An Act To Amend the Laws Relating to the Maine State Retirement System
Maine Legislature, Session 123, LD 1738
Committee: Labor
Sponsors: CLARK, STRIMLING, BURNS, CRESSEY, DRISCOLL, JACKSON, THOMAS, TUTTLE, SULLIVAN
Amends: 3 MRSA §801, 3 MRSA §802, 4 MRSA §807, 4 MRSA §1252, 4 MRSA §1361, 5 MRSA §17103, 5 MRSA §17152, 5 MRSA §17154, 5 MRSA §17159, 5 MRSA §17251, 5 MRSA §17253, 5 MRSA §17808, 5 MRSA §17953, 5 MRSA §18360, 5 MRSA §18407, 5 MRSA §18409, 5 MRSA §18533, 5 MRSA §18802-A

Legislative Document 
No. 1738 
H.P. 1221 
House of Representatives, March 26, 2007 
An Act To Amend the Laws Relating to the Maine State Retirement 
System 
Submitted by the Maine State Retirement System pursuant to Joint Rule 204. 
Reference to the Committee on Labor suggested and ordered printed. 
Presented by Representative CLARK of Millinocket. 
Cosponsored by Senator STRIMLING of Cumberland and 
11/~ 
frJ.7Il~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BURNS of Berwick, CRESSEY of Cornish, DRISCOLL of Westbrook, 
JACKSON of Allagash, THOMAS of Ripley, TUTTLE of Sanford, Senator: SULLIVAN of 
York. 
Printed on ret:ydeo paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 3 MRS A §752, as enacted by PL 1985, c. 507, § 1, is repealed. 
Sec. 2. 3 MRSA §801, sub-§l, as amended by PL 2005, c. 516, §1, is further 
amended to read: 
1. Membership mandatory. Every Legislator serving in the Legislature on or after 
December 3, 1986 is a member of the Maine Legislative Retirement System, except that 
any Legislator who is a member of the Maine State Retirement System on December 2, 
1986 may continue to be a member of that system instead of becoming a member of the 
Maine Legislative Retirement System, and any Legislator who is a public school teacher 
or an employee of the Maine Community College System on leave of absence for the 
purpose of serving in the Legislature continues to be a member of the Maine State 
Retirement System and to have contributions deducted from the member's legislative 
earnable compensation as provided by Title 5, section 17701. 
A Legislator who 
terminates employment from a position requiring membership in the Maine State 
Retirement System no longer contributes to the Maine State Retirement System and, if 
qualified, is eligible to become a benefit recipient under Title 5, section 17804. Upon 
such termination, the Legislator becomes a member of the Maine Legislative Retirement 
System. We Except as provided in section 802, subsection 4, paragraph A, creditable 
service granted under the Maine State Retirement System may not be transferred to the 
Maine Legislative Retirement System. A member ceases to be a member when the 
member withdraws the member's contributions, becomes a beneficiary as a result of the 
member's own retirement or dies. 
Sec. 3. 3 MRSA §802, sub-§4, ~A, as enacted by PL 1985, c. 507, §1, IS 
amended to read: 
A. 
Any member who has not withdrawn his the member's accumulated 
contributions with the Maine State Retirement System and is not a benefit recipient 
under Title 5, section 17804 may, upon becoming a Legislator, have his the member's 
Maine State Retirement System contributions and membership service transferred to 
his the member's account with the Maine Legislative Retirement System and all 
creditable service resulting from his membership in the Maine State Retirement 
System shall be ~ creditable service in the Maine Legislative Retirement System. 
All funds in the Maine State Retirement System contributed by the State on account 
of the member's employment shall must be transferred to the Maine Legislative 
Retirement System and shall must be used to liquidate the liability incurred by reason 
of his the member's previous employment. The State shall make 5tleh contributions, 
from time to time, as may be necessary to provide the benefits under the Maine 
Legislative Retirement System for the member as that have accrued to him the 
member by reason of his the member's previous employment and may accrue to him 
the member by reason of his membership in the Maine State Retirement System. 
Sec. 4. 4 MRSA §807, sub-§3, ~, as amended by PL 2003, c. 278, §2, is 
further amended to read: 
M. 
