An Act To Restore Equity to the Maine State Retirement System
Maine Legislature, Session 123, LD 1693
Committee Amendment CA_A-SA_F_S638 (Senate)
Amends: 5 MRSA §17852

SENATE AMENDMENT" F''' to COMMITTEE AMENDMENT "A" to S.P. 600, 
L.D. 1693, Bill, "An Act To Restore Equity to the Maine State Retirement System" 
Amend the amendment by striking out everything after the substitute title and before 
the summary and inserting the following: 
'Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'Sec. I. 5 MRSA §17852, sub-§3-B is enacted to read: 
3-B. Teachers with fewer than 10 years of creditable service on July 1, 1993. 
Notwithstanding subsection 3-A, for a teacher who was employed as a teacher and who 
was a member on July 1, 1993 and did not have 10 years of creditable service, the amount 
of the service retirement benefit for members qualified under section 17851, subsection 3 
is computed in accordance with subsection 1, except that the benefit is reduced by 3% for 
each year that the member's age precedes 62 years of age. 
Sec. 2. 
Teacher members receiving service retirement benefits on 
effective date of Act. Teacher members of the state employee and teacher retirement 
system governed by the Maine Revised Statutes, Title 5, chapter 423 receiving service 
retirement benefits on the effective date of this Act who would receive an increased 
service retirement benefit if their benefit had been calculated using the 3% reduction 
factor provided in this Act must receive such an increased benefit retroactive to their 
effective date of retirement. 
Sec. 3. Teacher members who retire on or after the effective date of this 
Act. As teacher members of the state employee and teacher retirement system governed 
by the Maine Revised Statutes, Title 5, chapter 423 retire on or after the effective date of 
this Act, their benefits based on service earned on or after the effective date of this Act 
and their benefits based on service earned prior to the effective date of this Act must be 
calculated using the 3% reduction factor specified in Title 5, section 17852, subsection 3-
B. 
Sec. 4. Funding benefits under this Act. This section provides funding for the 
benefits provided under this Act. 
Page \- 123LRl016(11)-1 
SENATE AMENDMENT 
SENATE AMENDMENT"~ "to COMMITTEE AMENDMENT "A" to S.P. 600, L.D. 1693 
1. For purposes of this section, the following terms have the following meanings: 
A. "Cost of this Act" means the total of: 
(I) All past service liabilities created by the benefits provided in this Act; 
(2) The normal cost payments for fiscal year 2008-09 associated with the 
benefits provided in this Act; and 
(3) The fiscal year 2008-09 unfunded liability supplemental payment. 
B. "Fiscal year 2008-09 unfunded liability supplemental payment" means payment of 
an amount toward the unfunded liability that equals the first year's payment of a 20-
year amortization of the amount of the fiscal year 2007-08 unfunded liability 
payment that is deferred in order to pay the cost of this Act. 
C. "Unfunded liability" means the unfunded actuarial liability of the Maine Public 
Employees Retirement System attributable to teachers under the Constitution of 
Maine, Article IX, Section 18-B. 
D. "Unfunded liability payment" means the amount appropriated or allocated by the 
Legislature for the Maine Public Employees Retirement System as the employer 
contribution amount paid toward the unfunded liability. 
2. Notwithstanding Title 5, section 17160, the employer contribution amount paid 
toward the unfunded liability may be less for fiscal year 2007-08 than the amount paid for 
that purpose during fiscal year 2006-07, as long as the Board of Trustees of the Maine 
Public Employees Retirement System takes an action, consistent with sound actuarial 
practice, to reduce the required unfunded liability payment in fiscal year 2007-08. 
A. If, on or before the effective date of this Act, the Board of Trustees of the Maine 
Public Employees Retirement System takes an action to reduce the required unfunded 
liability payment for fiscal year 2007-08 by an amount that leaves a balance sufficient 
to fund the cost of this Act, that balance is committed by this Act to fund the cost of 
this Act. 
B. If, on or before the effective date of this Act, the Board of Trustees of the Maine 
Public Employees Retirement System does not take an action that reduces the 
required unfunded liability payment for fiscal year 2007-08 by an amount sufficient 
to fund the cost of this Act, the entire amount of the fiscal year 2007-08 unfunded 
liability payment must be applied toward the unfunded liability. 
3. 
Notwithstanding subsection 2, the entire amount of the fiscal year 2007-08 
unfunded liability payment: 
A. Must be paid over to the Maine Public Employees Retirement System; and 
B. Is deemed the employer contribution amount paid toward the unfunded liability 
for fiscal year 2007-08 for the sole purpose of calculating the required unfunded 
liability payment for fiscal year 2008-09 and thereafter pursuant to Title 5, section 
17160. 
4. Beginning in fiscal year 2009-10, the increase in the normal cost resulting from 
the benefits provided under this Act and any increase in unfunded liability payments 
resulting from the application of the 2007-08 unfunded liability payment to fund the cost 
SENATE AMENDMENT 
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II 
SENATE AMENDMENT" F" to COMMITTEE AMENDMENT "A" to S.P. 600, L.D. 1693 
of this Act must be appropriated or allocated by the Legislature from the General Fund or 
other appropriate funds in accordance with law. 
