(a) Contribution limitations.
(1) Notwithstanding any other provision in this Division, to the extent required under the Internal Revenue Code, the annual additions described in this Section that are allocated in any limitation year to the retirement accounts of any participant must not exceed the lesser of:
(A) $30,000, effective January 1, 1995, or $40,000, effective January 1, 2002 (the “dollar limitation”); as adjusted by the Internal Revenue Service from time to time to reflect cost of living increases; or
(B) 25 percent of the participant's compensation as defined below, or 100 percent of the participant's compensation, effective January 1, 2002, (the "percentage limitation").
(2) For purposes of this Section, the annual addition must be:
(A) County contributions;
(B) required participant contributions;
(C) forfeitures, but only if the retirement savings plan permits forfeitures to be added to the participant's account; and
(D) after-tax contributions.
(3) In this Section, for purposes of applying Section 415 of the Internal Revenue Code, “compensation” has the same meaning as provided in Treasury Regulation Section 1.415-2(d)(1), including amounts contributed at the election of the participant that are not includible in the gross income of the participant, under Sections 402(g)(3), 125, 457, and (effective January 1, 2001) 132(f)(4) of the Internal Revenue Code. Effective for limitation years after December 31, 2008, compensation must include amounts required to be included by Section 414(u)(12) of the Internal Revenue Code.
(4) For purposes of this Section, the maximum dollar limitation of $30,000 in subsection (a)(1)(A), or $40,000 effective January 1, 2002 and the maximum dollar limitation of $150,000 in subsection (b), or $200,000, effective January 1, 2002, must be automatically increased as permitted by United States Treasury Regulations to reflect cost-of-living adjustments.
(5) Amounts transferred from the State of Maryland Retirement or Pension Systems to the Board under Section 33-115(a)(4) do not constitute an annual addition under paragraph (2).
(b) Compensation limitation. For purposes of this retirement savings plan, for plan years beginning on or after January 1, 2002, only the first $200,000 of a participant's regular earnings, or any other amount permitted under Internal Revenue Code Section 401(a)(17), must be taken into account.
(c) Effective July 1, 2007, all contributions made to a participant’s account within 2 ½ months after termination of employment or within the limitation year that contains the termination from employment must be considered compensation for purposes of Internal Revenue Code Section 415, as amended.
(d) For purposes of this Section, limitation year means calendar year.
(e) For purposes of applying this Section, all defined contribution plans maintained by the County must be aggregated. (1994 L.M.C., ch. 13, § 2; 1996 L.M.C., ch. 27, § 1; 1998 L.M.C., ch. 30, § 2; , § 1; , § 1; , § 1; , § 1; , § 1; , § 1; , § 1; , §1.)
Editor's note—2003 L.M.C., ch. 3, § 2, states: Rule of Interpretation. The amendments made by Section 1 of this Act must be interpreted to comply with requirements stated in letters issued on December 11, 2002, and January 14, 2003, by the Internal Revenue Service to the County regarding the continued qualification of County employee retirement plans. 2003, ch. 3, § 3, states, in part: (i) The amendments made by Section 1 of this Act to Code Section 33-118(a)(3) take effect January 1, 1998. (j) The amendments made by Section 1 of this Act to Code Section 33-118(b) take effect January 1, 2000.
1996 L.M.C., ch. 27, § 1 incorrectly codified 33-118(a)(6) as 33-120(a)(5).1
