Employees' Pension System and Teachers' Pension System - Deferred Retirement Option Program - Establishment

HB 1388 establishes a Deferred Retirement Option Program (DROP) for eligible members of Maryland's Employees' Pension System and Teachers' Pension System. The bill creates a new provision (Section 23-401.1) allowing qualifying state employees to delay formal retirement while continuing to receive pension benefits based on their service. To implement this, the State Retirement Agency must seek a specific IRS determination letter to ensure the program meets federal tax requirements. The program directly affects state employees who meet the existing service and age criteria under the pension systems, providing them an alternative to immediate retirement. This is a structural change to the pension rules, not a procedural or commemorative measure.