An Act To Provide a Unifonn Retirement Plan for Corrections Officers and Mental Health Workers
Maine Legislature, Session 123, LD 1223
Committee Amendment CA_B_S392 (Senate)

COMMITTEE AMENDMENT" 13 " to S.P. 424, L.D. 1223, Bill, "An Act To 
Provide a Unifonn Retirement Plan for Corrections Officers and Mental Health Workers" 
Amend the bill by striking out all of section 10 and inserting the following: 
'Sec. 10. Corrections and Mental Health Workers Service Retirement 
Benefit Reserve; established. Notwithstanding the Maine Revised Statutes, Title 5, 
section 1536, there is established the Corrections and Mental Health Workers Service 
Retirement Benefit Reserve for the purpose of accumulating funds that would otherwise 
be payable to the Retirement Allowance Fund. The assets of the Corrections and Mental 
Health Workers Service Retirement Benefit Reserve must be held by the Maine Public 
Employees Retirement System as assets of the system apart from other assets attributable 
to the state employee and teacher retirement program of the system. These assets must be 
accounted for by the system in the manner it detennines to reflect the requirements of this 
Act. The Corrections and Mental Health Workers Service Retirement Benefit Reserve 
must be used to reserve funds to meet the full actuarial costs arising from the 
implementation of those sections of this Act that enact Title 5, section 17851-A, 
subsection 1, paragraph N and amend Title 5, section I785I-A, subsections 2,3,4 and 5, 
including nonnal cost rates for the 6 years following the effective date of this Act. Any 
funds remaining in the Corrections and Mental Health Workers Service Retirement 
Benefit Reserve at the end of each fiscal year must be carried forward to be used for the 
same purposes. Expenditures may not be made from this reserve and appropriations may 
not be considered to be made to the Retirement Allowance Fund or the Maine Public 
Employees Retirement System from this reserve except as provided in this Act or by 
further authorization of the Legislature.' 
Amend the bill in section 11 in the 8th line (page 4, line 17 in L.D.) by striking out 
the following: "State" and inserting the following: 'Public Employees' 
Amend the bill in section 11 in the last line (page 4, line 23 in L.D.) by inserting after 
the following: "section 1536." the following: 'In addition, beginning on the effective 
date of this Act, members of the Maine Public Employees Retirement System as 
identified in Title 5, section I785I-A, subsection 1, paragraph I and members who are 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" e " 
to S.P. 424, L.D. 1223 
employees of the Department of Health and Human Services as of January 1, 2000 or 
hired thereafter who are employed in mental health institutions and whose duties involve 
providing direct care, meaning services or treatment essential to everyday security, health 
and well-being, to residents or patients of those institutions or to wards of the State shall 
contribute to their individual retirement accounts an additional 1 % of earnable 
compensation until the contingency set out in section 14 of this Act is satisfied by the 
required certification. Such contributions are included as accumulated contributions as 
defined in Title 5, section 17001, subsection 1 but must be refunded in full to any 
member contributing them who retires on or before the effective date of those sections of 
this Act that enact Title 5, section 17851-A, subsection 1, paragraph N and amend Title 5, 
section 17851-A, subsections 2, 3, 4 and 5 pursuant to section 15 of this Act.' 
Amend the bill by striking out all of sections 12 to 15 and inserting the following: 
'Sec. 12. Funding of benefit changes that are effective prospectively after 
the effective date of this Act and payment of the related normal cost increase 
in the current and following five years. With respect to an employee's service after 
September 1, 2008 in a position to which this Act applies, the increase in normal cost 
contributions resulting from the increased normal cost rate that is necessary to support the 
changed benefits as they are earned must be estimated by the Maine Public Employees 
Retirement System based on the total payroll for the positions to which this Act applies as 
of the pay date closest to August 1, 2008. The amount of the increased normal cost 
contributions must be paid from the funds transferred to the Corrections and Mental 
Health Workers Service Retirement Benefit Reserve under this Act. The Maine Public 
Employees Retirement System shall pay these increased contributions not later than 
September 1st of each year through September 1, 2013, each as a single lump sum, 
reducing the funds held in the Corrections and Mental Health Workers Service 
Retirement Benefit Reserve by the amount required to fully pay the estimated amount of 
the increased contributions for the remainder of each respective year and transferring that 
amount on the books of the system to the general assets ofthe state employee and teacher 
retirement program. After the last payroll of each of the current and following 5 years is 
paid, the Maine Public Employees Retirement System shall reconcile, for each year, the 
estimated with the required actual amount of the increased contributions, adjusting the 
reduction of the Corrections and Mental Health Workers Service Retirement Benefit 
Reserve accordingly. Effective July 1, 2014, the normal cost rate for the positions to 
which this Part applies must be adjusted to the normal cost rate determined by the Maine 
Public Employees Retirement System and its actuary to thereafter support the changed 
benefits as they are earned, to be paid to the Maine Public Employees Retirement System 
in the normal course of payment of retirement contributions. 
