HB 791
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
First Reader
House Bill 791 (Delegate P. Young)
Appropriations
Military Service Credit - Eligibility
This bill allows a member or vested former member of the State Police Retirement System,
Law Enforcement Officers’ Pension System, or Correctional Officers’ Retirement System
to earn military service credit even if that member or former member receives service credit
for the same military service under another retirement system. However, a member may
not receive military service credit from the State more than once. The bill takes effect
July 1, 2021.
Fiscal Summary
State Effect: State pension liabilities and contributions increase minimally in FY 2023,
potentially by about $1.0 million and $84,000, respectively. Employer contributions are
assumed to be allocated 60% general funds, 20% special funds, and 20% federal and other
funds. To the extent that law enforcement officers are more likely than the general
population to have retired from the U.S. Armed Forces, the fiscal effect may be slightly
greater. No effect on revenues.
Local Effect: Negligible increase in local participating governmental units’ (PGUs)
pension liabilities, and no discernible effect on local employer contributions due to the
small number of affected members in the PGU pool. No effect on local revenues.
Small Business Effect: None.
Analysis
Current Law: In general, any member or vested former member of the State Retirement
and Pension System (SRPS) who accrues 10 years of service as a member of any State plan
may receive 1 year of additional service credit for each year of active military duty
performed prior to membership in SRPS, up to a maximum of 5 years. That credit is granted
at no cost to the member or former member and is applied using the accrual rate in effect
when the member or former member submits an application for the credit to the State
Retirement Agency (SRA).
However, SRPS members or vested former members who claim credit for the same military
service from another retirement system may not receive military service credit from SRPS,
unless they claimed credit for that military service from:
 Social Security;
 National Railroad Retirement Act; or
 National Guard or military reserves pensions (Title 3 or Title 10 of the U.S. Code).
This generally means that any SRPS member receiving a military pension after completing
20 years of active military service cannot claim the military service credit from SRPS.
State Expenditures: SRA, the Military Department, and the Personnel Unit within the
Department of Budget and Management do not have reliable data on the number of State
employees with prior military service, nor data on the number who have retired from the
military and are receiving a military pension. Therefore, a reliable estimate of the number
of SRPS members who would be eligible to claim military service credit under the bill
cannot be determined.
However, using a variety of data sources, and for illustrative purposes only, the
Department of Legislative Services estimates that about 20 current active members of the
three affected plans may be eligible for military service credit under the bill. As shown in
Exhibit 1, the General Assembly’s consulting actuary identified 815 active members in the
three affected plans who fit the profile of individuals who could be eligible to claim
additional service credit. These individuals are generally at least age 50 and, therefore,
could have served 20 years in the military and earned 10 years of service credit in SRPS,
making them eligible for the military service credit. The U.S. Department of Defense
advises that approximately 56,000 military retirees live in Maryland, which is 2.5% of the
State’s population age 50 or older. Assuming the same percentage of SRPS members
identified by the actuary in that age group are military retirees, approximately
20 SRPS members may be eligible for 5 years of military service credit. To the extent that
individuals in law enforcement roles may be more likely to have served in (and retired
from) the military, the number of affected individuals may be greater.
HB 791/ Page 2
 Exhibit 1
State Retirement and Pension System Members
Potentially Eligible for Military Service Credit as of June 30, 2020
Active Members
State Police 5
Correctional Officers 703
Law Enforcement 107
Total 815
Source: Bolton; State Retirement Agency
This analysis can only determine the increase in pension liabilities and employer
contributions if a “typical” member of each of the major SRPS plans claimed an additional
5 years of service credit. Since the bill applies only to individuals with a 20-year pension,
it is assumed that they all claim the maximum 5 years of credit allowed by the State.
Exhibit 2 shows the costs for one member of each plan claiming the service credit allowed
by the bill; these costs would increase annually according to actuarial assumptions. For
illustrative purposes only, if the estimated 20 members earn the military service credit at a
weighted average liability of about $50,555 and a weighted annual cost of approximately
$4,200 per member, total State pension liabilities increase by about $1.0 million and
employer contributions (all funds) increase by approximately $84,000 in fiscal 2023.
Exhibit 2
Fiscal 2023 Effect for Each Member Who Claims Credit under the Bill
Liability Increase FY 2023 Contribution Increase
State Police $134,200 $11,100
Correctional Officers 45,600 3,800
Law Enforcement 79,200 6,600
Source: Bolton
As the military service credit allowed by the bill counts toward both eligibility and
creditable service, some affected members may retire earlier than they otherwise would
because of the additional eligibility service credit they receive. Early retirements can
HB 791/ Page 3
increase pension liabilities because benefits are paid over a longer period of time; however,
this analysis does not address the fiscal effects from earlier retirements.
Additional Information
Prior Introductions: Similar legislation has been introduced in multiple prior sessions.
HB 1027 of 2020 received a hearing in the House Appropriations Committee, but no
further action was taken. SB 503 of 2019 received a hearing in the Senate Budget and
Taxation Committee, but no further action was taken. Its cross file, HB 1133, received a
hearing in the House Appropriations Committee, but no further action was taken. HB 1165
of 2018 received a hearing in the House Appropriations Committee, but no further action
was taken.
Designated Cross File: None.
Information Source(s): Bolton; U.S. Department of Defense; Department of Legislative
Services
Fiscal Note History: First Reader - February 22, 2021
rh/vlg
Analysis by: Michael C. Rubenstein Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 791/ Page 4


Statutes affected:
Text - First - Military Service Credit - Eligibility: 38-104 State Personnel and Pensions, 2-011 State Personnel and Pensions