Under one Board of Trustees, the State Retirement and Pension System consolidates the Pension System for Employees of the State of Maryland and the Employees' Retirement System, the Pension System for Teachers of the State of Maryland and the Teachers' Retirement System, and the State Police Retirement System. Prior to this consolidation, retirement and pension systems functioned separately. The earliest began in 1927 when the Teachers' Retirement System was established (Chapter 344, Acts of 1927). The Employees' Retirement System formed in 1941 (Chapter 377, Acts of 1941). Thereafter, the State Police Retirement System started in 1949 (Chapter 349, Acts of 1949). In 1970, these three systems were placed under the Department of Personnel. In 1979, the Pension System for Employees of the State of Maryland, and the Pension System for Teachers of the State of Maryland were created (Chapters 23, 24, Acts of 1979). From these systems, the Maryland State Retirement and Pension Systems formed in 1982. When the pension law was recodified in 1994, the Maryland State Retirement and Pension Systems was renamed the State Retirement and Pension System (Chapter 6, Acts of 1994).
In 1982, the Board of Trustees for the State Retirement and Pension System was created (Chapter 506, Acts of 1982). The Board establishes rules and regulations to administer the several pension systems and manage pension funds. On matters concerning the operation of the pension funds in the System, the Board selects an actuary as its technical adviser. From the Board, each member and beneficiary receives a summary of the System's annual report and of the individual's vested benefits.
To arrange and evaluate all medical examinations required under the laws of the several pension systems and to investigate all applications for disability retirement, the Board designates one or more medical boards. The boards each are composed of three physicians ineligible to participate in these pension systems.
Fourteen members comprimise the Board of Trustees. Eleven are elected or appointed members who serve four-year terms. Three serve ex officio. Two trustees each represent the State employees' and teachers' retirement funds; one represents the State Police retirement fund; and one the interests of participating local governments; five represent the public. Trustees representing the Employees', State Police and Teachers' Systems are elected by the members and beneficiaries of their respective systems. The Governor appoints the trustees representing the interests of local governments and the public (Code State Personnel and Pensions Article, secs. 21-104 through 21-127).
The Board of Trustees is assisted by four committees: Administrative; Audit; Corporate Governance; and Investment.
Chosen by the Board of Trustees, the Committee has seven members.
AUDIT COMMITTEE
The Committee is comprised of five members chosen by the Board of Trustees. A majority must have financial or management experience.
CORPORATE GOVERNANCE COMMITTEE
INVESTMENT COMMITTEE
The Investment Committee reviews all investment programs to ensure compliance with policies of the Board of Trustees and advises the Board on all matters pertaining to investment programs. The Committee also advises the Board on preparation and maintenance of an investment operations manual and any additional bonding of employees of the State Retirement Agency.
From its membership, the Board of Trustees annually appoints the Investment Committee (Code State Personnel and Pensions Article, secs. 21-114 through 21-116).
For the Board of Trustees, the Audit Committee oversees preparation of the Comprehensive Annual Financial Report and the periodic assessment of retirement system risk management. The Committee also monitors the conduct of external audits of System financial statements, internal audits of Agency operations, and audits of local government employers.
The Corporate Governance Committee was created in March 2004 as a subcommittee of the Investment Committee. In October 2009, it was reconstituted as a standing committee to advise the Board of Trustees on matters of corporate governance and proxy voting. The Committee advises the Board on public policy and on issues related to corporate governance, including statutory mandates; the integrity of capital markets and market participants; hiring or termination of advisors, including providers of proxy monitoring and voting services; and changes to proxy voting guidelines of the System.
Providing advice to the three boards of trustees of the respective retirement systems, the Investment Committee was first authorized in 1958 as the Investment Advisory Committee (Chapter 70, Acts of 1958). The Committee reformed as the State Investment Council in 1982 (Chapter 506, Acts of 1982). In 1988, it reorganized under its present name (Chapter 698, Acts of 1988).
Under the Agency are five Divisions: External Affairs; Finance; Information Systems; Investment; and Retirement Administration.
The Division invests, manages, controls, and performs investment accounting functions for the Retirement Accumulation and Annuity Savings Funds of the System (Code State Personnel and Pensions Article, sec. 21-122).
EXTERNAL AFFAIRS DIVISION
The External Affairs Division formed in February 2010. In addition to media relations, the Division manages communications with: the General Assembly, System members and retirees, member associations, and the general public. The Division provides information about goals and policies of the Board of Trustees, functions and procedures of the Agency, and the rights and benefits of the State Retirement and Pension System.
FINANCE DIVISION
The Finance Division began as Fiscal Affairs, and became the Fiscal Affairs Division by 1994. It adopted its current name in 1996. The Division is responsible for accounting and financial reporting, budget administration and procurement, and human resources.
INFORMATION SYSTEMS
Information Systems started as Data Processing. In July 1993, it reformed as Systems Development within the State Retirement Agency and reorganized under its present name in 1995. The division designs and implements automated management information systems and enhancements to systems.
INVESTMENT DIVISION
In 1982, the Investment Division originated as the State Investment Agency under the State Retirement and Pension System (Chapter 506, Acts of 1982). Functions of the State Investment Agency reorganized through the Investment Division under the State Retirement Agency in 1988 (Chapter 698, Acts of 1988).
RETIREMENT ADMINISTRATION DIVISION
Under the State Retirement Agency, the Retirement Administration Division formed in 1988. The Division pays benefits to retirees, and administers employee contributions. Retirement counseling is provided to individuals and in group sessions.
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