LA PLATA, Md. — Charles County has approved a new pension plan amendment that is expected to save the county more than $1.26 million by reducing long-term financial liabilities and aligning with Maryland’s state retirement rules.
The change, Amendment 2025-1, was presented by Deputy Director of Human Resources Megan Donnick and Benefits Administrator Kim Pelczar during a public meeting on May 13. It introduces updates to how the county manages the retirement accounts of employees who leave before becoming eligible for a pension.
What the Amendment Does
As of July 1, 2024, the county identified 258 former employees who left county government before earning full pension eligibility. These employees are considered non-vested, which means they didn’t stay with the county long enough to qualify for retirement benefits.
To become vested, an employee must work for the county for at least five years. After reaching that milestone, they are eligible to receive pension payments upon retirement. Those who leave earlier don’t qualify for a pension, but they can still withdraw their contributions plus interest.
Under the approved amendment:
- The county can now automatically issue payouts to former employees with account balances under $1,000.
- For balances between $1,000 and $7,000, funds can be rolled over into an individual retirement account (IRA) outside of the county system.
These changes are allowed under IRS rules and are expected to help the county stop paying 5% annual interest on inactive accounts — a major factor in the projected $1.26 million in savings.
Aligning With State Policy
The amendment also removes a clause that limited pension benefits for employees who transferred service from another retirement plan and retired within five years. The Maryland General Assembly eliminated that restriction in 2024, and the county’s change ensures its plan now matches state law.
Learn More
For background presentations leading up to the amendment, read our earlier coverage: Charles County Considers Pension Plan Changes for Former Employees.
For more information about the Charles County Pension Plan, contact the Charles County Department of Human Resources at 301-645-0585.
See the Charles County Pension Plan Amendment presentation here.
Contact our news desk at news@thebaynet.com
