An Act To Restore Equity to the Maine State Retirement System
Maine Legislature, Session 123, LD 1693
Committee Amendment CA_A-SA_G_S652 (Senate)

SENATE AMENDMENT "(},, 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 inserting after the substitute title the following: 
'PART A' 
Amend the amendment by inserting after section 15 the following: 
'PARTB 
Sec. B-1. 
Design of unified pension and benefit plan for all state 
employees and teachers who are first employed with the State after 
December 31, 2009. 
The Maine Public Employees Retirement System, the 
Commissioner of Administrative and Financial Services and the State Employee Health 
Commission, collectively referred to in this Part as "the task force," shall, within their 
existing resources, design in accordance with this Part a unified pension and benefit plan, 
referred to in this Part as "the plan," to apply to all state employees and teachers who are 
first hired after December 31, 2009 with no prior creditable service. 
1. Definitions. For purposes of this Part, the following terms have the following 
meanings. 
A. "Teacher" has the same meaning as in the Maine Revised Statutes, Title 5, section 
17001, subsection 42. 
B. "State employee" includes: 
(1) Employees as defined in Title 5, section 17001, subsection 40; 
(2) Judges entitled to retirement benefits under Title 4, chapter 27 or 29; 
(3) Members of the State Police; and 
(4) Legislators entitled to retirement benefits under Title 3, chapter 29. 
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2. Health plan. The task force shall design the health plan component of the plan in 
accordance with this subsection. 
SENATE AMENDMENT 
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SENATE AMENDMENT "G" to COMMITTEE AMENDMENT "A" to S.P. 600, L.D. 1693 
A. All active members of the plan and their dependents must be entitled to 
membership in the health plan. Assessments for coverage under the health plan must 
be imposed and budgeted in accordance with Title 5, section 286-A. The proportion 
of the assessment paid on behalf of members by their employers must be in 
accordance with the law existing on the effective date of this Part or in accordance 
with applicable collective bargaining agreements. 
B. Every active member of the plan and the spouse and dependents of each such 
member may continue coverage under the health plan in retirement if criteria for 
eligibility are met as prescribed in Title 5, section 285, subsection I-A. The task force 
may recommend changes in eligibility criteria. 
C. The health plan premium for any eligible retired member and any covered spouse 
or dependent of the member must be paid from the Bureau of Human Resources' 
State Employee Health Dedicated Revenue Account established in Title 5, section 
286-A. Each retired member must be entitled to 3% of the premium for each year of 
creditable service up to a maximum of 90% of the total premium. For a covered 
spouse or dependent, the subsidy is 1.5% of the premium for each year of the 
member's creditable service up to a maximum of 45% of the premium. 
D. The present actuarial cost of the future benefit subsidy for retired state employees 
and teachers must be paid one-half by the employee and one-half by the employer. 
Payments as calculated and assessed by the Commissioner of Administrative and 
Financial Services must be remitted on a regular and periodic basis to the State 
Employee Health Dedicated Revenue Account established in Title 5, section 286-A. 
3. Pension plan. The task force shall design the pension plan component of the plan 
in accordance with this subsection. 
A. Every member of the plan must contribute to both Social Security and Medicare, 
and the employer of each member must contribute the employer's share of Social 
Security and Medicare. 
B. Each active member of the plan must be entitled to a supplemental defined benefit 
pension calculated as a percentage of base compensation for each year of service. 
Base compensation equals the income received in the 5th highest calendar year of 
service. Benefits are vested after 6 years. 
C. Nonnal pension benefits commence after 30 years of service or at 62 years of age, 
whichever occurs first. 
D. A member who separates from service before normal retirement may: 
(1) Ifthe member has at least 6 years of service in the plan, leave the member's 
contributions and interest on account in the plan until the member retires at 62 
years of age, with those benefits adjusted each year by an amount equal to the 
Consumer Price Index, up to an annual maximum of3.5%; 
(2) Withdraw 1.5 times the amount of the member's own contributions, plus 6% 
interest, with the option to roll the amount withdrawn into a tax-sheltered 
account; 
(3) Purchase one or more irrevocable annuities or, with a spouse, joint life 
annuities, to commence at any future time and to end either at death or at the 
SENATE AMENDMENT 
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SENATE AMENDMENT" G .. to COMMITTEE AMENDMENT" A" to S.P. 600, L.D. 1693 
annuitant's normal retirement age for Social Security. The annuity values must 
equal 1.8 times the member's own contributions plus 6% interest. The Maine 
Public Employees Retirement System may serve as the annuity underwriter; or 
(4) Use a combination of the options under paragraphs Band C. 