Sec. 13. 
Funding of the liability for the increased values of service 
rendered before September 1, 2014. A retirement service credit related to the 
increased value of service rendered before September 1, 2014 in positions to which this 
Act applies is not due to and may not be given to any employee until the full actuarial 
cost of the total liability for the increased value of all of that service for all employees to 
whom this Act applies has been paid. The amount required to pay the full actuarial cost 
must be accumulated by the Maine Public Employees Retirement System through funds 
provided to it for that purpose. Funds so provided must be held by the Maine Pubic 
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COMMITTEE AMENDMENT" £> " to S.P. 424, L.D. 1223 
Employees Retirement System in the Corrections and Mental Health Workers Service 
Retirement Benefit Reserve until the full actuarial cost is accumulated. Funds to be held 
in the Corrections and Mental Health Workers Service Retirement Benefit Reserve to pay 
this cost consist of the funds transferred to the Corrections and Mental Health Workers 
Service Retirement Benefit Reserve under this Act, funds provided thereafter for the 
same purpose and any investment earnings on the funds, reduced by amounts required to 
pay the increased normal cost contributions in the current and following 5 years as 
provided in section 12 of this Act and by any investment losses. Funds in the Corrections 
and Mental Health Workers Service Retirement Benefit Reserve must be invested by the 
Maine Public Employees Retirement System with the general assets of the state employee 
and teacher retirement plan and those funds' share of investment earnings and losses must 
be attributed to the Corrections and Mental Health Workers Service Retirement Benefit 
Reserve. 
The full actuarial cost of the liability for the increased value of service rendered 
before September 1, 2014 in positions to which this Act applies is the amount of the 
liability for the increased value, as calculated by the Maine Public Employees Retirement 
System's actuary, increased by the interest cost that arises because the full cost of the 
now-increased value of the service already rendered was not paid to the system at the 
time the service was rendered. Interest costs continue to accrue until the full actuarial cost 
of the increased value has been accumulated in the Corrections and Mental Health 
Workers Service Retirement Benefit Reserve and is thereafter transferred on the books of 
the Maine Public Employees Retirement System from the Corrections and Mental Health 
Workers Service Retirement Benefit Reserve to the general assets of the state employee 
and teacher retirement program. If an actuarially significant change in the amount of the 
liability for the increased value, as determined by the Maine Public Employees 
Retirement System and its actuary, occurs before the full actuarial cost has been 
accumulated, the full actuarial cost must be increased or decreased accordingly. 
Sec. 14. 
Credit for service rendered before September 1, 2014; 
contingency. 
A retirement service credit related to the increased value of service 
rendered before September I, 2014 in positions to which this Act applies is not due to and 
may not be given to any employee until the Executive Director of the Maine Public 
Employees Retirement System certifies to the Governor, the Commissioner of 
Corrections and the Commissioner of Health and Human Services that the amount of the 
full actuarial cost has been accumulated in the Corrections and Mental Health Workers 
Service Retirement Benefit Reserve and has been transferred on the books of the Maine 
Pubiic Employees Retirement System to the genera! assets of the state employee and 
teacher retirement program, thereby funding the full actuarial costs of the liability for the 
increased value of that service. 
Sec. 15. Contingent effective date; construction. Those sections of this Act 
that amend the Maine Revised Statutes, Title 5, section 17851-A, subsection 1, 
paragraphs K, Land M and enact Title 5, section 17851-A, subsection 1, paragraph Nand 
amend Title 5, section 17851-A, subsections 2, 3, 4 and 5 do not take effect until the 
contingency set out in section 14 of this Act is satisfied by the required certification. The 
full actuarial costs arising from the implementation of those sections must be adjusted 
upward, if necessary, based upon actuarial projections of the Maine Public Employees 
Retirement System. Those sections of this Act that enact Title 5, section 17851-A, 
COMMITTEE AMENDMENT 
flt,fl:tf:r 
COMMITTEE AMENDMENT" b " to S.P. 424, L.D. 1223 
subsection 1, paragraph N and amend Title 5, section 17851-A, subsections 2, 3, 4 and 5 
may not be construed to create any contractual claim or right or any other claim for any 
state employee.' 
