An Act To Allow State Employees To Participate in a Deferred Retirement Option Program
Maine Legislature, Session 122, LD 0978
Committee: Labor
Sponsors: DUPLESSIE

Legislative Document 
No. 978 
H.P.688 
House of Representatives, February 24,2005 
An Act To Allow State Employees To Participate in a Deferred 
Retirement Option Program 
Reference to the Committee on Labor suggested and ordered printed. 
Presented by Representati ve LERMAN of Augusta. 
Cosponsored by Representative: DUPLESSIE of Westbrook. 
Printed on recy!,;led paper 
1f/~/J1.-mu~ 
MILLICENT M. MacFARLAND 
Clerk 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. Carriers to offer deferred retirement option program. 
By 
January 1, 2006, the Department of Administrative and Financial 
Services, Bureau of Human Resources, Division of Employee Health 
and Benefits shall require a carrier of a deferred compensation 
plan for state employees to offer a deferred retirement option 
program, 
referred to in this Act as 
"DROP," 
in which state 
employees may participate. 
The DROP must enable a state employee 
who has reached normal retirement age and chooses to participate 
to deposit up to 
100% of the equivalent of that employee's 
retirement contributions into 
a 
DROP 
account, 
which must 
be 
structured in a manner such that the account accrues interest and 
any taxes on the account are deferred until the end of the DROP 
period. 
The DROP period must be for no less than 3 years and no 
more 
than 
years. 
The 
Department 
of 
Administrative 
and 
Financial 
Services, 
Bureau 
of 
Human 
Resources, 
Division 
of 
Employee Health and Benefits shall adopt rules to implement this 
section. 
Rules adopted pursuant to this section are routine 
technical rules as defined in the Maine Revised Statutes, Title 
5, chapter 375, subchapter 2-A. 
Sec. 2. Maine State Retirement System to allow participation in 
deferred retirement option program. 
The 
Maine State Retirement 
System shall allow a state employee participating in the system 
who has reached normal retirement age to elect to participate in 
a deferred retirement option program after January 1, 2006. 
An 
employee choosing to participate in a DROP must retire and be 
rehired in the same state position and deposit all or a portion 
of the equivalent of the employee's retirement contributions into 
a DROP account in accordance with rules adopted by the Department 
of 
Administrative 
and 
Financial 
Services, 
Bureau 
of 
Human 
Resources, Division of Employee Health and Benefits. 
The Maine 
State Retirement 
System shall adopt rules to 
implement this 
section. 
Rules 
adopted pursuant to this section are routine 
technical rules as defined in the Maine Revised Statutes, Title 
5, chapter 375, subchapter 2-A. 
SUMMARY 
This bill directs 
the 
Department 
of 
Administrative 
and 
Financial 
Services, 
Bureau 
of 
Human 
Resources, 
Division 
of 
Employee Health and Benefits to require that a carrier of 
a 
deferred compensation plan for state employees also provide a 
i16 
deferred retirement option program, referred to as 
"DROP," to 
state employees. 
Under a DROP, 
a state employee retires and is 
rehired, and elects to deposit all or a part of the equivalent of 
the employee's retirement contributions into a pre-tax account 
for 3 to 5 years. 
The bill directs the Division of Employee 
Page l-LR1840(l) 
Health 
and 
Benefits 
to 
adopt 
rules 
by 
January 
1, 
2006 
to 
implement these programs, and directs the Maine State Retirement 
System to adopt rules allowing state employees who participate in 
the retirement system and have reached normal retirement age to 
elect to enroll in a DROP.