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During the years in issue, the State of Maryland maintained
both the Retirement System, in which petitioner participated,
and the Pension System, to which petitioner transferred effective
as of November 1, 1990. Accordingly, in order to decide whether
petitioner received the "balance to the credit", we must treat
the Retirement System and the Pension System as a single pension
plan. Sec. 402(e)(4)(C).
Under Maryland law, petitioner's annuity under the Pension
System is calculated by taking into account petitioner's "average
final compensation" and petitioner's years of "creditable
service". Md. Ann. Code, art. 73B, sec. 117(2) (1988). Because
section 402(e)(4)(C) requires that we treat the Retirement System
and the Pension System as a single pension plan, we conclude
that, by transferring from the Retirement System to the Pension
System, petitioner did not forfeit his right to a future monthly
annuity, but simply elected to receive an initial single payment
to be followed by a reduced monthly annuity. Effectively,
petitioner's transfer allowed him to receive the "balance to the
credit" in two parts, an initial single payment to be followed by
a reduced monthly annuity, based on all of his years of
creditable service and on his salary during those years. See
Green v. Commissioner, T.C. Memo. 1994-340.
The testimony of petitioner at trial reflects the foregoing.
Thus:
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