§ 1. Definitions.
(1) Retirement System.
"Retirement System" shall mean the Employees' Retirement System of the City of Baltimore as defined in § 2 of this subtitle.
(2) Employee.
(i) In general.
"Employee" means, except as provided in subparagraph (ii) of this paragraph, any of the following:
(A) any permanent officer or employee of the Mayor and City Council of Baltimore, including any officer or employee of an agency, department, unit, subdivision, or instrumentality of the Mayor and City Council;
(B) any permanent officer or employee, by whatever authority appointed, whose salary or compensation is paid by the Mayor and City Council of Baltimore, except when the City acts only as an agent for the convenience of disbursing payroll funds;
(C) any employee of the Baltimore City Public School System who is not eligible to participate in the Maryland State Retirement and Pension System;
(D) any employee of the Maryland Department of Public Safety and Correctional Services who:
1. was a City employee working at the Baltimore City Jail when the State assumed administration of the Jail in July 1991; and
2. on becoming a State employee, elected to remain a member of this System;
(E) any employee of the Baltimore Museum of Art or of the Walters Art Museum who was employed by either museum on or before June 30, 2014, except that, after termination of that employment, if the employee is rehired on or after July 1, 2014, the employee no longer is an "employee" for purposes of this subtitle; and
(F) the State's Attorney for Baltimore City.
(ii) Exclusions.
"Employee" does not include:
(A) any "elected official", as defined in § 17A(2) of this article for purposes of membership in the Elected Officials' Retirement System of the City of Baltimore; or
(B) any "employee", as defined in § 30(2) of this article for purposes of membership in the Fire and Police Employees' Retirement System of the City of Baltimore.
(iii) In cases of doubt.
(A) In all cases of doubt, the Board of Trustees determines who is an "employee" under this subtitle.
(B) A determination by the Board under this subparagraph is final and binding on all persons, subject to the rights of appeal and review under § 15 of this subtitle.
(3) Member.
"Member" shall mean any person included in the membership of the system as provided in §§ 3 and 9 of this subtitle.
(4) Board of Trustees.
"Board of Trustees" shall mean the Board, provided in § 5 of this subtitle, to administer the Retirement System.
(5) Minor child.
"Minor child" means the child of a member, former member, or retiree who has not attained age 22.
(6) Service.
"Service" shall mean service as an employee as described in paragraph (2) of this section, and paid for by the City of Baltimore, while a member of the Employees' Retirement System; and any service purchased, repurchased or transferred, by appropriate deposit or redeposit of funds, plus interest, to cover such periods, or any service credited under any other section of this subtitle and under Maryland State law.
(7) Prior service.
"Prior service" shall mean service rendered prior to January 1, 1926 for which credit is allowable under the provision of § 4(a) of this subtitle, subject to the qualifications set forth in § 4(d) of this subtitle.
(8) Beneficiary.
"Beneficiary" shall mean any person in receipt of a pension, an annuity, a retirement allowance, or other benefit as provided by this subtitle.
(9) Regular interest.
(i) "Regular interest" means:
(A) for the accumulation of Class A or Class B member contributions, interest at 5.25% per year, compounded annually; and
(B) for the accumulation of Class C or Class D member contributions, interest at 3% per year, compounded annually.
(ii) "Regular interest" for valuation purposes means:
(A) for fiscal years beginning on or before July 1, 2015:
1. 7.75% before benefit payments commence; and
2. 6.55% after benefit payments commence;
(B) for fiscal years beginning on July 1, 2016, and on July 1, 2017:
1. 7.5% before benefit payments commence; and
2. 6.5% after benefit payments commence; and
(C) for fiscal years beginning on or after July 1, 2018:
1. 7.0% before benefit payments commence; and
2. 6.5% after benefit payments commence.
(iii) "Regular interest" for the purpose of determining actuarial equivalents means interest at 4.5% per year, compounded annually.
(10) Accumulated contributions.
"Accumulated contributions" means the sum of all the amounts deducted from the earnable compensation of a member, and any other additional amounts contributed by the member as provided in this subtitle, together with regular interest as provided in paragraph (9) of this section and pursuant to the provisions of §§ 7, 8 and 9 of this subtitle.
(11) Average final compensation.
Average final compensation:
(i) For any member who terminates employment with the City prior to January 1, 1994, except as noted in subparagraphs (a) and (b) below, "average final compensation" shall mean the average annual earnable compensation for any period of 3 successive years of service during which his earnable compensation was highest; or if he had less than 3 years of service, then the average annual earnable compensation during his total years of service. "Earnable compensation" shall mean the annual salary authorized for the member. It shall not include overtime pay, differential pay, environmental pay, hazardous duty pay, pay for conversion of leave or other fringe benefits, or any like additional payments.