A law enforcement officer, as defined in Title 29-A, section 101, subsection 30, 
who is not an attorney but who is representing the State in the prosecution of a traffic 
infraction, as defined in Title 29-A, section 10 1, subsection 85, when represent. : 'on 
in that matter has been approved by the prosecuting attorney; 6f 
Sec. 5. 
MRSA §807, sub-§3, ~, as enacted by PL 2003, c. 278, §3, is 
amended to read: 
N. 
A person who is not an attorney, but is representing the State under section 807-
A,;".,m: 
Sec. 6. 4 MRSA §807, sub-§3, ~O is enacted to read: 
O. A person who is not an attorney, but who is representing a party in any hearing, 
action or proceeding before the Maine State Retirement System. 
Sec. 7. 4 MRSA §1252, as enacted by PL 1983, c. 853, Pt. C, §§15 and 18, is 
repealed. 
Sec. 8. 4 MRS A §1358, sub-§I, ~B, as repealed and replaced by PL 1985, c. 
693, § 11, is amended to read: 
B. 
Whenever the annual percentage change in the Consumer Price Index from July 
st to June 30th exceeds 4%, the board shall adjust allowances as set out in paragraph 
A and shall report the adjustment and the actual increase or decrease in the Consumer 
Price Index to the Legislature 6w=ffig Qy February Jg of the following year. 
Sec. 9. 4 MRSA §1361, sub-§I, as amended by PL 1999, c. 744, §6 and as 
affected by § 17, is further amended to read: 
1. Election of benefit for different beneficiary. The recipient may elect to have the 
reduced retirement benefit paid under the same option to a different beneficiary except 
when the former spouse is named as retirement beneficiary at the time the divorce is 
granted, in which case the election may be made only under the following conditions: 
A. 
The spouse or former spouse who was originally named as retirement 
beneficiary must have been the sole beneficiary of the reduced retirement benefit 
under section 1357, subsection 2, paragraph B, C, D or E; and 
B. 
The recipient and the spouse or former spouse who was originally named 
retirement beneficiary must agree to the change of beneficiary. 
Prior to this 
agreement, the executive director shall ensure that the spouse or former spouse who 
was originally named as retirement beneficiary has been counseled by an employee 
of the retirement system regarding the financial effect of giving up rights as a 
beneficiary and has signed a statement that the information has been received and 
understood. 
Sec. 10. 5 MRSA §17103, sub-§7, as amended by PL 1993, c. 410, Pt. L, §18, is 
further amended to read: 
7. Administrative and financial decisions. The board shall make the final decision 
on all 
matters 
pertaining 
to 
administration, 
actuarial 
assumptions, 
actuarial 
recommendations and the reserves and the investments of the retirement system and 
direct cash receipts as it considers appropriate, notwithstanding section 131. 
Notwithstanding any other provision of law, the board, as the employer of the staff of the 
retirement system and as the executive body, shall establish policies and make decisions 
on matters pertaining to the administration and operations of the Maine State Retirement 
System as an independent agency, including, but not limited to, personnel and payroll, 
accounting and financial matters, acquisition and disposition of capital assets and data 
processing. The board may delegate these duties and responsibilities as it considers 
appropriate. Board policies regarding the operation of its administrative offices must be 
consistent with the applicable state and federal health and safety requirements and 
programs of the Bureau of General Serviees. The Department of Administrative and 
Finaneial Seryiees shall provide survivor benefit payroll, retirement payroll and 
eontribution refund services and, at their option, may provide other services under these 
ehapters to the Maine State Retirement System at the request of the board. 'Nhen the 
board utilii3es the services under these chapters, it shall comply with the requirements and 
procedures of those seryiees. 
A. 
If the decision is related to or results in rules, rules must be adopted as provided 
in subsection 4. 
B. 
If the decision determines the rights, credits or privileges of an individual 
member or group of members, the determination is considered an adjudicatory 
proceeding under chapter 375, subchapter I¥ 1. and may be made only after the 
giving of notice as required in that subchapter and after hearing if a hearing is 
requested by a person whose rights, credits or privileges are to be determined. A 
hearing must be conducted in accordance with chapter 375. 
Sec. 11. 5 MRS A §17105, sub-§1, ~G, as enacted by PL 1995, c. 368, Pt. G, §5, 
is repealed. 
