G50L00
Maryland Supplemental Retirement Plans
For further information contact: Jason A. Kramer Jason.Kramer@mlis.state.md.us
Analysis of the FY 2025 Maryland Executive Budget, 2024
1
Program Description
The Maryland Teachers’ and State Employees’ Supplemental Retirement Plans (MSRP)
are administered by a board of trustees, as established in Title 35 of the State Personnel and
Pensions Article. The board has responsibility over four plan options: 401(k) and 457(b) plans for
State employees; 403(b) plans for employees of State educational institutions; and a 401(a) State
matching plan that was relaunched in fiscal 2024. MSRP staff support the board of trustees’ work
in selecting investment options and overseeing operations. MSRP staff also provides educational
programs and information to State employees and human resources personnel.
MSRP finances operations through a fee imposed on members’ accounts based on a
percentage of assets in the plans and a flat-rate monthly charge. The board fee is currently
composed of a 0.0425% asset fee and a monthly per account charge of $0.50 on every account
with at least $500 (except for 401(a) match plan accounts). The board contracts with Nationwide
Retirement Solutions, Inc. (Nationwide) for plan administration. The Nationwide contract requires
a management fee of 0.0775% of assets. Therefore, the reported total participant fee is 0.11% of
plan assets and a $0.50 charge on specified accounts.
Operating Budget Summary
Fiscal 2025 Budget Increases $202,160, or 8.8%, to $2.5 Million
($ in Thousands)
Note: The fiscal 2024 impacts of statewide salary adjustments appear in the Statewide Account in the Department of
Budget and Management (DBM), and adjustments are not reflected in this agency’s budget. The fiscal 2025 impacts
of the fiscal 2024 statewide salary adjustments appear in this agency’s budget. The fiscal 2025 statewide salary
adjustments are centrally budgeted in DBM and are not included in this agency’s budget.
$2,000
$2,100
$2,200
$2,300
$2,400
$2,500
$2,600
2023 2024 Working 2025 Allowance
Special
G50L00 – Maryland Supplemental Retirement Plans
Analysis of the FY 2025 Maryland Executive Budget, 2024
2
Fiscal 2025 Overview of Agency Spending
As shown in Exhibit 1, nearly three-quarters of MSRP’s fiscal 2024 allowance is for
agency personnel costs. Other large costs include funding for office and garage leases (7%) and
contractual services (14%). MSRP’s largest contract is for investment consulting with
NFP Retirement.
Exhibit 1
Overview of Agency Spending
Fiscal 2025 Allowance
Note: The fiscal 2025 statewide salary adjustments are centrally budgeted in the Department of Budget and
Management and are not included in this agency’s budget.
Source: Governor’s Fiscal 2025 Budget Books
Personnel
$1,861,535
74%
Other Contractual
Services
$214,911
9%
Office and
Garage Rent
$178,896
7%
NFP Retirement
Investment
Consultant
Contract
$166,879
7%
Other
$82,150
3%
G50L00 – Maryland Supplemental Retirement Plans
Analysis of the FY 2025 Maryland Executive Budget, 2024
3
Proposed Budget Change
The fiscal 2025 allowance increases by $202,160 in special funds, as shown in Exhibit 2.
Exhibit 2
Proposed Budget
Maryland Supplemental Retirement Plans
($ in Thousands)
How Much It Grows:
Special Fund
Total
Fiscal 2023 Actual
$2,321
$2,321
Fiscal 2024 Working Appropriation
2,302
2,302
Fiscal 2025 Allowance
2,504
2,504
Fiscal 2024-2025 Amount Change
$202
$202
Fiscal 2024-2025 Percent Change
8.8%
8.8%
Where It Goes:
Change
Personnel Expenses
Salary increases and associated fringe benefits including fiscal 2024 COLA
and increments ..........................................................................................
$150
Other Changes
Agency share of Statewide cost allocation ...................................................
27
Wifi upgrade for MSRP offices ....................................................................
24
Other changes................................................................................................
1
Total
$202
COLA: cost-of-living adjustment
MSRP: Maryland Supplemental Retirement Plans
Note: Numbers may not sum to total due to rounding. The fiscal 2024 impacts of statewide salary adjustments appear
in the Statewide Account in the Department of Budget and Management (DBM), and adjustments are not reflected in
this agency’s budget. The fiscal 2025 impacts of the fiscal 2024 statewide salary adjustments appear in this agency’s
budget. The fiscal 2025 statewide salary adjustments are centrally budgeted in DBM and are not included in this
agency’s budget.
