1

 The quoted language is from §32(c), which dealt with transfers from a noncontributory to a

contributory system. The other subsections of §32 contained substantially similar language.

Cite as: Opinion No. 95-038 (September 21, 1995)

(unpublished)

Retirement Systems - Transfer of Service Credits

September 21, 1995

The Honorable John Leopold

House of Delegates 

You have requested our opinion on an issue regarding transfer of service credit from a State

to a county pension system. Your specific questions are as follows: 

1. Is an individual eligible to transfer State service credit to a county pension system if (i)

the individual was a member of the Employees' Pension System until terminating State service; (ii)

immediately after leaving State service, the individual became a contractual employee of the county;

(iii) the individual's contract with the county contained a provision precluding the individual from

membership in any county-sponsored pension plan; and (iv) after 71 days of work under the

employment contract, the individual became a permanent county employee, performing essentially

the same functions?

2. Is the 71-day period of contractual employment considered a "break in employment,"

for purposes of transferring service credit, even if the contractual job involved the same duties as the

permanent one?

The sequence of events described in your inquiry occurred in 1991. Hence, we shall address

the question applying the law in effect at that time. We shall also address the situation under current

law. 

In our opinion, the result is the same under both prior and current law: Given the facts

described in your inquiry, the individual is not eligible to transfer the State service credit. 

I

Transfer Under Prior Law

Under former Article 73B, §1-401(a) of the Maryland Code, if "a member transfers from a

retirement or pension system . . . the member shall receive service credit for and in the amount of

benefits in the system into which the member transfers." (Emphasis added.)1 As long as a "member"
transferred, a claim for the service credit could be made "within 1 year of the date of entrance into

the system to which the member transfers." 

The agency responsible for administering this law, the State Retirement Agency, interpreted

this provision straightforwardly, in accordance with its text: As a prerequisite to the transfer of

service credits between systems operated by the State or a political subdivision, the individual must

have been a "member" of a retirement or pension system from which the person transferred at the

time of the transfer into the new system. The term "member" was defined in former Article 73B,

§111(5) to mean "any employee who is a member of this pension system."

This administrative agency construction was, at the least, a reasonable one. Although a more

liberal construction might have avoided seemingly harsh results when individuals had but a short

hiatus between membership in different pension systems, nevertheless the Retirement Agency was not

at liberty to "disregard the plain meaning . . . in the name of liberal construction . . . " Mayor and

City Council v. Cassidy, 338 Md. 88, 97, 656 A.2d 757 (1995).

In Saxton v. Board of Trustees, 266 Md. 690, 296 A.2d 367 (1972), the widow of a fireman

who had died of job-related injuries sought certain special death benefits. The statute provided that

this benefit was available after "the death of a member in service." The widow's husband had died

eight months after retiring on disability, granted because of the very injuries that soon led to his death.

The widow argued that a liberal construction of the pension laws should not give so harsh an effect

to the literal "membership" requirement, and, indeed, one can scarcely imagine a more appealing set

of facts for such an argument. Yet, using language that seems apt here, the Court of Appeals rejected

her argument: "The short answer to this contention is that [the special benefits law], when read in

light of the definitions contained in the ordinance, presents no ambiguity and poses no problem of

statutory construction. If the wording of a law is clear, its literal meaning should not be tortured into

something else . . . " 266 Md. at 694.

The individual whose situation gave rise to your inquiry was a member of the Employees'

Pension System prior to her county employment. Under former Article 73B, §113(4), "If a member

terminates his employment he ceases to be a member." Hence, under the former law, an individual

who was a member of the Pension System could transfer service credit only if there were no break

in service. If there were a gap between membership in the prior system and transfer to membership

in the new system, the prior service credit could not be claimed. 

Under the facts presented in your inquiry, the individual did not transfer from membership in

the Employees' Pension System to membership in any pension system. The contract under which she

was initially employed with the county provided as follows: "Nothing in this Agreement shall be

construed to permit any Contractual Employee to participate in or be a member of any Countysponsored pension plan. . . ." So, by the time the individual was freed from this restriction, having

become a permanent county employee after 71 days of contractual service, she was no longer a

"member" of the Pension System. There was no uninterrupted "membership," first in one system and

then in the other, as required in order for a member to transfer service credit from the first system.
 

2

 In Chapter 131 of the Laws of Maryland 1992, the General Assembly revised and reorganized

the pension laws. What had been §32 became §1-401. However, this recasting made no

substantive change; according to the Committee Note accompanying §1-401, "[t]he only change

is technical."

II

Transfer Under Current Law

The current law ratifies the Retirement Agency's construction of prior law and makes the

continuity-of-service requirement all the more explicit. The provision that now generally governs

transfer of service credit, §37-202(a) of the State Personnel and Pensions Article, provides as follows:

A member of a State or local retirement or pension system may

transfer service credit attained as a result of that membership to another

State or local retirement or pension system if the member, without

incurring a break in employment, accepts employment or an office that:

(1) requires or allows the member to participate in the new

system; and

(2) does not allow the member to continue to accrue

benefits in the previous system.

The phrase "without incurring a break in employment" was added to confirm the interpretation that

had been given to the provision discussed above. See Revisor's Note in Chapter 6 of the Laws of

Maryland 1994.2 

In context, the term "break in employment" does not refer to the duties of positions, but rather

to the individual's relationship to pension system participation. If, as in the facts presented in your

inquiry, an individual ceases membership in a State pension system and, although employed by a

county, is not then entitled to participate in a local pension system, "a break in employment" will have

occurred. 

J. Joseph Curran, Jr.

Attorney General

Jack Schwartz

Chief Counsel

Opinions & Advice