Sec. 12. 5 MRS A §17152, sub-§4, as amended by PL 1989, c. 409, §§3 and 12, 
is repealed. 
Sec. 13. 5 MRS A §17152, sub-§5, as amended by PL 1995, c. 368, Pt. G, §6, is 
repealed. 
Sec. 14. 5 MRSA §17152, sub-§6, as amended by PL 1995, c. 368, Pt. G, §6, is 
repealed. 
Sec. 15. 5 MRSA §17152, sub-§7, as enacted by PL 1989, c. 409, §§3 and 12, is 
repealed. 
Sec. 16. 5 MRSA §17154, sub-§1, as enacted by PL 1985, c. 801, §§5 and 7, is 
repealed. 
Sec. 17. 5 MRSA §17154, sub-§4, as enacted by PL 1985, c. 801, §§5 and 7, is 
repealed. 
Sec. 18. 5 MRS A §17157, sub-§2, as amended by PL 1989, c. 95, §2, is repealed. 
Sec. 19. 5 MRSA §17159, sub-§I, ~A, as amerided by PL 1999, c. 731, Pt. CC, 
§2, is further amended to read: 
A. 
"Early retirement" means retirement before normal retirement age with a 
reduced retirement benefit as provided by section 17851-A, subsection 4, section 
17852, subsection 3 or 3-A or subsection 10, paragraph C or C-l; section 17857, 
subsection 3-A; section 18452, subsection 3; or section 18462, subsection 3. 
Sec. 20. 5 MRSA §17251, as amended by PL 1989, c. 409, §§4 and 12, is further 
amended to read: 
§17251. Establishment 
The Retirement Allowance Fund is established in which shall must be accumulated 
all reserves required for the payment of benefits under this Part, other than reserves in the 
Members' Contribution Fund, the SurviYors' Beflefit FUfld afld the Disability Retiremeflt 
Beflefit FUfld. 
Sec. 21. 5 MRSA §17253, sub-§I, as amended by PL 1987, c. 739, §§8 and 48, 
is further amended to read: 
1. Computation. The employer contribution rate shall be ~ determined as the 
percentage of the members' earnable compensation payable during the members' periods 
of membership required to provide the difference between the total liabilities for 
retirement allowances, survivors' benefits and disability retirement benefits not provided 
by the members' accumulated contributions and the amount of the assets in the 
Retirement Allowance Fund. 
Sec. 22. 5 MRSA c. 421, sub-c. 4, art. 5, as amended, is repealed. 
Sec. 23. 5 MRSA c. 421, sub-c. 4, art. 6, as amended, is repealed. 
Sec. 24. 5 MRS A c. 421, sub-c. 4, art. 7, as amended, is repealed. 
Sec. 25. 5 MRSA c. 421, sub-c. 4, art. 8, as amended, is repealed. 
Sec. 26. 5 MRSA §17808, as enacted by PL 1985, c. 801, §§5 and 7, is amended 
to read: 
§ 17808. Payment from certain funds 
All benefits payable under this chapter shall must be paid from the Retirement 
Allowance Fund, except those payable from the Members' Contribution Fund afld the 
Survivors' Beflefit FUfld or as specifically provided in this chapter. 
Sec. 27. 5 MRS A §17933, sub-§2, as enacted by PL 1989, c. 409, §§8 and 12, is 
amended to read: 
2. Cost of benefits. The cost of benefits based upon service credits earned before 
and during disability 5lnill must be charged to the Disability Retirement Benefit 
Retirement Allowance Fund. The cost of benefits based upon service credits earned after 
becoming reemployed 5lnill must be charged to the account of the employer through 
whom the service credits were earned. 
Sec. 28. 5 MRSA §17953, sub-§6, as amended by PL 1991, c. 469, §2, is further 
amended to read: 
6. Transfer of funds. If benefits are paid under subsections 3 to 5-B, the amount of 
the deceased qualifying member's accumulated contributions in the Members' 
Contribution Fund is transferred to the Survivors' Benefit Fund and the amount of the 
qualifying member's accumulated contributions in the Retirement Allowance Fund IS 
transferred to the Sm=vivors' Benefit Retirement Allowance Fund. 
