Retirement

Important! You must make a selection prior to your start date!

Welcome to UMBC!

Employee Type

Retirement Plan

Regular, Non-Exempt Employees

Regular, non-exempt employees are required to join the Maryland State Pension System.

Regular, Exempt Employees

Maryland State Pension System, or

Optional Retirement Plan (ORP) with the choice of two managing companies:

  1. Fidelity
  2. TIAA

Regular, benefit-eligible UMBC employees (exempt and faculty) must select a retirement plan: either the MD State Retirement and Pension System retirement plan OR the Optional Retirement Program (ORP). Maryland State Law requires employees to make a retirement plan selection PRIOR to their first day of employment.

Steps for New Hire Retirement Selection:

  1. Review the Choosing a Retirement Program handbook.
  2. Review the Retirement Plan Comparison Chart and the additional resources at the bottom of this webpage.
  3. Complete and submit the Retirement Selection Form via DocuSign as soon as possible but at the latest by the hiring department’s deadline.

Employees should make this selection as soon as possible to avoid any delay in the start of their benefits.

The retirement plan selection is irrevocable. If new employees have questions about the retirement plan differences, please email hrbenefits@umbc.edu.

Please note: Regular Nonexempt employees should not complete the Retirement Plan Selection form. Nonexempt employees are required by MD State Law to enroll in the MD State Employees’ Pension system.

State of Maryland Pension Plan

Plan Overview: A Defined Benefit Plan providing a predetermined, guaranteed monthly benefit check upon retirement based on salary and years of service.

Employee Contribution: Mandatory 7% pre-tax payroll deduction per paycheck.

Employer Contribution: The University contributes a State-mandated percentage of annual salary across 26 pay periods (this amount varies annually and does not alter your final benefit calculation).

Vesting: Fully vested after 10 years of eligibility service (5 years if hired prior to July 1, 2011).

Warning on Withdrawal: Terminating employment prior to vesting allows a refund of employee contributions, but withdrawing funds permanently forfeits all accrued service credit.

Plan Provider: State Retirement Agency – Maryland State Retirement and Pension System

Service Credit Types:

  • Eligibility Service: Earned by working at least 500 hours (excluding overtime) in a fiscal year; qualifies you for vesting and retirement readiness.
  • Creditable Service: Determines the actual dollar formula of your monthly pension check based on normal hours worked.

Benefit Formula & Calculation: Based on total years of creditable service and your Average Final Salary (AFS).

Additional Plan Benefits:

  • Active Death Benefit: One-time lump-sum payment of annual salary plus accumulated contributions with interest to your designated beneficiary.
  • Disability Benefits: Options for Ordinary and Accidental Disability retirement.
  • COLA Raises: Cost-of-Living Adjustments applied post-retirement.
  • Unused Sick Leave Conversion: Unused sick leave converts to additional retirement creditable service only if retiring directly from state service (within 30 days of separation).

Resources:

Optional Retirement Program (ORP)

Plan Overview: A Defined Contribution (403(b)) plan available exclusively to Regular Exempt Staff and Faculty. Retirement income depends directly on account balance, investment choices, and market performance.

Employer Contribution: The University contributes 7.25% of annual salary into your account across 20 pay periods.

Employee Contribution: 0% mandatory contribution. Employees cannot make employee contributions into the ORP account itself (voluntary savings are handled via Supplemental Accounts).

Vesting: Immediate vesting on all employer contributions. Fully portable to other higher education or public institutions nationwide.

Plan Providers: Fidelity Investments or TIAA

Important ORP Plan Rules:

  • No State COLA or Disability Benefits: No state-paid COLA or disability retirement allowances.
  • Death Benefit: Designated beneficiaries inherit the total accumulated account balance.
  • Unused Sick Leave: Sick leave balance ends upon retirement; it does not convert into service credit or payout cash.
  • Retiree Health Subsidy Eligibility: ORP retirees are eligible for continued state health coverage after 25 years of full-time service (or prorated based on state retiree health guidelines).

Voluntary Supplemental Retirement Accounts

Note: Voluntary Supplemental Retirement Accounts are available to contractual employees

Plan Overview: Voluntary savings programs that allow eligible UMBC employees to contribute additional pre-tax or Roth (after-tax) income toward retirement beyond their primary retirement plan.

Contributions: Funded via employee payroll deductions. Employees can start, adjust, or pause voluntary contributions at any point during the year with no restricted enrollment windows.

Maryland Supplemental Retirement Plans (MSRP)

Plan Overview: State-sponsored voluntary plans offering 457(b) deferred compensation and 401(k) savings options.

Plan Provider: Empower

Management Portal: MSRP / Empower Account Portal

USM Supplemental Retirement Plans

Plan Overview: University System of Maryland sponsored voluntary program offering 403(b) tax-deferred annuity and Roth 403(b) plans.

Management Portal: Retirement@Work Portal

Plan Providers: Fidelity Investments or TIAA

Important Supplemental Plan Rules:

  • IRS Double Limit: Employees can contribute up to the maximum IRS annual limit in a USM 403(b) plan and max out an MSRP 457(b) plan simultaneously in the same tax year.
  • Penalty-Free 457(b) Access: 457(b) account funds are not subject to the standard 10% IRS early withdrawal penalty upon separation from state service, regardless of your age.
  • Standard Early Penalty: 403(b) and 401(k) withdrawals made before age 59½ incur a 10% IRS early withdrawal penalty (unless separating from service at age 55 or older).
  • State Match Eligibility: MSRP contributions may qualify for a dollar-for-dollar state match (up to $600 per fiscal year) deposited into a 401(a) account when authorized in the state budget.

Additional Resources – not sure if any of these are needed but need to assess