G50L00 – Maryland Supplemental Retirement Plans
Analysis of the FY 2025 Maryland Executive Budget, 2024
4
Personnel Data
FY 23
FY 24
FY 25
FY 24-25
Actual
Working
Allowance
Change
Regular Positions
14.00
14.00
14.00
0.00
Contractual FTEs
0.00
0.00
0.00
0.00
Total Personnel
14.00
14.00
14.00
0.00
Vacancy Data: Regular Positions
Turnover and Necessary Vacancies, Excluding
New Positions
0.00
0.00%
Positions and Percentage Vacant as of 12/31/23
1.00
7.14%
Vacancies Above Turnover
1.00
Key Observations
1. Renewal of State Match Drives Plan Participation Increase
More than a decade after the suspension of the State’s matching contributions to
employees’ supplemental retirement accounts, Chapter 100 of 2023 mandated that the State
provide an annual match of up to $600 for State employees who participate in a supplemental
retirement plan. In Section 19 of the fiscal 2024 Budget Bill, the General Assembly added
$11.95 million in general funds for this purpose, and the same amount is included in the fiscal 2025
allowance. In both years, the funding is budgeted in the Department of Budget and Management’s
Statewide Program.
The match has driven significant growth in supplemental plan participation. The 401(a)
plan, which is where the State’s match is deposited, added more than 2,000 new members in the
first six months of the match being offered. In just the first three months of the match program, the
State provided $9.9 million to employee accounts. It should be noted that the contributions are
matched in full as employees make their contributions, the State match is not prorated over the full
year. However, MSRP estimates that the full fiscal 2024 cost of the match will be $13.4 million,
about $1.4 million more than is budgeted for the program.
As shown in Exhibit 3, MSRP is projecting a significant increase in both plan membership
and contributing members in fiscal 2024 and 2025.
G50L00 – Maryland Supplemental Retirement Plans
Analysis of the FY 2025 Maryland Executive Budget, 2024
5
Exhibit 3
MSRP Members and Contributing Members
Fiscal 2011-2025 Est.
Fiscal
Year
Total
Members
%
Change
%
Eligible
Contributing
Members
%
Change
%
Eligible
2011
58,993
75%
36,184
46%
2012
58,121
-1.5%
76%
35,263
-2.5%
46%
2013
57,477
-1.1%
74%
34,373
-2.5%
44%
2014
57,486
0.0%
74%
33,932
-1.3%
44%
2015
58,311
1.4%
74%
34,302
1.1%
44%
2016
59,144
1.4%
76%
34,175
-0.4%
44%
2017
59,632
0.8%
77%
34,219
0.1%
44%
2018
60,696
1.8%
78%
34,278
0.2%
44%
2019
61,703
1.7%
79%
34,214
-0.2%
44%
2020
62,322
1.0%
80%
36,644
7.1%
44%
2021
61,655
-0.1%
79%
35,463
-3.2%
46%
2022
60,681
-1.7%
78%
31,629
-10.8%
41%
2023
61,026
0.6%
70%
34,500
9.1%
44%
2024 Est.
64,618
5.9%
73%
37,500
8.7%
48%
2025 Est.
68,533
6.1%
78%
41,250
10.0%
53%
MSRP: Maryland Supplemental Retirement Plans
Source: Governor’s Fiscal 2025 Budget Books
2. Fund Balance Near Target
As shown in Exhibit 4, MSRP closed fiscal 2023 with a fund balance of approximately
$422,000, down from just over $1 million the prior year. The amount represents 18.5% of the
agency’s operating expenses, which is slightly below the agency target of 25%. MSRP projects a
fiscal 2024 fund balance of approximately $631,000, or 27.4% of operating expenses.
G50L00 – Maryland Supplemental Retirement Plans
Analysis of the FY 2025 Maryland Executive Budget, 2024
6
Exhibit 4
Assets and Participants Fees
Fiscal 2021-2024 Est.