Sec. 29. 5 MRSA §18360, sub-§2, ~E, as amended by PL 2001, c. 114, §5, is 
further amended to read: 
E. 
Except as provided in paragraph I, a member who served in the armed forces 
during any federally recognized period of conflict, as defined in Title 37 B, section 
504, subsection 4, paragraph AI, subparagraph (3), is entitled to service credit under 
this subsection. 
For purposes of this paragraph, "federally recognized period of 
conflict" means World War I, April 6, 1917 to November 11, 1918 or to March 31, 
1920 if service was in Russia; World War II, December 7, 1941 to December 3l, 
1946; the Korean Conflict, June 27, 1950 to January 3l, 1955; the Vietnam War, 
August 5, 1964 to May 7, 1975 and the period beginning on February 28, 1961 and 
ending on May 7, 1975 in the case of a veteran who served in the Republic of 
Vietnam during that period; and the Persian Gulf War, August 7, 1990 to the date that 
the United States Government recognizes as the end of the Persian Gulf War. 
Sec. 30. 5 MRSA §18407, sub-§4, ~B, as enacted by PL 1985, c. 801, §§ 5 and 
7, is amended to read: 
B. 
Whenever the annual percentage change in the Consumer Price Index from July 
st to June 30th exceeds 4%, the board shall make whatever adjustments in the 
retirement benefits are necessary to reflect an annual increase or decrease of 4% and 
shall report that adjustment and the actual increase or decrease in the Consumer Price 
Index to the Legislature during the month ofb: February .lg of the following year. 
Sec. 31. 5 MRSA §18409, as enacted by PL 1985, c. 801, §§5 and 7, is amended 
to read: 
§18409. Payment from certain funds 
All benefits payable under this chapter 5lnill must be paid from the Retirement 
Allowance Fund, except those payable from the Members' Contribution Fund and the 
Survivors' Benefit Fund or as specifically provided in this chapter. 
Sec. 32. 5 MRSA §18533, sub-§2, as enacted by PL 1989, c. 409, §§11 and 12, is 
amended to read: 
2. Cost of benefits. The cost of benefits based upon service credits earned before 
and during disability shall must be charged to the Disability Retirement Benefit 
Retirement Allowance Fund. The cost of benefits based upon service credits earned after 
becoming reemployed shall must be charged to the account of the employer through 
whom the service credits were earned. 
Sec. 33. 5 MRS A §18553, sub-§6, as amended by PL 1991, c. 469, §5, is further 
amended to read: 
6. Transfer of funds. If benefits are paid under subsections 3 to 5-B, the amount of 
the deceased qualifying member's accumulated contributions in the Members' 
Contribution Fund is transferred to the Survivors' Benefit Fund and the amount of the 
qualifying member's accumulated contributions in the Retirement Allov.'ance Fund is 
transferred to the Survivors' Benefit Retirement Allowance Fund. 
Sec. 34. 5 MRS A §18557, sub-§6, as enacted by PL 1985, c. 801, §§ 5 and 7, is 
amended to read: 
6. 
Member contribution. A participating local district may require each of its 
members to make a contribution, not to exceed 114 of 1 % of earnable compensation, te 
the Survivors' Benefit Fund, as long as he the member is employed. 
Sec. 35. 5 MRS A §18557, sub-§7, as enacted by PL 1985, c. 801, §§ 5 and 7, is 
amended to read: 
7. Payment. All survivor benefit contributions by participating local districts whieh 
that have elected survivor benefits and all contributions by members of those districts 
shall must be paid into the Survivors' Benefit Retirement Allowance Fund. 
Sec. 36. 5 MRS A §18802-A, sub-§l, as enacted by PL 1997, c. 12, §1 and as 
affected by §2, is amended to read: 
1. 
Composition; designation. 
The Participating Local District Advisory 
Committee, referred to in this chapter as the "advisory "the advisory committee," is 
composed of the following 12 members: 
A. 
Five voting members who are members of labor organizations that represent 
participating local district employees, appointed by the Governor after being 
nominated duly designated by their respective labor organizations as follows: 
(l) 
One member nominated duly designated by the Maine Education 
Association; 
(2) One member nominated duly designated by the American Federation of 
State, County and Municipal Employees; 
(3) 
One member nominated duly designated by the Service Employees 
International Union; 
(4) One member nominated duly designated by the International Association of 
Fire Fighters; and 
(5) One member nominated duly designated by the International Brotherhood of 
Teamsters, Chauffeurs, Warehousemen and Helpers of America; 
B. 
