11-11

Sec. 1. Sections 33-39, 33-40, 33-44, 33-116, [[and]] 33-117, 33-118, and 33-131 are amended as follows:

33-39. Member Contributions and Credited Interest.

(a) Member contributions. Each member of the retirement system must contribute a portion of the member’s regular earnings through regular payroll deductions.

(1) Member Contributions to the Optional Retirement Plan. A member of the Optional Retirement Plan must contribute the following percentage of regular earnings:

(A) Group A or H member, [6] 7 percent for service beginning on the first pay period after June 30, 2011 and 8 percent for service beginning on the first pay period after June 30, 2012;

(B) Group B member, 7 percent;

(D) Group E, F, or G member, [8½] 9½ percent for service beginning on the first pay period after June 30, 2011 and 10½ percent for service beginning on the first pay period after June 30, 2012.

(2) Member Contributions to the Integrated Retirement Plan. A member of the Integrated Retirement Plan must contribute the following percentage of regular earnings:

(A) Group A, [4] 5 percent for service beginning on the first pay period after June 30, 2011 and 6 percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base, and [6] 7 percent for service beginning on the first pay period after June 30, 2011 and 8 percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base;

(B) Group B, 4½ percent up to the maximum Social Security wage base, and 7 percent of regular earnings that exceed the wage base;

(C) Group E, [4¾] 5¾ percent for service beginning on the first pay period after June 30, 2011 and 6¾ percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base, and [8½] 9½ percent for service beginning on the first pay period after June 30, 2011 and 10½ percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base;

(D) Group F, [4 ¾] 5¾ percent for service beginning on the first pay period after June 30, 2011 and 6¾ percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base and [8½] 9½ percent for service beginning on the first pay period after June 30, 2011 and 10½ percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base;

(E) Group G:

(i) [5½] 6½ percent for service beginning on the first pay period after June 30, 2011 and 7½ percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base, and [9¼] 10¼ percent for service beginning on the first pay period after June 30, 2011 and 11¼ percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base;

(ii) starting in the 25th year from the member’s leave accrual date under the County payroll system, [4¾] 5¾ percent for service beginning on the first pay period after June 30, 2011 and 6¾ percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base, and [8½] 9½ percent for service beginning on the first pay period after June 30, 2011 and 10½ percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base on and after the member’s 25th year of credited service;

(F) Group H, [4] 5 percent for service beginning on the first pay period after June 30, 2011 and 6 percent for service beginning on the first pay period after June 30, 2012 up to the maximum Social Security wage base and [6] 7 percent for service beginning on the first pay period after June 30, 2011 and 8 percent for service beginning on the first pay period after June 30, 2012 of regular earnings that exceed the wage base.

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(4) Member contributions to the guaranteed retirement income plan.

(A) A non-public safety employee member in the guaranteed retirement income plan must contribute 4% of regular earnings less than or equal to the Social Security wage base and 8% of regular earnings that exceed the Social Security wage base.

(B) A public safety employee member in the guaranteed retirement income plan must contribute 3% of regular earnings less than or equal to the Social Security wage base and 6% of regular earnings that exceed the Social Security wage base.

(C) For service beginning on the first pay period after June 30, 2011 and before the first pay period beginning after July 1, 2012, a member may contribute an additional 2% of regular earnings on an after-tax basis by making an irrevocable election in writing on or before September 1, 2011.

(D) To the extent allowed under Section 414(h)(2) of the Internal Revenue Code, the County must “pick up” (as described in the Internal Revenue Code) member contributions to the guaranteed retirement income plan. A member is always vested in the member’s contributions.

[[(D)]] (E) When a member rejoins County service after military service that qualifies under Section 33-41(q) as credited service, the County must credit the member with the amount that the member would have contributed if the member had worked for the County during military service. Contribution credits for military service must be based on the regular earnings the member would have earned during military service. If the regular earnings are not reasonably ascertainable, the credit must be based on the member’s regular earnings during a period immediately preceding the military service. The averaging period is 12 months, or the full length of the member’s County service, whichever is shorter. The member must not receive any retroactive credited interest on the contribution credits. The County must not credit a member with a discretionary after-tax contribution under subparagraph C unless the member elects to make up the contribution under Internal Revenue Code Section 414(u), as amended.

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33-40. Employer Contributions.

