The Maryland Teachers & State
Employees Supplemental Retirement Plans are provided by the State
of Maryland as an employee benefit available for voluntary participation.
Three plans are offered; the 457 Deferred Compensation Plan, the 403(b)
Tax Deferred Annuity Plan, and the 401(k) Savings and Investment Plan,
and most employees automatically get the benefit of a 401(a) Match
Plan account. The plans are governed by the State Personnel
& Pensions Article of the Maryland Code, and are overseen by a
nine-member Board of Trustees appointed by the Governor. Nationwide
Retirement Solutions is the company hired by the Board of Trustees
to administer the plans according to the board's instructions.
All contributions are made through
payroll deductions, before federal and state income taxes are assessed.
The number in the plan names [457, 403(b), and 401(k)] refer to the
different parts of federal tax law that give the conditions for deferring
taxes on retirement savings. While there are some differences
in each plan (Three-Plan Comparison Chart), the basics of each plan
are the same: part of your salary goes into an investment option
without deducting any taxes, your investment hopefully grows throughout
your working years without the burden of income taxes, until it's
paid out when you retire.
The state of Maryland offers you four supplemental retirement plans:
the 457 Deferred Compensation Plan, the 403(b) Tax Deferred Annuity
Plan, the 401(k) Savings & Investment Plan, and the 401(a) Match
Plan. All contributions are made through payroll deductions, before
federal and state income taxes are assessed. This serves to lower
your annual taxable income. Income taxes on your contributions and
earnings in the plans are postponed until you receive them, which
is typically at retirement. The plans offer a variety of investment
options that allow you to tailor your investment portfolio to meet
your personal financial goals. Enrollment in the plans can occur any
time. Click here
to enroll, or call the Enrollment Hotline at 1-877-628-2499.
All state employees are eligible to participate in the 457 and 401(k)
plans. Employees of state educational facilities also
are eligible for the 403(b) plan. State educational institutions
include state colleges, state universities, the Maryland Department
of Education, the Maryland Higher Education Commission, and the Maryland
School for the Deaf.
The investment options available
include a stable value fund (also known as the Investment Contract
Pool) and mutual funds. The minimum contribution
is $5 biweekly. The maximum contribution per plan is up to 100
percent of compensation, but not more than the federal limit.
When participating in both the 457 plan and the 401(k) plan [or
403(b)], one may contribute the annual limit to each plan for a potential
combined contribution of double the limit.
State employees who are members
of the State Employees Modified Pension System may be eligible for
a match of their contributions to the 457, 403(b), and 401(k)
payroll plans. If you're eligible, the state may match your contributions
to the supplemental retirement plans dollar for dollar up to the amount
funded each fiscal in the State budget. With each new fiscal year,
the match starts again. There will be no employer matching payments to a participant's 401(a) account until authorized and budgeted.
457 Deferred Compensation Plan. You may
begin distribution of your account, without penalty, when you separate
from state service, regardless of age. You must begin distributions
at 70½, unless you're still employed by the state and have
not yet retired. You may elect a payout date and method any time,
and you may change your payout method, amount, and frequency
any time. The IRS requires a 20 percent federal income tax withholding
on most distributions.
403(b) Tax Deferred
Annuity Plan & 401(k) Savings & Investment Plan (payroll
plan & transfer account). You may begin distribution of your account
without an IRS 10 percent early distribution penalty if one
of the following conditions have been met:
- Age 59½;
- Separation from
Maryland state service at 55 or older;
- Total disability;
Deductible medical hardship;
- Death; and
- Selection of
an annuity contract (after separation from employment).
If you separate
from state service before 55, you may begin distributions, but you
may owe a 10 percent IRS penalty until a certain age. You must begin
distributions at 70½, unless you're still employed by the state
and have not yet retired. The IRS requires a 20 percent federal income
tax withholding on most distributions.
Match Plan. You may begin distribution of your account
at termination from state employment or at retirement. Your account
also is payable upon total disability or death. There may be an IRS
penalty for withdrawals before a certain age.
457 Deferred Compensation Plan. The 457 plan allows hardship
distributions for unforeseeable emergencies causing financial hardships.
To qualify for a hardship distribution, you must provide financial
records that document your hardship. Normally budgetable expenditures,
such as the purchase of an automobile, do not qualify as financial
hardships. An IRS penalty doesn't apply to hardship distributions
in the 457 plan.
403(b) Tax Deferred Annuity
Plan & 401(k) Savings & Investment Plan. The 403(b) and
401(k) plans allow hardship distributions for emergencies causing
financial hardships. To qualify for a hardship distribution in these
plans, you must provide financial records that document your hardship.
In these plans, a financial hardship can include a financial need
arising from the use of funds to buy a home. A financial hardship
also can be the financial need to provide for the post secondary education
of the participant or member of his/her immediate family. An IRS 10
percent penalty may apply to hardship distributions in the 403(b)
and 401(k) plans.
401(a) Match Plan. Hardship
distributions are not permitted in the 401(a) Match Plan.
457 Deferred Compensation Plan, 403(b) Tax Deferred Annuity Plan
& 401(k) Savings & Investment Plan. You may borrow up
to 50 percent of your account, but never more than $50,000. Your principal
and interest payments are returned to your account. With one exception,
the maximum repayment period is five years. When the loan is used
to purchase a primary residence, the maximum repayment period is 15
401(a) Match Plan. The 401(a)
Match Plan doesn't offer a loan provision.
plan documents for the State of Maryland Supplemental Retirement Plans
are legal documents that provide program descriptions.
To view the 457, 401(k), or 401(a) plan documents, please click on
the icons below.
401(k) Plan Document
401(a) Plan Document
403(b) Plan Document
information about any of the plan documents, please call the Maryland
Teachers & State Employees Supplemental Retirement Agency at 410-767-8740
or 1-800-543-5605. You may send comments or questions to us
by e-mail to The
Maryland Supplemental Retirement Agency.
For more information, contact the Maryland
Teachers & State Employees Supplemental Retirement Agency
at 410-767-8740 or 1-800-543-5605.
Click here to
enroll or call the Enrollment Hotline at 1-877-628-2499.