How SRPS Benefits
Are
Determined |
The SRPS is
the State Retirement and Pension System defined benefit plan that provides
benefits based on a specific
formula. This formula takes into account your years of creditable service
and your final average salary. When you retire, you have several payment
options to choose from. |
| Contributions to the
SRPS |
Each year, the State contributes a certain
percentage of your salary to the SRPS which is determined annually by
the
State System's actuary. You must contribute 5% of your annual salary.
|
Investment
Management |
Several professional investment managers who are
selected and monitored by the Board of Trustees of the SRPS invest the
assets of the SRPS. Any investment losses or funding shortfalls are the
responsibility of the State of Maryland. |
Benefit
Calculation
|
Your retirement benefit is calculated using the following formula:
.012 times Average Final Salary (AFS) times Years
of Credit to 6/30/98
plus
.018 times Average
Final Salary (AFS) times Years of Credit after 6/30/98
equals
Annual Basic Allowance
Annual Basic Allowance divided by 12 = Monthly Basic
Allowance
|
| Retirement Benefit
Eligibility |
Benefits are available through normal, early,
vested, or disability retirement. |
| Normal Retirement |
You may retire with unreduced benefits:
- at any age with 30 years of eligibility service,
- at age 62 with at least five years of eligibility services,
- at age 63 with four years of eligibility service,
- at age 64 with three years of eligibility service, or
- at age 65 or older with two years of eligibility service.
|
Vested
Retirement |
Former employees may receive benefits if they were vested (had at
least 5 years of eligibility service) when they terminated
employment.
Your benefit is calculated using your total creditable service
at termination, since no additional service is earned after termination.
If you terminate employment with at least 15 years of eligibility
service, you may elect a reduced monthly benefit beginning at age
55. Any benefit payable before age 62 will be reduced by 1/2% for
each month
you retire before age 62. If you wait until age 62, you receive a full
retirement allowance. |
Disability
Retirement |
There are two types of disability retirement
benefits: ordinary and accidental. To qualify for ordinary disability retirement,
you must be permanently disabled and have at least five years of
eligibility service. Accidental disability benefits are paid if you are
permanently and totally disabled as the direct result of a job-incurred
injury. |
Ordinary
Disability Benefit |
Creditable service is based on actual
service when disabled, plus years and months of service to age 62. If you
are working part-time when disabled, service is projected as
part-time. |
| Accidental Disability Benefit |
Unlike ordinary disability, accidental
disability does not make use of the normal service retirement formula. The
accidental benefit is based on two-thirds of an employee's average final
salary at the time of disability, regardless of the member's age. |
| Early Retirement |
If you retire early (age 55 with at least 15 years service), your
monthly benefit will be equal to your pension benefit, reduced by 1/2% for
each month you retire before age 62.
|
| Survivor/Death
Benefits |
If you die after retirement,
your benefit will be determined by the payment option you selected. If you
die as a former employee eligible for a vested benefit, your
contributions are paid in a lump sum to your designated beneficiary
(ies) or estate. If you die before retirement, your designated
beneficiary(ies) or estate will receive:
- a lump-sum benefit equal to your contribution plus interest (is you
contributed), and
- a lump sum equal to 100% of your salary if you had at least one year
of service or died in the performance of duty.
Your surviving spouse may have a choice of selecting a monthly
retirement benefit instead of the lump-sum payments described above,
provided:
- you were at least age 62 when you died, and you named your surviving
spouse as your sole primary beneficiary,
OR
- you had at least 25 years of eligibility service (regardless of age)
when you die and you named your surviving spouse as your sole primary
beneficiary,
OR
- you were at least age 55 when you died, had 15 or more years of
eligibility service, and named your surviving spouse as your sole
primary beneficiary.
You may change beneficiaries at any time before retirement by
submitting the applicable change form to your Campus Benefits Counselor.
|
How Benefits
Are
Paid |
You have several payment options from which to
choose. You may choose to receive monthly payments throughout your
lifetime with all benefits ending when you die. This option is called
the basic allowance and provides the maximum monthly benefit for you alone.
Under this option there is no beneficiary benefit. You may select an option
that reduces your monthly benefit but provides varying degrees of protection
for your beneficiary(ies). You may choose one of the following options:
- Option 1 guarantees a return of your contributions (if any)
with interest plus the State's contributions with interest. If you
die before receiving the full guaranteed amount, the remainder is paid
in
a single
lump-sum payment to your beneficiary(ies).
- Option 2 guarantees that at your death your entire monthly
benefit will continue to be paid to your beneficiary for the remainder
of their lifetime. Payments end upon the death of your beneficiary.
- Option 3 guarantees upon your death that your beneficiary
receives 50% of your monthly benefit for the remainder of their lifetime.
Payment ends upon the death of your beneficiary.
- Option 4 guarantees a return of your contributions with
interest. If you die before receiving the full guaranteed amount, the
remainder is paid in single lump sum to your beneficiary(ies).
- Option 5 guarantees upon your death that your beneficiary
receives your entire monthly benefit for their lifetime. However, if
your beneficiary dies before you, your reduced benefit is increased
to the amount you would have received if you elected your basic allowance.
- Option 6 guarantees your surviving beneficiary a lifetime
monthly benefit equal to 50% of your monthly benefit. However, if your
beneficiary dies before you, your reduced benefit is increased to the
amount you would have received if you elected your basic allowance.
|
Cost-of-Living
Increases |
When you retire under the SRPS program, you may
receive an annual cost-of-living increase to your basic retirement
benefit. The amount is based on increases in the average Consumer Price
Index -- All Urban Index as determined by the US. Department of Labor.
Members of the Contributory Pension System receive a compounded COLA, meaning
that the increase is applied to the current allowance. However, your increase
cannot exceed 3% per year. You will receive
your
cost-of-living
increase
each
July
1,
provided you
have
been
retired for at least one full year as of July 1. |