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(d) Elected officials' plan. Subsections 33-40(a), (b), and (c) do not apply to the elected officials' plan. Instead, the following provisions apply:

(1) The County must contribute to the elected officials' plan in monthly installments, on behalf of each elected officials' participant, an amount equal to [8] [[6]] 8 percent of the elected officials' participants' regular earnings. The county's elected officials' contributions are to be adjusted to take into account any forfeiture under subsection 33-40(d)(2)(D). In determining the amount of the County elected officials' contributions, only an elected officials' participant's regular earnings earned while that elected officials' participant made required elected officials' participant contributions are counted.

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(e) Guaranteed Retirement Income Plan.

(1) Each pay period, the County must credit to each non-public safety member’s guaranteed retirement income plan account an amount equal to [8%] 6% for service beginning on the first pay period after June 30, 2011 and 8% for service beginning on the first pay period after June 30, 2012 of the member’s regular earnings. [[The County must make a one-time credit equal to .36% of the member’s fiscal year 2010 regular earnings to the member’s guaranteed retirement income plan account on the second pay period in July 2010 for a member who is on the County payroll as of June 30, 2009 and who is also on the County payroll as of June 30, 2010.]] Interest must be credited at an annual rate of 7.25% on the County contribution credits. If the annual 7.25% interest rate does not comply with applicable law, the third segment rate described in Internal Revenue Code Section 430(h)(2)(G) or any successor provision must apply. Interest must be credited to a member’s guaranteed retirement income plan account balance on a monthly basis as of the last day of the month.

(2) Each pay period, the County must credit to each public safety member’s guaranteed retirement income plan account an amount equal to [10%] 8% for service beginning on the first pay period after June 30, 2011 and 10% for service beginning on the first pay period after June 30, 2012 of the member’s regular earnings. Interest must be credited at an annual rate of 7.25% on the County contribution credits. If the annual 7.25% interest rate does not comply with applicable law, the third segment rate described in Internal Revenue Code Section 430(h)(2)(G) or any successor provision must apply. Interest must be credited to a member’s guaranteed retirement income plan account balance on a monthly basis as of the last day of the month.

33-44. Pension payment options and cost-of-living adjustments.

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(c) Cost-of-living adjustment. A retired member or beneficiary, including the surviving spouse or domestic partner of a group D member or other beneficiary who survives the member under a pension option or who is otherwise eligible to receive benefits, must receive an annual cost-of-living adjustment in pension benefits.

(1) Each retired member or beneficiary [[shall]] must have a cost-of-living base which [[shall]] must be the Consumer Price Index most recently preceding the date of the member's retirement or death.

(2) The Consumer Price Index to be used for the fiscal year in which the cost-of- living adjustment is payable [[shall]] must be the index calculated for the month last preceding the end of the fiscal year immediately preceding the fiscal year in which the adjustment is to be effective.

(3) The percentage cost-of-living adjustment of pension benefits must be obtained by dividing the most recent index determined under paragraph (2) by the next preceding index multiplied by 100 less 100.

(A) A member enrolled before July 1, 1978, must receive the full cost-of- living adjustment.

(B) A member enrolled on or after July 1, 1978, must receive 100 percent of the change in the consumer price index up to 3 percent, and 60 percent of any change in the consumer price index greater than 3 percent, up to a total adjustment of 7 ½ percent in any year. The 7 ½ percent annual limit does not apply to:

(i) a retired member who is disabled; or

(ii) a pensioner aged 65 or older for a fiscal year beginning after the date the pensioner reaches age 65.

(4) For the purpose of this section, “Consumer Price Index” [[shall mean]] means, beginning January 1, 1978, the Consumer Price Index for All Urban Consumers issued for the Washington, D.C. Metropolitan Area (all items) as published by the United States Department of Labor, Bureau of Labor Statistics (for months before 1978, the Consumer Price Index published previously for urban wage earners and clerical workers for such months [[shall]] must be applicable.)

(5) Pension benefits are subject to decreases in the Consumer Price Index. In no instance, however, [[shall]] must a retired member or beneficiary receive less than the amount of pension benefits for which eligible at the time of the member's retirement.

(6) Notwithstanding the provisions of this Section, the cost-of-living adjustment must not exceed 2.5% for:

(A) credited service beginning on the first pay period after June 30, 2011; or

(B) a disability retirement pension based upon a disability occurring after June 30, 2011.

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33-116. Participant contributions.

(a) Percent of participant contributions.

(1) (A) Group I. Each participant in Group I must contribute, through regular payroll deductions, 4% of regular earnings less than or equal to the Social Security wage base and 8% of regular earnings that exceed the Social Security wage base.

(B) Group II. Each participant in Group II must contribute, through regular payroll deductions, 3% of regular earnings less than or equal to the Social Security wage base and 6% of regular earnings that exceed the Social Security wage base.

