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the Pension System. In other words, petitioner could have
transferred from the Retirement System to the Pension System and
received the Transfer Refund at any time after 1979 during his
employment tenure with the State; he was under no obligation
whatsoever to retire solely by virtue of having transferred from
the Retirement System to the Pension System. E.g., Hamilton v.
Commissioner, T.C. Memo. 1994-633 (Baltimore County teacher who
elected to transfer from Retirement System to Pension System and
receive transfer refund in 1989 remained so employed at least
through date of trial in 1994); see Hoppe v. Commissioner, T.C.
Memo. 1994-635 (Maryland State employee who elected to transfer
from Employees' Retirement System Employees to Employees' Pension
System and receive transfer refund in 1989 remained so employed
at least through date of trial in 1994).
Upon electing to transfer from the Retirement System to the
Pension System and receiving the Transfer Refund, petitioner was
at liberty to dispose of the Transfer Refund as he saw fit. In
other words, Maryland law did not prescribe or otherwise limit
the options available to petitioner in disposing of the Transfer
Refund. Hylton v. Commissioner, supra.
Having considered all of petitioners' arguments and finding
them unpersuasive, we hold that petitioner did not receive the
Transfer Refund "on account of [petitioner's] separation from the
service". Rather, we hold that petitioner received the Transfer
Refund on account of his election to transfer from the Retirement
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