FY 23 Approved Budget Book

COUNTY BUDGET POLICIES AND PROCESS

County Government - employees participate in a plan administered by the State of Maryland under provisions of Article 73B of the Annotated Code of Maryland. – The Employees’ Pension System of the State of Maryland established on January 1, 1980. Harford County joined this Plan on July 1, 1999. Plan members contribute 7% of their covered salary, while Harford County Government is required to contribute at an actuarial determined rate. The Harford County Sheriff’s Office Pension System - is a single employer defined benefit pension trust plan established by Harford County effective July 1, 1997 for certain law enforcement and correctional employees of the Office of Sheriff of Harford County. Plan members are required to contribute 7% of their annual covered salary. The County is required to contribute at an actuarial determined rate. The system provides retirement, disability and death benefits to plan members and their beneficiaries. Effective July 1, 2005, per Bill 05-22, a Cost of Living increase of the CPE-U is limited to 3% applied each July 1. Harford County Bill No. 97-20 assigns the authority to establish and amend the benefit provisions of the plan to Harford County Government by County ordinance. The Harford County Council adopted resolution number 20-06 on June 6, 2006 to approve participation in the law enforcement officers’ pension system (LEOPS) effective July 1, 2006. Harford County Deputy Sheriff’s who are sworn, certified law enforcement officers are eligible for LEOPS. The plan is administered by the State Retirement and Pension System of Maryland. Plan members contribute 4% of their covered salary while Harford County Government is required to contribute at an actuarial determined rate. The Volunteer Firemen’s Pension System - was instituted by Harford County Government on January 31, 1975 and is a single employer defined benefit Length of Service Award Program (LOSAP). Based on County statutes, firemen and ambulance personnel are eligible to participate upon accumulating “50 (fifty) points”, which are determined in accordance with a specific point system. Benefits vest upon 25 years of service credit and are payable at 55 years of age. The County must provide annual contributions sufficient to satisfy the actuarially determined contribution requirements. Additional periodic County contributions are determined by an actuarially determined rate. Since there are no “Salaries”, the rate cannot be expressed as a percentage of covered payrolls. There are no participant financed benefits in this plan. Administrative costs are financed through investment earnings. The plan generally provides $5,000 burial benefits and other benefits for disability. Regular benefits are calculated at $12 per month for each of the first 25 years of service, plus $6 per month for each year in excess of 25. The maximum benefit is $450 per month. Post Retirement Benefit Plans - The County offers post-retirement medical and life insurance benefits to Harford County retirees. These benefits are referred to as Other Post Employment Benefits (OPEB). During Fiscal Year 2008, the County established a trust to act as the funding mechanism for the OPEB Plan. Funding for retiree benefits is not required by law other than pay-as-you-go amounts necessary to provide current benefits. Contributions to the OPEB Trust Fund may be made annually as appropriated by the County Council. The County’s annual OPEB cost is actuarially determined in accordance with Governmental Accounting Standards Board (GASB) Statement 45. Plan benefits are accounted for on an accrual basis. Retirement Health Savings - The County offers a tax-exempt health reimbursement arrangement that Harford County set up in accordance with the Internal Revenue Code Section 501(c)(9). This is a defined contribution benefit. Employees hired on or after July 1,

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