SUMMARY 
This amendment provides that the Corrections and Mental Health Workers Service 
Retirement Benefit Reserve is held by the Maine Public Employees Retirement System 
rather than in the General Fund. The amendment also provides for 1 % contributions to 
the reserve by affected classifications of corrections officers and mental health workers. 
This amendment makes certain technical corrections and clarifications to the bill and 
adjusts forward by one year all time line dates in the bill. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 1211 1107 
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LD 1223 
LR 912(04) 
An Act To Provide a Uniform Retirement Plan for Corrections Officers and Mental Health Workers 
l<'iscal Detail and Notes 
Fiscal Note for Bill as Amended by Committee Amendment".fJ " 
Committee: Labor 
Fiscal Note Required: Yes 
Fiscal Note 
Future biennium cost increase - General Fund 
Future biennium cost increase - Federal Expenditures Fund 
Future biennium cost increase - Other Special Revenue Funds 
Adding mental health workers to the 1998 Special Plan and providing that al1 service for corrections and mental health 
workers is to be considered as service earned in the 1998 Special Plan, regardless of when that service was earned will 
increase the normal cost component of the employer retirement rate resulting in increased employer contributions to 
the Maine State Retirement System and wil1 increase the unfunded liability of the Retirement System. 
Based on calculations performed by the System's actuary, the unfunded liability cost associated with the plan changes 
as of June 30, 2007 totals $31,040,512, of which $12,669,713 is attributable to Mental Health Workers and 
$18,370,799 is attributable to Corrections employees. The additional normal cost dol1ars for Mental Health Workers 
as a result of the increase in the rate from 5.75% to 6.50% is estimated to be $155,000 for fiscal year 2008-09. 
Because Correction employees already participate in the 1998 Special Plan, there is no increase in the normal cost for 
that group of employees. 
In order to reserve funds to meet the ful1 actuarial costs of the provisions of this bill, including the normal cost rates 
for the 6 years fol1owing the effective date of the legislation, the bill creates the Corrections and Mental Health 
Workers Service Retirement Benefit Reserve and proposes to divert funds from the unappropriated surplus of the 
General Fund at the end of each fiscal year beginning in fiscal year 2008-09 that would otherwise be transferred to the 
Retirement Al10wance Fund pursuant to 5 MRSA § 1536, sub-§ 1 (B). The bil1 also states that the plan changes 
proposed in this bill do not become effective until full funding is available as certified by the Maine State Retirement 
System. 
The cost of this legislation, including the loss of savings as a result of diverting funds from the Retirement Al10wance 
Fund that otherwise would be applied to the unfunded liability can not be determined at this time. Information 
provided by the Maine State Retirement System indicates that the transfer of$13.1 million from the unappropriated 
surplus at the end of fiscal year 2004-05 resulted in cumulative savings of approximately $31.5 miIl ion over the 21 
LR0912(04) - Fiscal Note - Page 1 of2 
year amortization schedule. 
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It is also unknown whether there will be sufficient funds available to transfer to the retirement benefit reserve to fully 
fund this provision by fiscal year 2013-14 or to fund the normal cost component on an annual basis. The General 
Fund has had year-end surpluses over the pa· "consecutive fiscal years which allowed for a total of $63.7 million to 
be transferred to the Retirement Allowance; 'ld, with $ 17.5 million being transferred at the end of fiscal year 2005-
and, as stated above, $13.1 million at the end of fiscal year 2004-05. Although fiscal year 2006-07 ended with a 
General Fund surplus of $19. I million, no funds were available for transfer to the Retirement Allowance Fund. 
Public Law 2007, Chapter I, Part L provided for the transfer of up to $82,000,000 from the unappropriated surplus of 
the General Fund to the Department of Health and Human Services, Medical Care - Payments to Providers account as 
the first priority after the transfers required pursuant to 5 MRS A § I 507 and § 151 I and before the transfers required 
pursuant to 5 MRSA, §I536. 
LR0912(04) - Fiscal Note - Page 2 of2