Expedited Bill No. _-""'2--'1...!...7_ _ __
Concerning:
Employees' Retirement
System - Retirement Savings Plan­
Employee Rights and Benefits ­
Amendments
Revised:2/10/2017 Draft No.. .!. .1_ _ __
Introduced:
February 14, 2017
Enacted:
April 4, 2017
Executive:
April 13, 2017
Effective:
April 13, 2017
Sunset Date:
....!N..!..:o~n!.!:<e'---
_ _ _ _ __
Ch. _7_, Laws of Mont. Co. 2017
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 law 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.
Deleted/rom existing law hy original hill.
Added hy amendment.
Deleted,from existing law or the bill by amendment.
Er:isting law unqffected h.v bill.
The County Council for Montgomery County, Maryland approves the following Act:
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EXPEDITED BILL NO. 2-17
Sec.
1.
Sections 33-36, 33-42, 33-44, 33-45, 33-114, 33-118 and 33-120 are
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amended as follows:
33-36. Establishment.
*
(d)
*
*
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Uniformed Services Employment and Reemployment Rights Act.
Notwithstanding any provision of any plan, the County must provide
rights, contributions, benefits and service credit for qualified military
service as required by Section 414(u) of the Internal Revenue Code,1
including subsection 414(u)(12).
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33-42. Amount of pension at normal retirement date or early retirement date.
*
(g)
*
*
*
*
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14
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(0(4) of the Internal Revenue Code.:. Effective for
limitation years after December
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lL.
2008, must include
amounts required to be included pursuant to Section
414(u)(12) of the Internal Revenue Code; and
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*
(h)
*
*
Maximum annual benefit.
Despite any other provision governing the
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retirement system, the annual benefit of a member must not exceed the
limits of Internal Revenue Code Section 415 that apply to the plan. The
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EXPEDITED BILL NO. 2-17
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Chief Administrative Officer must freeze or reduce a member's annual
benefit to comply with this subsection. Effective for limitation years
after December
lL.
2008, amounts required to be included under
Section 414(u)(l2) of the Internal Revenue Code must be included in
compensation for purposes of Section 415 of the Internal Revenue
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34
Code.
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36
*
*
(q)
*
*
*
*
33-44. Pension payment options and cost-or-living adjustments.
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40
Direct rollover distributions.
A member or beneficiary may elect, in
any manner prescribed by the ChiefAdministrative 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:
( I)
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direct rollover
means a payment from the retirement system to
the eligible retirement plan specified by the member;
(and)
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(2)
eligible retirement plan means:
(A)
an individual retirement account described
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
Section 403(a);
(E)
an eligible deferred compensation plan described
Internal
Revenue
-3­
In
In
In
Internal
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54
Internal Revenue Code
55
56
Code
Section 457(b) which
IS
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EXPEDITED BILL NO. 2-17
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maintained by an eligible employer described in Internal
Revenue Code Section 4S7(e)(1)(A); or
(F)
an annuity described in Internal Revenue Code Section
403(b)~
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ill
eligible rollover distribution
means any distribution of all or any
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portion of the retirement benefit; except:
®
any distribution which is one of !! series of substantially
equal periodic payments (not less frequently than
annually) made:
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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
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beneficiary; or
@
ill}
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for!! specified period of
lQ
years or more; or
any distribution to the extent such distribution is required
under Section 401 (a)(9) of the Internal Revenue Code, as
amended; and
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ill
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) ofthe Internal Revenue Code that is established
on behalf of the non-spouse beneficiary. Such rollover must be
made in !! manner consistent with Section 402(c)(11) of the
Internal Revenue Code and any other applicable guidance.
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*
*
*
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33-45. Vested benefits and withdrawal of contributions.
*
(c)
*
-4­
*
Vested benefits.
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EXPEDITED BILL NO. 2-17
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*
(2)
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*
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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
89
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.
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*
33-114.
Establishment.
*
*
*
(c)
*
*
Uniformed Services Employment and Reemployment Rights Act.
Notwithstanding any provision of a plan, the County must provide
rights, contributions, benefits and service credit for qualified military
service according to Section
414(u)
of the Internal Revenue
including subsection 414(
u)(12).
Code~
33-118. Maximum annual contribution.
(a)
Contribution limitations.
*
(3)
*
*
In this Section, for purposes of applying Section 415 of the
Internal Revenue Code, "compensation" has the same meaning
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EXPEDITED BILL NO. 2-17
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114
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as provided in Treasury Regulation Section 1.415-2(d)(l),
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(£)(4) of the Internal Revenue Code:. Effective for
limitation years after December
lL
2008, compensation must
include amounts required to be included
&Y
Section 414(u)(l2)
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121
of the Internal Revenue Code.
*
@
*
*
122
For purposes of this Section, limitation year means calendar year.
For purposes of applying this Section, all defined contribution plans
maintained
&Y
the County must be aggregated.
ill
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125
33-120.
Distribution of Benefit.
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127
*
(c)
*
*
*
*
Death benefits.
*
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(2)
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
40 l(a)(37) of the Internal Revenue Code. Effective January
.L
2007, the beneficiary of
~
participant on
~
131
132
1
-'-'
'"1'"1
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leave of absence to
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perform militID service with reemployment rights described in
Section 414(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
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EXPEDITED BILL NO. 2-17
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died as an active employee, in accordance with Section
401(a)(37) of the Internal Revenue Code.
*
(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.
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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.
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EXPEDITED BILL
NO. 2-17
Approved:
Rog
#liner, President, County Council
Approved:
lsi
This is a correct copy qj'Council action.
~/h,~
Date
I
Linda M. Lauer, Clerk of the Council
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