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SB 812

Relating to the landowner preference program.

2025 Regular Session

Creates a new catastrophic disability benefit for LEOPS and SPRS, replacing two-thirds AFC with 100% AFC plus actuarial annuity for permanently disabled members.

Effective date, January 1, 2026.
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Bill Summary · SB 812

Summary — SB 812 (2025): Law Enforcement Officers’ Pension System & State Police Retirement System — Line‑of‑Duty Catastrophic Injury Disability (Maryland)

Note: Several jurisdictions use the bill number “SB 812.” This summary covers the Maryland Senate Bill 812 (introduced in the 2025 session), titled “Law Enforcement Officers’ Pension System and State Police Retirement System — Line‑of‑Duty Catastrophic Injury Disability.”

Purpose / Intent

Create a new catastrophic disability benefit for members of the Law Enforcement Officers’ Pension System (LEOPS) and the State Police Retirement System (SPRS) to provide enhanced financial protection to members who become permanently and totally disabled.

Key provisions

  • Amends Maryland State Personnel & Pensions Article (Sections 29‑109(c), 29‑110, and 29‑111).
  • Establishes a catastrophic disability standard: a member “unable to engage in any substantial gainful activity” due to a medically determinable physical or mental impairment expected to result in death or be long‑continued and indefinite (cross‑references the Internal Revenue Code §72(m)(7) definition).
  • Benefit formula for a member certified as catastrophically disabled:
    • An annuity equal to the actuarial equivalent of the member’s accumulated contributions at retirement; plus
    • A pension equal to 100% of the member’s average final compensation (AFC).
  • A member who receives the catastrophic benefit is ineligible to receive accidental, special, or ordinary disability benefits concurrently (i.e., cannot receive both).
  • Effective date: July 1, 2025.

Who is affected

  • Primary: Active members of LEOPS and SPRS who meet the catastrophic disability definition.
  • Secondary: The State (employers for SPRS and State share of LEOPS) and local governmental units that participate in LEOPS (participating governmental units, PGUs), which will face increased pension costs.

Fiscal and policy impact (legislative fiscal note)

  • Actuarial modeling (assuming 50% of current accidental/special disability claims instead receive the catastrophic benefit) estimates:
    • Increased State pension liabilities of at least $6.98 million.
    • Increase in normal cost of at least $3.65 million.
    • State pension contributions projected to rise by at least $4.57 million in FY 2027 (paid from a mix of general and special funds).
    • Projected annual contribution increases (net) — roughly:
    • FY2027: ~$4.57 million
    • FY2028: ~$4.69 million
    • FY2029: ~$4.81 million
    • FY2030: ~$4.94 million
  • Local governments (35 LEOPS PGUs) estimated to see employer contribution increases of at least $1.44 million beginning FY2027.
  • No direct revenue effect; increased expenditures are the primary fiscal consequence.
  • Note: Because the catastrophic benefit is not limited to line‑of‑duty injuries, the bill could increase the total number of disability claims, potentially raising costs above the current actuarial estimate.

Process / Timeline (selected)

  • Introduced in Maryland Senate (sponsors: Senators Bailey and Jackson) during the 2025 session.
  • Fiscal/First Reader materials dated late February 2025.
  • Bill effective July 1, 2025 if enacted.

Practical effect / considerations

  • Raises maximum disability replacement for qualifying members (100% AFC vs. current common two‑thirds AFC ceiling under many accidental/special disability calculations).
  • Changes eligibility standard (unable to engage in substantial gainful activity vs. “incapacitated for duty”) and removes the requirement that the condition arise in the line of duty for catastrophic classification — expanding coverage and fiscal exposure.
  • Implementation will require administrative updates by the State Retirement Agency and actuarial adjustments to contribution schedules.

If you want, I can:
- Extract the precise statutory language changes,
- Prepare a short one‑page briefing for agency budget staff,
- Or model alternative fiscal scenarios (e.g., different claim‑shift assumptions).

Compiled from official sources — confirm details with the bill’s official record.

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