MD. State Personnel and Pensions Code Ann. §  23-407 (2021)
2021 Maryland Statutes|State Personnel and Pensions|Division II - Pensions|Title 23 - Employees' and Teachers' Pension Systems|Subtitle 4 - Service Retirement Benefits|Section 23-407 - Effect of Employment of Individual -- as Temporary or Contractual Employee

    (a)    In this section, “area of critical shortage” means an academic field identified by the State Department of Education in accordance with the provisions of § 18–703(g)(1) of the Education Article as having projected employment vacancies that substantially exceed projected qualified graduates.    (b)    Except as provided in subsection (d) of this section, an individual who is receiving a service retirement allowance or a vested allowance may accept employment with a participating employer on a permanent, temporary, or contractual basis, if:        (1)    the individual immediately notifies the Board of Trustees of the individual’s intention to accept this employment; and        (2)    the individual specifies the compensation to be received.    (c)    (1)    Except as provided in § 23–408 of this subtitle, the Board of Trustees shall reduce the allowance of an individual who accepts employment as provided under subsection (b) of this section if:            (i)    the individual’s current employer is a participating employer other than the State and is the same participating employer that employed the individual at the time of the individual’s last separation from employment with a participating employer before the individual commenced receiving a service retirement allowance or vested allowance;            (ii)    1.    the individual’s current employer is any unit of State government;                2.    the individual’s employer at the time of the individual’s last separation from employment with the State before the individual commenced receiving a service retirement allowance or vested allowance was also a unit of State government; and                3.    any portion of the individual’s compensation for the individual’s current employment is derived from State funds, including any fees or penalties collected or received by a unit of State government; or            (iii)    the individual becomes reemployed within 12 months of receiving an early service retirement allowance or an early vested allowance computed under § 23–402 of this subtitle.        (2)    (i)    Except as provided in subparagraph (ii) of this paragraph and subject to subparagraphs (iii) and (iv) of this paragraph, the reduction required under paragraph (1) of this subsection shall equal:                1.    the amount by which the sum of the individual’s initial annual basic allowance and the individual’s annual compensation exceeds the average final compensation used to compute the basic allowance; or                2.    for a retiree who retired under the Workforce Reduction Act (Chapter 353 of the Acts of 1996), the amount by which the sum of the retiree’s annual compensation and the retiree’s annual basic allowance at the time of retirement, including the incentive provided by the Workforce Reduction Act, exceeds the average final compensation used to compute the basic allowance.            (ii)    1.    This subparagraph applies to a retiree of the Teachers’ Pension System who as faculty receiving a 10–month salary, retired directly from:                A.    the University System of Maryland;                B.    Morgan State University;                C.    St. Mary’s College; or                D.    a community college established or operating under Title 16 of the Education Article.                2.    The reduction required under paragraph (1) of this subsection shall equal the amount by which the sum of the retiree’s initial annual basic allowance and the retiree’s annual compensation, as calculated in subsubparagraph 3 of this subparagraph, exceeds the average final compensation of the retiree used to compute the basic allowance.                3.    The calculation of the retiree’s annual compensation in subsubparagraph 2 of this subparagraph does not include any of the following earnings the retiree received during the previous calendar year from the employer with whom the retiree is reemployed:                A.    bonuses;                B.    overtime;                C.    summer school salaries;                D.    adult education salary;                E.    additional temporary payments from special research projects;                F.    honorariums; and                G.    vehicle stipends.            (iii)    Any reduction taken under this subsection may not reduce the retiree’s allowance to an amount less than the required deduction for:                1.    if the retiree retired from any unit of State government, the retiree’s monthly State–approved medical insurance premiums; or                2.    if the retiree retired from a participating employer other than the State, the approved monthly medical insurance premiums required by the participating employer that employed the retiree at the time of the retiree’s retirement.            (iv)    The Board of Trustees shall recover from the retiree any difference between the reduction required under subparagraph (i) of this paragraph and the reduction taken under subparagraph (iii) of this paragraph.        (3)    A reduction of an early service retirement allowance or an early vested allowance under paragraph (1)(iii) of this subsection shall be applied only until the individual has received an allowance for 12 months.        (4)    Except for an individual whose allowance is subject to a reduction as provided under paragraphs (1)(iii) and (3) of this subsection, the reduction of an allowance under this subsection does not apply to:            (i)    an individual whose average final compensation was less than $25,000 and who is reemployed on a permanent, temporary, or contractual basis;            (ii)    an individual who is serving in an elected position as an official of a participating governmental unit or as a constitutional officer for a county that is a participating governmental unit;            (iii)    an individual who has been retired for 5 years, beginning on January 1 after the date the individual retires;            (iv)    a retiree of the Teachers’ Pension System who:                1.    is or has been certified to teach in the State;                2.    has verification of satisfactory or better performance in the last assignment prior to retirement;                3.    based on the retired teacher’s qualifications, has been appointed in accordance with § 4–103 of the Education Article; and                4.    receives verification of satisfactory or better performance each year the teacher is employed under paragraph (5) of this subsection;            (v)    a retiree of the Teachers’ Pension System who:                1.    A.    was employed as a principal within 5 years of retirement; or                B.    was employed as a principal not more than 10 years before retirement and was employed in a position supervising principals in the retiree’s last assignment prior to retirement;                2.    has verification of satisfactory performance for each year as a principal and, if applicable, in a position supervising principals prior to retirement;                3.    based on the retiree’s qualifications, has been hired as a principal; and                4.    receives verification of satisfactory performance each year the retiree is employed as a principal under paragraph (6) of this subsection;            (vi)    a retiree of the Employees’ Pension System who is reemployed on a contractual basis by the Maryland Department of Health as a health care practitioner, as defined in § 1–301 of the Health Occupations Article in:                1.    a State residential center as defined in § 7–101 of the Health – General Article;                2.    a chronic disease center subject to Title 19, Subtitle 5 of the Health – General Article;                3.    a State facility as defined in § 10–101 of the Health – General Article; or                4.    a local health department subject to Title 3, Subtitle 2 of the Health – General Article;            (vii)    a retiree of the Employees’ Pension System and the Judges’ Retirement System who is temporarily assigned to sit in a court of this State under the authority of Article IV, § 3A of the Maryland Constitution;            (viii)    a retiree of the Employees’ Pension System who is reemployed on a contractual basis for not more than 4 years as a parole and probation employee in a position authorized under Title 6, Subtitle 1 of the Correctional Services Article;            (ix)    a retiree of the Teachers’ Pension System who is reemployed by a local school system or the Maryland School for the Deaf and is rehired in accordance with paragraph (8) of this subsection; or            (x)    a retiree whose:                1.    current employer is any unit of State government;                2.    compensation from the retiree’s current employer does not include any State funds; and                3.    position is fully funded by a grant from a non–State source that specifically requires the use of the grant funds to pay the full amount of the compensation for the position.        (5)    (i)    An individual who is rehired under paragraph (4)(iv) of this subsection shall be employed as a classroom teacher, substitute classroom teacher, or teacher mentor in:                1.    a public school that:                A.    is a school in need of improvement as defined under the federal Elementary and Secondary Education Act and as implemented by the State Department of Education;                B.    is receiving funds under Title 1 of the federal Elementary and Secondary Education Act;                C.    has more than 50% of the students attending that school who are eligible for free and reduced–price meals established by the United States Department of Agriculture; or                D.    provides an alternative education program for adjudicated youths or students who have been expelled, suspended, or identified for suspension or expulsion from a public school; or                2.    the Maryland School for the Deaf.            (ii)    An individual rehired at a school described under subparagraph (i) of this paragraph shall teach:                1.    in an area of critical shortage;                2.    a special education class for students with special needs; or                3.    a class for students with limited English proficiency.        (6)    An individual who is rehired under paragraph (4)(v) of this subsection shall be employed as a principal at:            (i)    a public school that:                1.    is a school in need of improvement as defined under the federal Elementary and Secondary Education Act and as implemented by the State Department of Education;                2.    is receiving funds under Title 1 of the federal Elementary and Secondary Education Act;                3.    has more than 50% of the students attending that school who are eligible for free and reduced–price meals established by the United States Department of Agriculture; or                4.    provides an alternative education program for adjudicated youths or students who have been expelled, suspended, or identified for suspension or expulsion from a public school; or            (ii)    the Maryland School for the Deaf.        (7)    An individual who is reemployed under paragraph (4)(iv) or (v) of this subsection at a school described under paragraph (5) or (6) of this subsection may not continue that reemployment for more than 5 consecutive years.        (8)    (i)    In addition to any individuals rehired in accordance with paragraph (5) of this subsection, and subject to subparagraph (ii) of this paragraph, each superintendent of a local school system and the superintendent of the Maryland School for the Deaf may rehire a maximum of five individuals who are retirees of the Teachers’ Pension System in any position at any school in the superintendent’s local school system or the Maryland School for the Deaf.            (ii)    The number of individuals rehired under subparagraph (i) of this paragraph for each local school system or the Maryland School for the Deaf may not exceed a total of five retirees at any one time when added to the number of individuals rehired under § 22–406(c)(8)(i) of this article for that same local school system or the Maryland School for the Deaf.        (9)    (i)    The superintendent of the local school system or the superintendent of the Maryland School for the Deaf rehiring an individual under paragraph (4)(iv) or (v) of this subsection shall:                1.    approve the rehiring of that individual; and                2.    determine the school where the individual is to be reemployed.            (ii)    Within 30 days after rehiring an individual under paragraph (4)(iv) or (v) of this subsection, the superintendent of a local school system or the superintendent of the Maryland School for the Deaf shall complete and file with the Board of Trustees and the State Department of Education a form provided by the Board of Trustees that certifies that the individual rehired by the local school system or the Maryland School for the Deaf under paragraph (4)(iv) or (v) of this subsection:                1.    satisfied the criteria provided in paragraph (4)(iv) or (v) of this subsection;                2.    was reemployed at a school described under paragraph (5)(i) or (6) of this subsection; and                3.    if rehired under paragraph (4)(iv) of this subsection, was teaching in an area specified in paragraph (5)(ii) of this subsection.            (iii)    Within 30 days after rehiring an individual under paragraph (8) of this subsection, the superintendent of a local school system or the superintendent of the Maryland School for the Deaf shall complete and file with the Board of Trustees and the State Department of Education a form provided by the Board of Trustees that certifies that the individual rehired by the local school system or the Maryland School for the Deaf under paragraph (8) of this subsection satisfied the criteria provided in paragraph (8) of this subsection.            (iv)    1.    On or before April 1 of each year, the Board of Trustees and the State Department of Education shall jointly review any forms filed by a superintendent of a local school system or the superintendent of the Maryland School for the Deaf under subparagraph (ii) of this paragraph.                2.    If the Board of Trustees and the State Department of Education agree that a superintendent of a local school system or the Maryland School for the Deaf has rehired an individual that does not satisfy the criteria provided in paragraphs (4)(iv) and (5), paragraphs (4)(v) and (6), or paragraph (8) of this subsection:                A.    on or before July 1 of the year of the finding, the Board of Trustees shall notify the superintendent of the local school system or the Maryland School for the Deaf of this individual; and                B.    the local school system or the Maryland School for the Deaf shall reimburse the Board of Trustees the amount equal to the reduction to the individual’s retirement allowance that would have been made in paragraph (2) of this subsection.            (v)    If a superintendent of a local school system or the superintendent of the Maryland School for the Deaf rehires an individual that satisfies the criteria provided in paragraphs (4)(iv) or (v) and (5), (6), or (8) of this subsection and the Board of Trustees and the State Department of Education do not receive certification from the superintendent in the time required under subparagraph (ii) of this paragraph:                1.    on or before July 1 of the year of the finding, the Board of Trustees shall notify the superintendent of the local school system or the superintendent of the Maryland School for the Deaf of this individual; and                2.    the local school system or the Maryland School for the Deaf shall pay the Board of Trustees $50 for each month the superintendent fails to submit the certification under subparagraph (ii) of this paragraph in the time required, not to exceed a total of $1,000 for each individual whose certification is not submitted in the time required.            (vi)    The local school system or the Maryland School for the Deaf shall make the reimbursement on or before December 31 of the year the local school system or the Maryland School for the Deaf receives notice from the Board of Trustees under subparagraph (iv)2A of this paragraph.        (10)    On or before August 1 of each year, the local superintendent and the superintendent of the Maryland School for the Deaf shall report to the State Department of Education for the previous school year:            (i)    the number of individuals rehired under paragraph (4)(iv) or (v) or (8) of this subsection;            (ii)    1.    the school and school system where each individual was rehired; and                2.    whether the school:                A.    was a school in need of improvement as defined under the federal Elementary and Secondary Education Act and as implemented by the State Department of Education;                B.    was receiving funds under Title 1 of the federal Elementary and Secondary Education Act;                C.    has more than 50% of the students attending that school who are eligible for free and reduced–price meals established by the United States Department of Agriculture; or                D.    provided an alternative education program for adjudicated youths or students who have been expelled, suspended, or identified for suspension or expulsion from a public school;            (iii)    the original date of rehire for each individual;            (iv)    the subject matter taught by each individual;            (v)    if hired under paragraph (8) of this subsection, the position title of each individual;            (vi)    the annual salary of each individual; and            (vii)    the percentage of student population composed of children in poverty that is required to be present in a school in that school system in order for that school to qualify as a Title 1 school.        (11)    (i)    Within 30 days after rehiring an individual under paragraph (4)(x) of this subsection, and on or before January 31 each year for the 5 calendar years immediately following the individual’s date of retirement, the appointing authority of the unit of State government employing the individual shall complete and file with the Board of Trustees a form provided by the Board of Trustees that certifies that the individual rehired by the individual’s current employer under paragraph (4)(x) of this subsection satisfied the criteria provided in paragraph (4)(x) of this subsection.            (ii)    To establish that an individual’s compensation from the current employer does not include any State funds, the current employer shall provide the State Retirement Agency with the following:                1.    except as provided in subparagraph (iii) of this paragraph, a copy of the grant agreement that provides full funding for the individual’s position, and specifies that the grant funds must be used to pay the full cost of the position’s compensation;                2.    payroll records of the current employer that demonstrate that the grant funds were used to pay the individual’s compensation; and                3.    any additional information required by the State Retirement Agency.            (iii)    A block grant or matching grant may not be used to satisfy the requirement under subparagraph (ii)1 of this paragraph.            (iv)    If the Board of Trustees finds that an appointing authority has rehired an individual that does not satisfy the criteria provided in paragraph (4)(x) of this subsection:                1.    on or before July 1 of the year of the finding, the Board of Trustees shall notify the appointing authority for the unit of State government employing this individual; and                2.    the unit of State government employing the individual under paragraph (4)(x) of this subsection shall reimburse the Board of Trustees the amount equal to the reduction to the individual’s retirement allowance that would have been made in paragraph (2) of this subsection.    (d)    An individual who is receiving a service retirement allowance under this title may not be employed within 45 days of the date the individual retired, on a permanent, temporary, or contractual basis, by:        (1)    the State or other participating employer; or        (2)    a withdrawn participating governmental unit, if the retiree was an employee of the withdrawn participating governmental unit while the withdrawn governmental unit was a participating employer.    (e)    An individual who is receiving a service retirement allowance or a vested allowance and who is reemployed by a participating employer may not receive creditable service or eligibility service during the period of reemployment.    (f)    The individual’s compensation during the period of reemployment may not be subject to the employer pickup provisions of § 21–303 of this article or any reduction or deduction as a member contribution for pension or retirement purposes.    (g)    The State Retirement Agency shall institute appropriate reporting procedures with the affected payroll systems to ensure compliance with this section.    (h)    (1)    Immediately on the employment of any individual receiving a service retirement allowance or a vested allowance, a participating employer shall notify the State Retirement Agency of the type of employment and the anticipated earnings of the individual.        (2)    At least once each year, in a format specified by the State Retirement Agency, each participating employer shall provide the State Retirement Agency with a list of all employees included on any payroll of the employer, the Social Security numbers of the employees, and their earnings for that year.    (i)    The State Department of Education shall adopt regulations to carry out this section.    (j)    At the request of the State Retirement Agency:        (1)    a participating employer shall certify to the State Retirement Agency that it is not the same participating employer that employed an individual at the time of the individual’s last separation from employment before the individual commenced receiving a service retirement allowance or a vested allowance; or        (2)    a unit of State government shall certify to the State Retirement Agency that the individual was not employed by any unit of State government at the time of the individual’s last separation from employment before the individual commenced receiving a service retirement allowance or a vested allowance.    (k)    The Maryland Department of Health shall notify the State Retirement Agency of any retirees who qualify under subsection (c)(4)(vi) of this section.    (l)    On or before September 1 of each year, the Secretary of Health shall submit a report in accordance with § 2–1257 of the State Government Article to the Joint Committee on Pensions that provides:        (1)    the number of rehired retirees under subsection (c)(4)(vi) of this section;        (2)    the annual salary of each rehired retiree at the time of retirement and the current annual salary of each rehired retiree;        (3)    the number of health care practitioners hired who are not retirees; and        (4)    the annual salary of each health care practitioner who is hired.    (m)    On or before October 1 of each year, the State Superintendent of Schools shall submit a report for the previous school year, to the Joint Committee on Pensions, in accordance with § 2–1257 of the State Government Article, that provides:        (1)    (i)    the number of rehired retirees under subsection (c)(4)(iv) and (v) and (8) of this section;            (ii)    1.    the school and school system where each retiree was rehired; and                2.    whether the school:                A.    was not making adequate yearly progress or was a school in need of improvement as defined under the federal No Child Left Behind Act of 2001 and as implemented by the State Department of Education;                B.    was receiving funds under Title 1 of the federal No Child Left Behind Act of 2001;                C.    has more than 50% of the students attending that school who are eligible for free and reduced–price meals established by the United States Department of Agriculture; or                D.    provided an alternative education program for adjudicated youths or students who have been expelled, suspended, or identified for suspension or expulsion from a public school;            (iii)    a copy of the annual staffing report generated by the State Superintendent of Schools in accordance with § 18–703(g)(1) of the Education Article certifying areas of critical shortage for the previous school year as evidenced by projected employment vacancies substantially exceeding projected qualified graduates;            (iv)    the subject matter that each rehired retiree was teaching;            (v)    the salary of each rehired retiree;            (vi)    the total number of years each retiree has been reemployed at the school where the retiree was rehired for the previous school year; and            (vii)    the percentage of student population composed of children in poverty that is required to be present in a school in that school system in order for that school to qualify as a Title 1 school; and        (2)    the number of retirees rehired under subsection (c)(8) of this section.    (n)    On or before October 1 of each year, the Board of Trustees shall submit a report for the previous calendar year to the Joint Committee on Pensions, in accordance with § 2–1257 of the State Government Article, that provides:        (1)    the number of individuals in each local school system that the Board of Trustees and the State Department of Education agree were rehired and did not satisfy the criteria provided in subsection (c)(4)(iv) or (v) and (5), (6), or (8) of this section; and        (2)    any reimbursements a local school system made under subsection (c)(9)(iv) of this section.    (o)    On or before September 1 of each year, the Secretary of Public Safety and Correctional Services shall submit a report in accordance with § 2–1257 of the State Government Article to the Joint Committee on Pensions that provides:        (1)    the number of rehired retirees under subsection (c)(4)(viii) of this section;        (2)    the annual salary of each rehired retiree at the time of retirement and the current annual salary of each rehired retiree;        (3)    the number of parole and probation employees hired who are not retirees; and        (4)    the annual salary of each parole and probation employee who is hired.