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In 1979, the Maryland State legislature (the legislature)
adopted legislation, effective January 1, 1980, that created the
Pension System and enabled participants in the Retirement System
to voluntarily transfer to the Pension System.11 See Md. Ann.
Code, art. 73B, secs. 83(8), 86B(6), 89(1)(e), 141, 142 (1988).
Petitioners' principal contention is as follows:
Petitioner's election to receive a lump sum
distribution of his employee contribution was an
election made pursuant to the retirement policy legally
established by the Board [of Trustees for the Maryland
State Retirement and Pension Systems] and was not
pursuant to the statutory transfer option in Section
83(8).
According to petitioners' theory, this policy was specifically
designed to encourage retiring members of the Retirement System
to transfer to the Pension System.
Petitioners contend that petitioner did not satisfy the
predicate requirements to transferring from the Retirement System
to the Pension System imposed by Md. Ann. Code, art. 73B, sec.
10(...continued)
virtually identical provisions authorizing distributions to
employees and teachers who choose to transfer from a retirement
system to a pension system. See Md. Ann. Code, art. 73B, secs.
11B(5), 14(1)(g) (1988), regarding the Maryland State Employees'
Retirement System; Md. Ann. Code, art. 73B, sec. 89(1)(e) (1988),
regarding the Maryland State Teachers' Retirement System.
11 The Pension System and the related transfer option to
that system from the Retirement System were created in part
because of concern about the actuarial integrity of the
Retirement System due in particular to the unlimited post-
retirement cost-of-living adjustments afforded those individuals
retiring under the Retirement System. See Hylton v.
Commissioner, T.C. Memo. 1995-27; Sites v. United States, 75 AFTR
2d 95-2503, 95-1 USTC par. 88,029 (D. Md. 1995).
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