Choosing a Retirement Program - Maryland State Retirement

STATE RETIREMENT AND PENSION SYSTEM Choosing a Retirement Program Highlights of the SRPS & ORP Retirement Programs Maryland Optional Retirement Plan Revised July 1, 201 1 ABOUT THIS BOOK About This This booklet addresses only those general provisions applicable Booklet under the two retirement programs available to eligible faculty and administrators and does not cover all the technical matters that may affect benefits. This booklet will only indicate the basic points for your consideration. Contact representatives of the State Retirement and Pension System (SRPS) for additional information on the defined benefit plan. Contact your Retirement Coordinator or the Optional Retirement Plan (ORP) vendors for questions on the defined contribution plan. Some Important The information presented in this booklet is subject to legislative Information

change and judicial interpretation and does not supersede nor restrict procedures or authority established under State statute. If there are questions of interpretation, the provisions of the State Personnel and Pensions Article of the Annotated Code of Maryland will control to resolve them. TABLE OF CONTENTS PAGE CHOOSING A RETIREMENT PROGRAM ......................................................................... 1 Planning For Your Retirement Your Retirement Program Options Making Your Selection Important Terms Some Things To Consider .................................................................................... 2 YOUR RETIREMENT PROGRAMS AT-A-GLANCE ............................................................ 3 HIGHLIGHTS OF THE SRPS PROGRAM .......................................................................... 5 How SRPS Benefits Are Calculated Contributions To The SRPS Investment Management Retirement Benefit Eligibility Benefit Calculation An Example ............................................................................................... 6 Early Retirement Benefit Service Under the Program ........................................................................ 6 Disability Retirement ........................................................................................... 7 Ordinary Disability Benefit Disability Earnings Limitation Accidental Disability Benefit Death Benefit ...................................................................................................... 8 Vested Retirement Allowance ............................................................................... 9 Payment Options Cost-of-Living Increases ..................................................................................... 10 HIGHLIGHTS OF THE OPTIONAL RETIREMENT PROGRAM (ORP) ................................. 11 How The ORP Benefits Are Determined Contributions To The ORP Investment Management Transferability Retirement Benefit Early Retirement Benefit .................................................................................... 12 Disability Benefit Death Benefit Vested Retirement Allowance Payment Options Cost-of-Living Increase SOME IMPORTANT INFORMATION .............................................................................. 13 Qualified Plans Social Security Transferring Benefits GLOSSARY OF IMPORTANT TERMS ............................................................................. 14 1 CHOOSING A RETIREMENT PROGRAM Planning For During your working years, you’re busy with your career, family and Your Retirement social life, but you also need to think about retirement. A comfortable, secure retirement requires planning. As a faculty member or administrator of one of the public higher education institutions of the State of Maryland or a Community College, you have the option of participating in one of two retirement programs. The purpose of this booklet is to explain how each program works so that you may choose the option that better meets your needs. Your You are eligible for one of two retirement programs. They are the: Retirement Program Options • Teachers’ Reformed Contributory Pension System or the Employees’ Reformed Contributory Pension System administered by the Board of Trustees for the Maryland State Retirement and Pension System (SRPS), or • Optional Retirement Program (ORP). Both programs offer income when you retire. The main difference between the two plans is that the SRPS guarantees a benefit amount while the ORP guarantees a state contribution rate equal to 7.25% of salary. Making Your You select a retirement program when you begin employment and your Selection election takes effect on the first of...

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