Sec. 5. Contingent effective date. Since the Constitution of Maine, Article IX, 
Section 18-A requires the Maine Public Employees Retirement System to be funded 
annually on an actuarially sound basis and prohibits the creation of unfunded liabilities 
except those resulting from experience losses, sections 1 to 3 take effect only if the Board 
of Trustees of the Maine Public Employees Retirement System, pursuant to section 4, 
takes an action to reduce the required unfunded liability payment for fiscal year 2007-08. 
Within 10 days of the effective date of this Act, the Board of Trustees of the Maine 
Public Employees Retirement System shall notifY the Secretary of the Senate, the Clerk 
of the House of Representatives and the Revisor of Statutes whether, pursuant to section 
4, it took an action on or before the effective date of this Act to reduce the required 
unfunded liability payment for fiscal year 2007-08.' , 
SUMMARY 
This amendment does the following: 
I. It reduces the early retirement reduction factor from 6% to 3% for teachers 
employed on July I, 1993 who did not have 10 years of creditable service. This corrects 
what is known as the "cliff' provision; 
2. It allows the Board of Trustees of the Maine Public Employees Retirement System 
to reduce the payment in fiscal year 2007-08 toward the unfunded actuarial liability of the 
teacher retirement program and, if such a reduction is made, to apply the balance of the 
amount appropriated for that purpose to fund the past service liabilities created by the 
benefits provided under the amended bill, the increase in normal cost in fiscal year 2008-
associated with the benefits provided under the amended bill and any increased 
unfunded liability payments required in fiscal year 2008-09 resulting from the reduced 
unfunded liability contribution in fiscal year 2007-08; and 
3. 
It provides that the substantive changes to the state employee and teacher 
retirement system accomplished by this legislation take effect only if the Board of 
Trustees of the Maine Public Employees Retirement System determine that the reduction 
in the required unfunded liability payment in fiscal year 2007-08 is consistent with sound 
actuarial practice. n 
SPONSORED BY: lkJ5a
J2Y L [h.erl11a V 
(Senator SHERMAN) 
COUNTY: Aroostook 
FISCAL SOrE REQLIRED 
(See attached) 
SENATE AMENDMENT 
Approved: 04/15108 Mac:.. 
LD 1693 
LR 2016(11) 
An Act To Restore Equity to the Maine State Retirement System 
Fiscal Note for Senate Amendment" Y " to Committee Amendment" A" 
Sponsor: Sen. Sherman of Aroostook 
Net Cost (Savings) 
General Fund 
Highway Fund 
Appropriations/Allocations 
General Fund 
Highway Fund 
Federal Expenditures Fund 
Other Special Revenue Funds 
Federal Block Grant Fund 
Other Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
2007-08 
$0 
$0 
$0 
$0 
$0 
$0 
$0 
$0 
2008-09 
$0 
$0 
$0 
$0 
$0 
$0 
$0 
$0 
Projections 
2009-10 
($4,474,108) 
($313,240) 
($4,474,108) 
($313,240) 
($477,401) 
($287,717) 
($28,424) 
($219,848) 
Projections 
2010-11 
($4,686,628) 
($328,119) 
($4,686,628) 
($328,119) 
($500,077) 
($301,383) 
($29,774) 
($230,291) 
This amendment reduces the 2008-2009 biennial cost of the bill by $53,600,000 with $51,900,000 being the decreased 
cost to the un funded actuarial liability and $1,700,000 being the decreased cost associated with the normal cost 
component for fiscal year 2008-09. 
This amendment reduces the total cost of the bill through June 30,2028 by $172,122,287. Of that amount, the 
decrease to the unfunded liability payments will be $119,072,708 and the decrease to the normal cost component 
payments will be $53,049,579. 
As amended, reducing the early retirement reduction factor from 6% to 3% for only those teachers who were members 
of the Maine Public Employees Retirement System as of June 30, 1993 and are currently subject to the 6% reduction 
factor will result in a 2008-2009 biennial cost of $43,200,000, with $42,000,000 being the increased cost to the 
unfunded actuarial liability and $1,200,000 being the increased normal cost component for fiscal year 2008-09. 
LR20 16( 11) - Fiscal Note - Page 1 of 2 
As amended, because this legislation proposes to fund the current biennium cost of this provision by utilizing a 
portion of the $199,295,540 already appropriated and/or allocated in fiscal year 2007-08 to the Maine Public 
Employees Retirement System (MainePERS) for the employer's contribution to the unfunded liability, no additional 
General Fund appropriation is required in the 2008-2009 biennium. However, based on current projections, reducing 
the amount of funds to be applied to existing unfunded actuarial liability in fiscal year 2007-08 and providing the 
additional benefit will result in total additional payments through June 30, 2028 of $133,415,808. Of that amount, the 
total increase to the unfunded liability payments will be $95,969,047 and the increase to the normal cost component 
payments will be $37,446,761. 
LR20 16(11) - Fiscal Note - Page 2 of 2