(C) For service beginning on the first pay period after June 30, 2011 and before the first pay period beginning after July 1, 2012, a participant may contribute an additional 2% of regular earnings on an after-tax basis by making an irrevocable election in writing on or before September 1, 2011.

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(4) The County must contribute on behalf of a participant who rejoins County service after military service that qualified under Section 33-119(b) as credited service an amount equal to the amount that the participant could have contributed if the participant had worked for the County during the period of military service.

(A) Contributions for the period of military service must be based on the regular earnings the participant would have earned during the period of military service. If this amount of regular earnings is not reasonably ascertainable, the contribution must be based on the participant’s average regular earnings during a period immediately preceding military service. The averaging period is 12 months, or the full length of the participant’s County service, whichever is shorter.

(B) Contributions under this paragraph count toward the maximum annual contribution limits under the Internal Revenue Code for the year for which the contributions relate.

(C) The participant is not entitled to any retroactive allocation of forfeitures or any retroactive crediting of earnings because of contributions under this subparagraph.

(D) The County must not credit a participant with a discretionary after-tax contribution under subsection (a)(1)(C) unless the participant elects to make up the contribution under Internal Revenue Code Section 414(u), as amended.

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33-117. Employer Contributions.

(a) Amount of employer contributions.

(1) Group I participants. The County must contribute to the retirement savings plan in quarterly installments, on behalf of each Group I participant, an amount equal to [8%] 6% for service beginning on the first pay period after June 30, 2011 and 8% for service beginning on the first pay period after June 30, 2012 of that participant's regular earnings while a Group I participant during a plan year. [[The County must make a one-time contribution of .36% of the participant’s fiscal year 2010 regular earnings on the second pay period in July 2010 for a Group I participant on the County payroll as of June 30, 2009 and who is also on the County payroll as of June 30, 2010.]]

(2) Group II participants. The County must contribute to the retirement savings plan in quarterly installments, on behalf of each Group II participant, an amount equal to [10%] 8% for service beginning on the first pay period after June 30, 2011 and 10% for service beginning on the first pay period after June 30, 2012 of that participant's regular earnings while a Group II participant during a plan year. [[The County must make a one-time contribution of .36% of the participant’s fiscal year 2010 regular earnings on the second pay period in July 2010 for a Group II participant on the County payroll as of June 30, 2009 and who is also on the County payroll as of June 30, 2010.]]

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33-118. Maximum Annual Contribution

(a) Contribution limitations.

(1) Notwithstanding any other provision in this Division, to the extent required under the Internal Revenue Code, the annual additions described in this Section that are allocated in any limitation year to the retirement accounts of any participant must not exceed the lesser of:

(A) $30,000, effective January 1, 1995, or $40,000, effective January 1, 2002 (the “dollar limitation”), as adjusted by the Internal Revenue Service from time to time to reflect cost of living increases; or

(B) 25 percent of the participant's compensation as defined below, or 100 percent of the participant's compensation, effective January 1, 2002, (the "percentage limitation").

(2) For purposes of this Section, the annual addition must be:

(A) County contributions;

(B) required participant contributions; [[and]]

(C) forfeitures, but only if the retirement savings plan permits forfeitures to be added to the participant's account; and

(D) after-tax contributions.

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33-131. Amount of benefits.

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(c) Cost-of-living adjustments. The administrator must make a cost-of-living adjustment annually to the disability benefits paid to any public safety employee under this plan. The cost of living adjustment must be equal to 60% of the annual increase in the Baltimore-Washington Area Consumer Price Index. However, the disability cost-of-living increase must not increase the disability benefits by more than 3% each 12-month period. A non-public safety employee must not receive a cost-of-living adjustment for any benefit paid under this plan. The cost-of-living adjustment for a disability benefit based upon a disability occurring after June 30, 2011 must not exceed 2.5%.

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 July 1, 2011 except as otherwise provided. For a member of the Optional Plan, Integrated Plan, [[Elected Officials’ Plan,]] or Guaranteed Retirement Income Plan holding the office of County Executive, Councilmember, or Sheriff, the amendments to Sections 33-39(a)(1), 33-39(a)(2), 33-44(c), [[, 33-40(d)(1)]] and 33-40(e)(1) take effect on December 1, 2014. For a member of the Optional Plan, Integrated Plan, [[Elected Officials’ Plan,]] or Guaranteed Retirement Income Plan holding the office of State’s Attorney, the amendments to Sections 33-39(a)(1), 33-39(a)(2), 33-44(c), [[, 33-40(d)(1)]] and 33-40(e)(1) take effect on January 5, 2015.

Approved: