Maryland State Modified Teachers/Employees Pension System (MSPS)
The Maryland State Pension System is a defined benefit plan. This means that a member qualifies for retirement benefits based upon the member’s length of service, and the benefit is pre-determined based on a formula. Enrollment into the Pension Plan upon hire is irrevocable.
The MSPS includes a mandatory 7% pre-tax deduction withheld from each paycheck.
The University contributes a percentage of the employee’s annual salary over 26 pay periods. This percentage fluctuates with each fiscal year. The actual contribution will be reflected on the left hand side of the employee’s pay stub.
The employee becomes vested in the pension system after 5 years of service (10 years if hired on or after 7/1/2011). If employment is terminated prior to the 5 or 10 year period, the member contributions may be refunded, and all service credit will be lost. Should employment terminate after 5 or 10 years service, service and contributions will be held until such time as the faculty/staff member is eligible to retire. Review Pension Plan/Optional Retirement Program Comparison Chart for more information regarding vesting and retirement eligibility benefits.
MSPS uses two types of service credit in determining benefits. Eligibility Service is required to qualify for most benefits. It is earned at the rate of one full year of eligibility service in each fiscal year that a member works a minimum of 500 hours (excluding overtime). Creditable Service is credit used to calculate the actual dollar amount of any benefit. It is based on the number of months worked and is determined by comparing the normal hours worked during the fiscal year to the standard hours for the member’s position.
The Pension System provides a monthly retirement annuity (the actual amount of benefits is determined using a formula which uses years of service and the employee’s average final salary as prime factors), death benefit (one lump sum of annual salary to designated beneficiary, or accumulated contributions + interest if employed less than 1 year), disability benefits, and compound cost of living adjustments after retirement (limited to 3%). Employees hired on or after 7/1/2011 subject to COLA limit of 2.5%. Review Pension Plan/Optional Retirement Program Comparison Chart for more information.
Members of MSPS may apply unused sick leave to additional retirement credit when retiring directly from the pension. This unused sick leave is applied only in the event of a direct service retirement. If the employee terminates State service, although they may be vested, unused sick leave will not be applied.