2021
2022
2023
2024 Est.
Net Total Assets ($ in Billions)
$5.34
$4.66
$5.32
$5.42
Plan Administrator Fees
$4,892,555
$4,091,193
$3,783,753
$3,857,344
As Percent of Assets*
0.09%
0.09%
0.07%
0.07%
Board Asset Fee
$1,450,726
$1,452,149
$1,629,367
$2,130,710
As Percent of Assets
0.03%
0.03%
0.03%
0.04%
$0.50 Monthly Charge Per Account
483,602
382,806
380,192
380,946
One-time Settlement Revenue
63,974
0
0
0
Adjustment for Timing Differences**
-33,373
0
-344,634
0
Total Board Revenue
$1,964,929
$1,834,955
$1,664,925
$2,511,656
Operating Expenses
$1,935,723
$2,123,404
$2,320,912
$2,302,211
Adjustment for Timing Differences**
0
-208,896
-44,853
0
Total Operating Expenses
$1,935,723
$1,914,508
$2,276,059
$2,302,211
Carryover Balance
$1,112,723
$1,033,170
$422,036
$631,481
Carryover Balance as Percent of
Operating Expenses
57.5%
54.0%
18.5%
27.4%
* Asset fee holidays from March 2021 to July 2021 and October 2022 to December 2022.
** Timing adjustment is needed to align with Financial Management Information System accounting. Expenditures
are budgeted on a fiscal year, while plans and revenues are on calendar years.
Note: Plan Administrator Fees are provided to Nationwide Retirement Solutions, Inc. directly and are not included in
the calculation of the fund balance.
Source: Maryland Supplemental Retirement Plans; Department of Legislative Services
3. Plan Performance Short of Benchmarks
As shown in Exhibit 5, MSRP plan options lost 13.3% in fiscal 2023, slightly worse than
plan benchmarks. Three- and 10-year returns also performed worse than benchmarks. MSRP
should comment on the reason for the plans’ poor recent performance.
G50L00 – Maryland Supplemental Retirement Plans
Analysis of the FY 2025 Maryland Executive Budget, 2024
7
Exhibit 5
MSRP Average Rates of Return
Fiscal 2021-2023
1 Year
3 Years
5 Years
10 Years
Annual Average Rates of Return as of June 30, 2023
MSRP Options
-13.3%
3.6%
5.2%
7.0%
Benchmark Indices
-12.6%
4.1%
5.0%
7.6%
Annual Average Rates of Return as of June 30, 2022
MSRP Options
-11.1%
5.8%
6.9%
8.4%
Benchmark Indices
-10.9%
5.7%
6.6%
8.1%
Annual Average Rates of Return as of June 30, 2021
MSRP Options
30.7%
13.3%
12.8%
10.3%
Benchmark Indices
12.9%
12.9%
12.4%
10.0%
MSRP: Maryland Supplemental Retirement Plans
Source: Governor’s Fiscal 2025 Budget Books
G50L00 – Maryland Supplemental Retirement Plans
Analysis of the FY 2025 Maryland Executive Budget, 2024
8
Operating Budget Recommended Actions
1.
Concur with Governor’s allowance.
Analysis of the FY
2025
Maryland Executive Budget,
2024
9
Appendix 1
Object/Fund Difference Report
Maryland Supplemental Retirement Plans
FY 24
FY 23
Working
FY 25
FY 24 - FY 25
Percent
Object/Fund
Actual
Appropriation
Allowance
Amount Change
Change
Positions
01 Regular
14.00
14.00
14.00
0.00
0%
Total Positions
14.00
14.00
14.00
0.00
0%
Objects
01 Salaries and Wages
$ 1,704,375
$ 1,711,848
$ 1,861,535
$ 149,687
8.7%
02 Technical and Special Fees
2,625
3,850
5,100
1,250
32.5%
03 Communication
19,962
6,250
12,600
6,350
101.6%
04 Travel
18,786
27,074
28,000
926
3.4%
07 Motor Vehicles
10,010
11,760
11,760
0
0%
08 Contractual Services
353,792
335,484
381,790
46,306
13.8%
09 Supplies and Materials
30,757
20,000
12,724
-7,276
-36.4%
11 Equipment – Additional
6,804
12,885
12,885
0
0%
13 Fixed Charges
173,801
173,060
177,977
4,917
2.8%
Total Objects
$ 2,320,912
$ 2,302,211
$ 2,504,371
$ 202,160
8.8%
Funds
03 Special Fund
$ 2,320,912
$ 2,302,211
$ 2,504,371
$ 202,160
8.8%
Total Funds
$ 2,320,912
$ 2,302,211
$ 2,504,371
$ 202,160
8.8%
Note: The fiscal 2025 allowance does not include statewide salary adjustments budgeted within the Department of Budget and Management.
G50L00
–
Maryland Supplemental Retirement Plans