Beginning with the 1st day of the 1st full pay period after July 1, 1975, the provisions of this paragraph shall apply to members who retired on or after April 19, 1974, up to and including June 30, 1975. However, no retroactive payments shall be made to members who retired before July 1, 1975.
Beginning July 1, 1975, the provisions of this paragraph shall apply to all members who retire on or after July 1, 1975.
(a) For members who retired during the period beginning with July 1, 1973, up to and including April 18, 1974, the term "average final compensation" shall be the same as is provided in paragraph (11)(i); however, no retroactive payments shall be made with respect to any period prior to the 1st day of the 1st full pay period after July 1, 1975. It is further provided with respect to members who retired during the period July 1, 1973, through April 18, 1974, inclusive, or their beneficiaries, that they shall receive the adjustment required under this paragraph to the extent that it exceeds the benefit provided under § 6(n) and § 6(o) of this article as amended from time to time.
(b) Beginning July 1, 1984, any member who retired between January 1, 1926 and April 18, 1974, or the member's beneficiary, shall have the retirement allowance portion of the total retirement benefit recalculated on the member's average final compensation as defined in § 1(11)(i). The total difference between the average final compensation calculated at the time of retirement and the calculation based on average final compensation based on 3 years shall be added to the present annual allowance being received. However, no retroactive payments for any increases shall be made to eligible beneficiaries of deceased members and members retired before April 19, 1974.
(ii) For any member who is an employee on or after January 1, 1994, "average final compensation" means the average of the member's annual earnable compensation on January 1 for 3 successive years of service when the member's earnable compensation is the highest. If the member is in service on January 1 for less than 3 successive years, then average final compensation means the average annual earnable compensation during this total years of service. "Earnable compensation" means the annual salary authorized for the member. It does not include overtime pay, differential pay, environmental pay, hazardous duty pay, pay for conversion of leave or other fringe benefits, or any like additional payments.
(12) Annuity.
"Annuity" shall mean payments for life derived from the "accumulated contributions" of a member.
(13) Pensions.
"Pensions" shall mean payments for life derived from money provided by the City of Baltimore. It shall not include additional benefits provided under §§ 6(n) and 6(o) of this subtitle.
(13a) Payments; Retirement dates.
(i) All retirement allowances or other benefits that are calculated on an annual basis shall be payable for each month in a year. Payments shall be made in periodic installments, as determined from time to time by the Board of Trustees, and the monthly allowance shall be computed by dividing the annual allowance by 12.
(ii) All retirement dates for all Class A, B, C, and D members shall fall on the 1st of a month.
(14) Retirement.
"Retirement" shall mean withdrawal from active service with a retirement allowance or pension, granted or deferred under the provisions of this subtitle. However, the deferment of the receipt of the retirement allowance or pension must be at the option of the member.
(15) Retirement allowance.
"Retirement allowance" shall mean the sum of the "annuity" and the pensions.
(16) Annuity reserve.
"Annuity reserve" shall mean the present value of all payments to be made on account of any annuity or benefit in lieu of any annuity computed upon the basis of such mortality tables as shall be adopted by the Board of Trustees and regular interest.
(17) Pension reserve.
"Pension reserve" shall mean the present value of all payments to be made on account of any pension or benefit in lieu of any pension computed upon the basis of such mortality table as shall be adopted by the Board of Trustees and regular interest.
(18) Total retirement benefits.
"Total retirement benefits" shall mean the sum of the "annuity" and the "pensions", and any additional annual benefits, including §§ 6(n) and 6(o), payable to a retiree or his beneficiary as provided for under this subtitle.
(19) Actuarial equivalent.
"Actuarial equivalent", for purposes of determining the amount of an optional retirement benefit under this subtitle, means a benefit of equivalent value when calculated using:
(i) regular interest for actuarial equivalent purposes; and
(ii) mortality assumptions based on the following tables:
(A) for retirements effective on or before June 30, 2016, the UP-84 mortality table with no set forward, except that in the case of disability retirements under this subtitle, the table is set forward 9 years; and
(B) for retirements effective on or after July 1, 2016, the RP-2000 mortality tables for males and females set forward 2 years and projected 15 years using 50% of Scale AA and then blended 50% for males and females.
