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those who elect to transfer from the Retirement System to the
Pension System.
As a member of the Pension System, petitioner will
eventually receive a retirement benefit based upon his salary and
his creditable years of service, specifically including those
years of creditable service recognized under the Retirement
System. However, because of petitioner's receipt of the Transfer
Refund, petitioner's monthly annuity, upon retirement, will be
less than the monthly annuity that he would have received if he
had not transferred to the Pension System but had ultimately
retired under the Retirement System.
Petitioner received the Transfer Refund in the form of a
check dated November 30, 1989. On January 30, 1990, within 60
days of receiving the Transfer Refund, petitioner deposited
$70,000 of the Transfer Refund in an individual retirement
account (IRA) with T. Rowe Price, Inc., a family of mutual funds
in Baltimore, Maryland. Petitioner used the balance of the
Transfer Refund to help finance a new home and to help pay his
tax liability as reported on his 1989 Federal income tax return.
Petitioner received a Form 1099-R (Total Distributions From
Profit-Sharing, Retirement Plans, Individual Retirement
Arrangements, Insurance Contracts, Etc.) for 1989 from the
Maryland State Retirement Agency. The Form 1099-R reported
petitioner's Transfer Refund and reflected a gross distribution
of $172,559.14, petitioner's contributions in the amount of
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