BILL
NO. 2-17
Approved:
#liner, President, County Council
Approved:
lsiah Leggett. County Executive
This is a correct copy ofCouncil action.
Date
Linda M. Lauer. Clerk of the Council
Date
-8­
 PDF to HTML - Convert PDF files to HTML files
Expedited Bill No.
_....!2=--..w17~
_ __
Concerning:
Employees' Retirement
System - Retirement Savings Plan
­
Employee Rights and Benefits ­
Amendments
Revised:2/10/2017 Draft NO'..l..1_ __
Introduced:
February 14. 2017
Enacted:
April 4. 2017
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date:
....!N~o!.Wn~e
_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Council President at the Request of the County Executive
AN EXPEDITED ACT
to:
(1)
amend the rights and benefits for certain employees under the Employees'
Retirement System to remain tax qualified under the Internal Revenue Code; and
(2)
amend the rights and benefits for certain employees under the Retirement Savings
Plan to remain tax qualified under the Internal Revenue Code; and
(3)
generally amend the Jaw regarding the County employee retirement plans.
By amending
Montgomery County Code
Chapter 33, Personnel and Human Resources
Sections 33-36, 33-42, 33-44, 33-45. 33-114, 33-118, and 33-120
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.
Deleted.from existing law or the hill hy amendment.
E"{isting law unqfli!Cted b.v bill.
The County Councilfor Montgomery County.
~lyfaryland
approves
the following Act:
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL NO. 2-17
Sec. 1. Sections 33-36, 33-42, 33-44, 33-45, 33-114, 33-118 and 33-120 are
2
3
4
amended as follows:
33-36. Establishment.
*
(d)
*
*
5
6
7
8
9
Unifonned Services Employment and Reemployment Rights Act.
Notwithstanding any provision of any plan, the County must provide
rights, contributions, benetits and service credit for qualified military
service as required by Section
414(u)
of the Internal Revenue
including subsection
414(u)(12).
Code~
]0
11
12
13
14
15
33-42. Amount of pension at normal retirement date or early retirement date.
*
(g)
*
*
Maximum annual contribution to elected officials' plan.
*
(3)
(A)
*
*
In this subsection (g), only:
for purposes of applying Section 415 of the Internal
Revenue Code, "compensation" has the same meaning as
provided in Treasury Regulation Section 1.415-2(d)(1),
including amounts contributed at the election of the
participant that are not includible in the gross income of
the participant, under Sections 402(g)(3), 125, 457, and
132(f)(4) of the Internal Revenue Code.:. Effective for
limitation years after December
.lL
2008, must include
amounts required to be included pursuant to Section
414(u)(12)
of the Internal Revenue Code; and
16
17
18
19
20
21
22
23
24
25
26
*
(h)
*
*
Maximum annual benefit.
Despite any other provision governing the
27
retirement system, the annual benefit of a member must not exceed the
-2­
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL NO. 2·17
28
29
30
31
limits of Internal Revenue Code Section 415 that apply to the plan. The
Chief Administrative Officer must freeze or reduce a member's annual
benefit to comply with this subsection. Effective for limitation years
after December 31, 2008, amounts required to be included under
Section 414(u)(l2) of the Internal Revenue Code must be included in
33
34
compensation for purposes of Section 415 of the Internal Revenue
Code.
35
36
37
*
*
(q)
*
*
*
33-44. Pension payment options and cost-of-Iiving adjustments.
*
38
39
40
41
42
43
44
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 paid directly to an
eligible retirement plan specified by the member in a direct rollover. A
member may not elect a direct rollover if the eligible rollover
distribution is less than $200.00. As used in this subsection:
(1)
direct rollover
means a payment from the retirement system to
the eligible retirement plan specified by the member;
[and]
45
46
(2)
eligible retirement plan means:
(A)
an individual retirement account described m Internal
Revenue Code Section 408(a);
(B)
an individual retirement annuity described in Internal
Revenue Code Section 408(b) (other than an endowment
contract);
(C)
(D)
a qualified trust;
an annuity plan described m Internal Revenue Code
Section 403(a);
·3·
47
48
49
50
51
52
53
54
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED
BILL
NO. 2-17
55
(E)
an eligible deferred compensation plan described m
Internal
Revenue
Code
Section 457(b)
which
IS
56
57
maintained by an eligible employer described in Internal
Revenue Code Section 457( e)(
1
)(A); or
(F)
an annuity described in Internal Revenue Code Section
403(b)~
58
59
60
61
ill
eligible rollover distribution
means any distribution of all or any
62
63
64
65
66
67
portion of the retirement benefit; except:
.tAl
any distribution which is one of
f!
series of substantially
equal periodic payments (not less frequently than
annually) made:
ill
for the life (or life expectancy) of the employee or
the joint lives (or joint life expectancies) of the
employee
and
the
employee's
designated
68
69
70
beneficiary; or
@
for
f!
specified period of
lQ
years or more; or
71
72
73
74
75
76
an
ill
any distribution to the extent such distribution is required
under Section 401 (a)(9) of the Internal Revenue Code, as
amended; and
beneficiary
includes
f!
non-spouse beneficiary. A non-spouse
beneficiary may make
f!
direct rollover only to an inherited
individual retirement account or annuity described in Sections
408(a) or 408(b) ofthe Internal Revenue Code that is established
on behalf of the non-spouse beneficiary. Such rollover must be
made in
f!
manner consistent with Section 402( c
)(11)
of the
Internal Revenue Code and any other applicable guidance.
