At the time of employment, all regular employees of the University of Maryland Eastern Shore are required to enroll in one of the pension systems offered through the State of Maryland. The pension program for which you are eligible depends on your category of employment.
All eligible non-exempt employees must enroll in the defined benefit plan offered by the Maryland State Retirement System. Faculty and Associate Staff can elect to enroll in either the Maryland State Retirement System or an Optional Retirement Plan.
The pension plan offered by the Maryland State Retirement System, is a defined benefit program. A defined benefit pension uses a mathematical formula at the time of retirement to determine your monthly pension amount. This formula takes into consideration such factors as the length of time you are employed, your age at the time of retirement and the average of the three highest years of salary.
In order to be eligible for a pension under a defined benefit plan, an employee must work full-time for the employer a specific number of years. This process is called vesting. You are vested (entitled to a pension benefit) in the Maryland State Retirement System after 5 years of service.
The Optional Retirement Plan is a defined contribution plan. Under this type of pension, the employer deposits a defined percentage of your salary into an investment program, authorized by the employee, on an annual basis. This money accumulates, with interest, until the time of retirement. At the time of retirement, depending on investment methods, the employee may either receive a lump sum or monthly payments.
Vesting in the Optional Retirement Plan occurs immediately. For this reason, many faculty and associate staff members use this program because they find it more portable should they leave university employment.
In either case, your mandatory participation in these programs is set up so that all contributions going into the plan, on your behalf, are made by the employer.