(20) Actuary.
"Actuary" shall mean the person or persons designated as hereinafter provided.
(21) Pronouns.
The male pronoun shall include the female pronoun or vice versa.
(22) Actuarial reserve.
"Actuarial reserve" shall mean the present value of a benefit due the member, based on such interest and mortality tables as are adopted by the Board of Trustees upon the advice of the actuary for the Retirement System.
(23) {Repealed}
(24) Fiscal year.
"Fiscal year" shall be the 12- month period beginning on July 1 of each year and ending on June 30 of the following year, both these dates included therein, or such alternate dates as shall be mandated by law for the Mayor and City Council.
(25) Hours of work.
"Hours of work" shall mean in the computation of service as provided in § 9(c), the prescribed number of regular working hours in a fiscal year, exclusive of overtime, as set forth in an employee's job classification.
(26) Normal retirement date.
"Normal retirement date" shall be for all Class C members the 1st day next following the member's having attained age 65.
(27) Panel of hearing examiners.
"Panel of hearing examiners" shall mean the panel of hearing examiners provided for in § 5(l) and § 9(p).
(28) Parity time period.
"Parity time period" shall mean a period of time equal to the service credit a former Class A, Class B, or Class C member had acquired at the time such former member terminated employment with the City, plus any additional service credit for any employment for which the former Class A or Class B member would have been eligible to receive service credit on the date of reemployment, whether by purchase or repurchase, or by transfer of the applicable funds, had he continued his previous City employment and his Class A or Class B membership.
(29) Primary Social Security benefit.
"Primary Social Security benefit" for all Class C members shall mean the estimated annual primary Social Security benefit, as determined by the actuary, to which such Class C member was or would become entitled to upon reaching the age of 65, based on the Social Security Act in effect on January 1 of the year of the member's termination, normal retirement, early retirement, postponed retirement, or ordinary disability. In making the determination, the actuary shall conclusively presume (whether actual or not) that the member has always been a covered employee under the Social Security Act and that the member's earnable compensation (as defined in § 1(11)), which would be treated as wages for purposes of the Social Security Act, has increased at a rate determined by the actuary, the amount to which the member is entitled shall not be reduced because of any Social Security entitlement by reason of a spouse, age of spouse, dependents, or any Social Security disability which the member, the spouse or dependents may suffer, or any Social Security, or Social Security offset income earned by the member. For purposes of computing a member's primary Social Security benefit, if a Class C member has not reached the age of 65 years as of the date on which benefits are determined, City earnable compensation (as defined in § 1(11)), which would be treated as wages for purposes of the Social Security Act after his retirement or termination of employment, shall be deemed to be at the same rate as the rate in effect as of the date benefits are determined.
(30) Covered compensation.
Covered Compensation:
(i) For any Class C member who was an employee on or after June 28, 1991, and who terminates employment with the City on or before June 28, 1993, "covered compensation" shall mean for any member on any date, an annual amount determined on the basis of the federal Social Security Act as in effect on the 1st day of the fiscal year during which the determination is made. Such annual amount shall equal the average of the taxable wage bases (as defined herein) in effect for each calendar year during the 35-year period ending with the calendar year which ends immediately prior to the earlier of: (a) July 1 of the fiscal year in which the member terminates City employment; or (b) the calendar year in which the member attains age 65. "Taxable wage base" means, with respect to any calendar year, the maximum amount of earnings which may be considered wages under § 3121(a)(1) of the Internal Revenue Code of 1986, as amended.
(ii) For any Class C member who was an employee on or after June 29, 1993, "covered compensation" shall mean for any member on any date, an annual amount determined on the basis of the federal Social Security Act as in effect on the 1st day of the fiscal year during which the determination is made. Such annual amount shall equal the average of the taxable wage bases (as defined herein) in effect for each calendar year during the 35-year period which ends with the calendar year prior to the earlier of: (a) the January 1 which is one year prior to January 1 of the calendar year in which the member terminates employment with the City; or (b) January 1 of the calendar year in which the member attains age 65. "Taxable wage base" means, with respect to any calendar year, the maximum amount of earnings which may be considered wages under § 3121(a)(1) of the Internal Revenue Code of 1986, as amended.
(31) Present value.
"Present value" means the amount determined using:
(i) regular interest for valuation purposes under paragraphs (9)(ii)(b)1. or (9)(ii)(c)1. of this section; and
(ii) mortality assumptions based on the table in effect under the definition of "actuarial equivalent" in paragraph (19)(ii) of this section.