Five voting members who represent participating local districts appointed by the 
Goyernor after being nominated duly designated as follows: 
(1) 
Three members nominated duly designated by the Maine Municipal 
Association; and 
(2) Two members nominated duly designated by the Maine School Management 
Association; 
C. 
One nonvoting member appointed duly designated by the Governor; and 
D. 
The executive director or the executive director's designee, to serve as an ex 
officio nonvoting member. 
Sec. 37. 5 MRSA §18802-A, sub-§4, as enacted by PL 1997, c. 12, §1 and as 
affected by §2, is amended to read: 
4. Term. The terms of the members are as follows. 
A. 
Each member, except the initial appointees, shall serve serves a term of 5 years. 
B. 
A member shall continue to serve after the expiration of that member's term until 
a qualified successor is appointed designated. 
The member's continuation as a 
member does not change the expiration of that member's term. 
C. 
The term of a member appointed designated to succeed a member whose term 
has expired expires 5 years after the expiration date of the term of the previous 
member, regardless of the effective date of the new appointment designation. There 
is no limit to the number of terms to which a member may be appointed designated. 
D. 
The appointing designating authority shall appoint designate a person to fill a 
vacancy caused by death, resignation or ineligibility within 60 days. 
This 
appointment designation is for the unexpired portion of the term and must be made 
from a nomination designation provided by the organization the former member 
represented, as provided by subsection 1. With the agreement of the member being 
replaced and of the nominating and appointing authorities designating authority, the 
member being replaced shall serve serves until a replacement is appointed 
designated. Otherwise, a vacancy exists until a replacement is appointed designated. 
E. 
The terms of the initial appointments are as follows. 
(1) Members who represent participating local district employees are appointed 
by the Governor, one each, to terms of 1, 2, 3, 4 and 5 years. 
(2) Members who represent participating local districts are appointed by the 
Governor, one each, to terms of 1, 2, 3, 4 and 5 years. 
F. 
A member is considered to have resigned if: 
(I) The member severs the affiliation with the organization that nominated 
designated the member in accordance with subsection 1; or 
(2) 
The member is absent from 3 consecutive meetings of the advisory 
committee without good cause as determined by the advisory committee. 
SUMMARY 
The bill makes the following changes to the laws govermng the Maine State 
Retirement System. 
1. It removes language that became obsolete when the retirement system became a 
public instrumentality in 1993. 
2. 
It clarifies when Maine State Retirement System creditable servIce may be 
transferred to the Maine Legislative Retirement System. 
3. It amends the laws that govern when the retirement system must report to the 
Legislature regarding the occurrence of a Consumer Price Index increase that exceeds the 
statutory cap on cost-of-living adjustments in retirement benefits for retirees from the 
judicial plan and the participating local district plans. 
4. It gives judges the same retirement beneficiary provision as was enacted for other 
system members by Public Law 2005, chapter 560. 
5. It repeals references to health insurance and health insurance funds, in which the 
retirement system no longer serves a role. 
6. It repeals some sections of law and amends other sections that refer to funds that 
are no longer segregated by the retirement system into separate funds. 
7. It clarifies that "early retirement" includes retirement from the 1998 Special Plan 
prior to reaching the normal retirement age of that plan. 
8. It makes clear that the employer contribution rate must support the payment of 
survivors' benefits and disability retirement benefits. 
This is not a change but a 
clarification. 
9. 
It removes an incorrect cross-reference and inserts a definition of "federally 
recognized period of conflict" for participating local district members that is consistent 
with that for other retirement system members. 
10. It permits an individual to be duly designated as a member of the Participating 
Local District Advisory Committee by respective constituent groups who formerly made 
nominations to the Governor. It removes the requirement that those individuals also be 
1 
appointed by the Governor. It also deletes obsolete requirements pertaining to initial 
terms of committee members. 
11. It provides that the laws governing the unauthorized practice of law do not apply 
to a person who is not an attorney who is representing a party in any hearing, action or 
proceeding before the Maine State Retirement System.