E. The actuarial cost of retiree health insurance and supplemental defined pension 
benefits, when combined, may not exceed 6% of aggregate payroll for all members. 
The cost of the plan must be divided equally between the member and the member's 
employer. 
F. The actuarial cost of the retiree health benefit, expressed as a percentage of 
payroll, must be deducted from the 6% payroll charge, and the remainder must be 
allocated to the funding of a defined benefit system that will be expressed as a 
percentage of base payroll, rounded to the nearest tenth of a percent. 
Sec. B-2. Report. The task force shall submit a report on its design of the plan, 
together with any necessary implementing legislation, to the joint standing committee of 
the Legislature having jurisdiction over labor matters by December 10, 2008. After 
receipt and review of the report, the joint standing committee may report out a bill to the 
Amend the amendment by relettering or renumbering any nonconsecutive Part letter 
or section number to read consecutively. 
SUMMARY 
This amendment directs the Maine Public Employees Retirement System, the 
Commissioner of Administrative and Financial Services and the State Employee Health 
Commission, within their existing resources, to design a unified pension and benefit plan 
to apply to all state employees and teachers that are first hired after December 31,2009. 
Under this unified pension and benefit plan: 
1. In order to enhance portability of benefits and eliminate the issues associated with 
the government pension offset and the windfall elimination provision of the federal Social 
Security Act, every state employee and teacher subject to the plan will be covered under 
Social Security; 
2. All new employees will be members of a common health plan with benefits that 
are identical to those paid for in accordance with current law and collective bargaining 
contracts; 
3. In addition to Medicare and Social Security, each member will be entitled to a 
supplemental defined pension and retiree health benefit; 
4. The present actuarial cost of retiree benefits under the plan will be limited to 6% of 
payroll to be divided equally between the employee and the employer; 
5. Continuing health coverage will be offered to retirees and their dependents; 
6. A retired member may receive a subsidy of up to 90% of the cost for the retiree's 
own insurance and up to 45% of the cost of a spouse or dependent. The level of subsidy 
will be graduated to reflect length of service; 
SENATE AMENDMENT 
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SENATE AMENDMENT "G" to COMMITTEE AMENDMENT "A" to S.P. 600, L.n. 1693 
7. The future cost of retiree health benefits will be paid into an existing dedicated 
revenue account by assessing the current payroll of active members a percentage that is 
divided equally between the member and the member's employer; 
8. Each member's supplemental defined pension will be calculated as a percentage of 
base year compensation times years of service. The percentage, rounded to the nearest 
tenth, will be calculated based on funding available after deducting the cost of the retiree 
health benefit from the 6% total benefit cost; and 
9. A vested member may retire after 30 years of service or at 62 years of age, 
whichever occurs first. A member who retires early may recover 1.5% of the member's 
own contribution plus 6% interest if benefits are withdrawn as cash. 
The amendment directs the Maine Public Employees Retirement System, the 
Commissioner of Administrative and Financial Services and the State Employee Health 
Commission to submit their report on the design of the unified pension and benefit plan, 
together with proposed implementing legislation, to the joint standing committee of the 
Legislature having jurisdiction over labor matters no later than December 10, 2008 and 
authorizes the committee to report out a bill to the First Regular Session of the 124th 
Legislature. 
FISCAL NOTE REQUIRED 
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SPONSOREDBY: __ -+ __ ~~ 
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______ __ 
(Senator MILLS, P.) -
COUNTY: Somerset 
SENATE AMENDMENT 
Revised: 04116/08 
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LD 1693 
LR 2016(10) 
An Act To Restore Equity to the Maine State Retirement System 
Fiscal Note for Senate Amendment" G" to Committee Amendment "A" 
Sponsor: Sen. Mills, P. of Somerset 
Fiscal Note Required: Yes 
Fiscal Note 
Fiscal Detail and Notes 
This amendment does not impact the General Fund cost of the bill. 
This amendment requires the Maine Public Employees Retirement System (MainePERS), the Department of 
Administrative and Financial Services and the State Employee Health Commission to, within existing resources, 
design a unified pension and benefit plan to be applied to all state employees and teachers who are first hired after 
December 31, 2009 with no prior creditable service. 
The ability ofthe MainePERS to absorb the additional cost of the actuarial services necessary to design the new 
pension plan without impacting other actuarial analyses can not be determined at this time. 
Additional costs to the State Health Benefits Program and the Department of Administrative and Financial Services 
associated with working with the Maine Public Employees Retirement Plan to design a unified pension and benefit 
can be absorbed within existing budgeted resources. 
LR2016(10) - Fiscal Note - Page 1 of 1