Md. Code Ann., State Pers. & Pens. § 21-304 – Adjustments to State, teacher, and employee contributions

(a)
1. (1) In this section the following words have the meanings indicated.
2. (2) With respect to local employees, “aggregate annual earnable compensation” means the total annual earnable compensation payable by a local employer to all of its local employees, calculated as of June 30 of the second prior fiscal year before the fiscal year for which the calculation is made under this section, adjusted by any actuarial assumed salary increases that were used in the actuarial valuation prepared under § 21-125(b) of this title for the immediate prior fiscal year.
3. (3) “Local employee” means a member of the Teachers' Retirement System or the Teachers' Pension System who is an employee of a day school in the State under the authority and supervision of a county board of education or the Baltimore City Board of School Commissioners, employed as:
  1. (i) a clerk;
  2. (ii) a helping teacher;
  3. (iii) a principal;
  4. (iv) a superintendent;
  5. (v) a supervisor; or
  6. (vi) a teacher.
4. (4) “Local employer” means a county board of education or the Baltimore City Board of School Commissioners.
5. (5) “State member” does not include a member on whose behalf a participating governmental unit is required to make an employer contribution under § 21-305 or § 21-306 of this subtitle.
6. (6) “Total employer contribution for local employees” means that portion of the employer contribution calculated under subsection (b) of this section that is attributable to all local employees.
(b)
1. (1) Subject to paragraphs (4) and (5) of this subsection, each fiscal year, on behalf of the State members of each State system, the State shall pay to the appropriate accumulation fund an amount equal to or greater than the sum of the amount, if any, required to be included in the budget bill under § 3-501(c)(2)(ii) of this article and the product of multiplying:
  1. (i) the aggregate annual earnable compensation of the State members of that State system; and
  2. (ii) the sum of the normal contribution rate and the accrued liability contribution rate for State members of that State system, as determined under this section.
2. (2) The amount determined under paragraph (1) of this subsection for each State system shall be based on an actuarial determination of the amounts that are required to preserve the integrity of the funds of the several systems using:
  1. (i) the entry-age actuarial cost method; and
  2. (ii) actuarial assumptions adopted by the Board of Trustees.
3. (3) For the purpose of making the determinations required under this section:
  1. (i) the Employees' Retirement System, the Employees' Pension System, the Correctional Officers' Retirement System, and the Legislative Pension Plan shall be considered together as one State system; and
  2. (ii) the Teachers' Retirement System and the Teachers' Pension System shall be considered together as one State system.
4. (4)
  1. (i) Subject to § 21-309.1 of this subtitle, beginning on July 1, 2012, and each fiscal year thereafter, each local employer shall pay to the appropriate accumulation fund an amount equal to the local share of the total employer contribution for local employees as provided in this paragraph.
  2. (ii) For fiscal years 2013 through 2016, each local employer shall pay to the Board of Trustees its local share, which shall be equal to the following amounts:
    Local Employer
    Fiscal Year 2013
    Fiscal Year 2014
    Fiscal Year 2015
    Fiscal Year 2016
    Allegany
    1,487,742
    1,885,754
    2,412,465
    2,773,667
    Anne Arundel
    11,493,684
    14,568,567
    18,637,716
    21,428,297
    Baltimore City
    12,922,862
    16,380,092
    20,955,217
    24,092, 793
    Baltimore
    15,755,802
    19,970,922
    25,549,002
    29,374,395
    Calvert
    2,835,938
    3,594,631
    4,598,648
    5,287,193
    Caroline
    793,934
    1,006,334
    1,287,413
    1,480,175
    Carroll
    4,005,782
    5,077,441
    6,495,621
    7,468,196
    Cecil
    2,459,819
    3,117,889
    3,988,747
    4,585,973
    Charles
    3,936,516
    4,989,645
    6,383,304
    7,339,061
    Dorchester
    656,543
    832,186
    1,064,625
    1,224,028
    Frederick
    5,893,461
    7,470,128
    9,556,610
    10,987,499
    Garrett
    664,714
    842,544
    1,077,874
    1,239,262
    Harford
    5,529,741
    7,009,102
    8,966,815
    10,309,396
    Howard
    9,821,066
    12,448,477
    15,925,463
    18,309,945
    Kent
    366,147
    464,102
    593,730
    682,628
    Montgomery
    27,227,553
    34,511,689
    44,151,153
    50,761,802
    Prince George's
    19,554,579
    24,785,979
    31,708,954
    36,456,662
    Queen Anne's
    1,105,527
    1,401,286
    1,792,679
    2,061,093
St. Mary's
1. (iii) Beginning in fiscal year 2017, each local employer shall pay to the Board of Trustees its local share equal to the normal contribution rate for the Teachers' Retirement System and the Teachers' Pension System multiplied by the aggregate annual earnable compensation of the local employees of that local employer.
2. (5) Except as provided in paragraph (6) of this subsection, the difference between the total employer contribution for local employees and the local share of the total employer contribution for all local employees shall be the obligation of the State.
3. (6)
  1. (i) Subject to § 21-309.2 of this subtitle and as provided under subparagraph (ii) of this paragraph, beginning in fiscal year 2027, each county government shall pay to the Board of Trustees the following amounts:
    County Government
    Allegany
    1,139,988
    Anne Arundel
    13,344,016
    Baltimore City
    12,041,167
    Baltimore
    15,122,563
    Calvert
    2,284,705
    Caroline
    785,750
    Carroll
    3,661,920
    Cecil
    1,963,691
    Charles
    3,900,924
    Dorchester
    794,625
    Frederick
    7,899,429
    Garrett
    428,865
    Harford
    5,297,751
    Howard
    9,696,329
    Kent
    255,179
    Montgomery
    28,754,528
    Prince George's
    18,675,337
    Queen Anne's
    973,835
2,485,697
3,150,691
4,030,711
4,634,220
Somerset
480,124
608,570
778,550
895,121
Talbot
628,456
796,586
1,019,080
1,171,665
Washington
3,094,113
3,921,875
5,017,294
5,768,522
Wicomico
2,173,593
2,755,091
3,524,616
4,052,348
Worcester
1,271,561
1,611,739
2,061,914
2,370,640
St. Mary's
1. (ii) 1. For fiscal year 2026, each county government shall pay to the Board of Trustees on or before January 1, 2026, the amount required under subparagraph (i) of this paragraph.
  1. 2. Beginning in fiscal year 2027, each county government shall pay to the Board of Trustees on or before each September 1 the amount required under subparagraph (i) of this paragraph.
2. (iii) Each fiscal year, the amounts paid under subparagraph (i) of this paragraph shall reduce the obligations of the State with respect to the Teachers' Pension System and the Teachers' Retirement System by the same amounts.
2,205,319
Somerset
442,575
Talbot
651,179
Washington
3,279,909
Wicomico
2,379,362
Worcester
1,049,543
(c)
1. (1) As part of each actuarial valuation, the actuary shall determine the normal contributions, net of member contributions, on account of the State members of each State system.
2. (2) For each State system, the normal contribution rate equals the fraction that has:
  1. (i) as its numerator, the sum of the normal contributions determined under this subsection; and
  2. (ii) as its denominator, the aggregate annual earnable compensation of the State members of the State system.
(d)
1. (1) Beginning July 1, 2023, each year the Board of Trustees shall set contribution rates for each State system that shall amortize:
  1. (i) all unfunded liabilities or surpluses accrued as of June 30, 2023, over the time remaining until June 30, 2039; and
  2. (ii) any new unfunded liabilities or surpluses that have accrued from July 1 of the preceding fiscal year over closed periods of:
    1. 1. 15 years for experience gains and losses;
    2. 2. 25 years for the effect of changes in actuarial assumptions and methods;
    3. 3. at least 10 but not exceeding 15 years for the effect of any new legislation; and
    4. 4. 5 years for accrued liability resulting from legislation providing incentives for the early retirement of State employees.
2. (2) On recommendation of the system's actuary, for the purpose of mitigating tail volatility in the annual contribution rate, the Board of Trustees may adjust the period of amortization under paragraph (1)(ii) of this subsection for liabilities or surpluses accrued in any fiscal year.
(e) The Board of Trustees may not certify contribution rates under this section that would result in a contribution rate below the normal cost, as determined by the system's actuary.

