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Petitioner's Transfer Refund Distribution
For most of his employment career, petitioner was a member
of the Maryland State Employees' Retirement System (the
Retirement System). However, on October 6, 1989, petitioner
elected to transfer to the Maryland State Employees' Pension
System (the Pension System). Petitioner's election to transfer
from the Retirement System to the Pension System was effective
October 1, 1989.8
The Retirement System is a qualified defined benefit plan
under section 401(a) that requires mandatory nondeductible
employee contributions. The Pension System is also a qualified
defined benefit plan under section 401(a), but generally does not
require mandatory nondeductible employee contributions. The
State of Maryland contributes to both the Retirement System and
the Pension System on behalf of the members of those systems.
The trusts maintained as part of the Retirement System and the
Pension System are both exempt from taxation under section
501(a).
8 For a discussion of the Retirement System and the Pension
System, see generally Hylton v. Commissioner, T.C. Memo. 1995-27;
Hoppe v. Commissioner, T.C. Memo. 1994-635; Hamilton v.
Commissioner, T.C. Memo. 1994-633; Maryland State Teachers
Association v. Hughes, 594 F. Supp. 1353, 1357-1358 (D. Md.
1984); Conway v. United States, 908 F. Supp. 292 (D. Md. 1995).
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