77
78
79
80
81
*
*
-4­
*
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL NO. 2-17
82
33-45. Vested benefits and withdrawal of contributions.
83
84
*
(c)
*
*
Vested benefits.
(2)
85
86
87
For purposes of this subsection, vesting will be in accordance
with Section 401(a)(37) ofthe Internal Revenue Code. Effective
January
L
2007, the beneficiary of
~
member on
~
leave of
88
absence to perform military service with reemployment rights
described in Section
414(u)
ofthe Internal Revenue Code, where
the member cannot return to employment on account of his or
her death, must be entitled to any additional benefits (other than
benefit accruals relating to the period of qualified military
service) that would be provided under the employees' retirement
system had the member died as an active employee, in
accordance with Section 401(a)(37) of the Internal Revenue
Code. This provision applies to the elected officials' plan, the
guaranteed retirement income plan, and the optional and
integrated plans.
89
90
91
92
93
94
95
96
97
98
99
100
*
33-114.
Establishment.
*
*
101
102
103
104
105
106
107
108
*
(c)
*
*
provid~
Uniformed Services Employment and Reemployment Rights Act.
Notwithstanding any provision of a plan, the County must
rights, contributions, benefits and service credit for qualified military
service according to Section
414(u)
of the Internal Revenue Code:!
including subsection 414(u)(l2).
33-118. Maximum annual contribution.
(a)
Contribution limitations.
-5­
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL NO. 2-17
109
110
111
112
*
(3)
*
*
In this Section, for purposes of applying Section 415 of the
Internal Revenue Code, "compensation" has the same meaning
as provided in Treasury Regulation Section 1.415-2(d)( 1),
including amounts contributed at the election of the participant
that are not includible in the gross income of the participant,
under Sections 402(g)(3), 125, 457, and (effective January 1,
2001) 132(t)(4) of the Internal Revenue Code:. Effective for
limitation years after December
113
114
115
116
117
lL.
2008, compensation must
118
119
120
121
122
123
124
include amounts required to be included
Qy
Section 414(u)(l2)
of the Internal Revenue Code.
*
@
*
*
For purposes of this Section, limitation year means calendar year.
For purposes of applying this Section, all defined contribution plans
maintained
Qy
the County must be aggregated.
W
33-120.
Distribution of Benefit.
125
126
127
(
c)
*
Death benefits.
*
*
*
*
*
(2)
128
129
130
Vesting.
If a participant dies before the participant's separation
from County service, all amounts credited to the participant's
County contributions account are 100% vested regardless of the
participant's years of credited service. For purposes of this
subsection, vesting must be in accordance with Section
401(a)(37) of the Internal Revenue Code. Effective January
2007, the beneficiary of
~
participant on
~
131
132
133
134
.L
leave of absence to
135
perform military service with reemployment rights described in
- 6­
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED BILL NO. 2-17
136
137
Section 4l4(u) of the Internal Revenue Code, where the
participant cannot return to employment on account of his or her
death, must be entitled to any additional benefits that would be
provided under the retirement savings plan had the participant
died as an active employee, in accordance with Section
401(a)(37) of the Internal Revenue Code.
*
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
*
*
(g)
Direct rollover distributions.
Notwithstanding any provision of this
Division that would otherwise limit a participant's election under this
Section, a participant or beneficiary may elect in any manner prescribed
by the Chief Administrative Officer at any time to have any portion of
an eligible rollover distribution paid directly to an eligible retirement
plan specified by the participant in a direct rollover. As used in this
subsection:
*
ill
*
*
~
For purposes of this subsection, beneficiary includes
non­
spouse beneficiary. A non-spouse beneficiary may make
~
direct
rollover only to an inherited individual retirement account or
annuity described in Sections 408(a) or 408(b) of the Internal
Revenue Code that is established on behalf of the non-spouse
beneficiary. Such rollover shall be made in
~
manner consistent
with Section 402( c)( 11) of the Internal Revenue Code and any
other applicable guidance.
154
155
156
157
158
159
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 the date on which it
becomes law.
-7­
160
161
162
 PDF to HTML - Convert PDF files to HTML files
EXPEDITED
BILL
NO. 2-17
Approved:
#liner, President, County Council
Approved:
lsiah Leggett. County Executive
This is a correct copy ofCouncil action.
Date
Linda M. Lauer. Clerk of the Council
Date
-8­