Added by Acts 1994, c. 6, § 2, eff. Oct. 1, 1994. Amended by Acts 1996, c. 353, § 1, eff. Oct. 1, 1996; Acts 1997, c. 736, § 1, eff. June 1, 1997; Acts 1998, c. 530, § 2, eff. July 1, 1998; Acts 1998, c. 675, § 1, eff. June 1, 1998; Acts 2001, c. 583, § 1, eff. July 1, 2001; Acts 2002, c. 19, § 1, eff. April 9, 2002; Acts 2002, c. 440, § 4, eff. July 1, 2002; Acts 2003, c. 21, § 1, eff. April 8, 2003; Acts 2004, c. 25, § 1, eff. April 13, 2004; Acts 2007, c. 5, § 7, eff. March 22, 2007; Acts 2011, c. 397, § 1, eff. June 1, 2011; Acts 2012, c. 680, § 1, eff. July 1, 2012; Acts 2012, 1st Sp. Sess., c. 1, § 1, eff. June 1, 2012; Acts 2013, c. 475, § 1, eff. July 1, 2013; Acts 2013, c. 476, § 1, eff. July 1, 2013; Acts 2015, c. 489, § 3, eff. July 1, 2015; Acts 2023, c. 195, § 1, eff. July 1, 2023; Acts 2023, c. 196, § 1, eff. July 1, 2023; Acts 2025, c. 604, § 1, eff. June 1, 2025; Acts 2026, c. 6, § 1, eff. June 1, 2026.

Formerly Art. 73B, § 1-306.