Resolve, To Refonu Public Retirement Benefits and Eliminate Social Security Offsets
Maine Legislature, Session 124, LD 1431
Committee Amendment CA_A_S230 (Senate)

COMMITTEE AMENDMENT "A "to S.P. 515, L.D. 1431, "Resolve, To Refonu 
Public Retirement Benefits and Eliminate Social Security Offsets" 
Amend the resolve by striking out everything after the title and before the summary 
and inserting the following: 
'Sec. 1. Design of unified pension and benefit plan for all state employees 
and teachers who are first employed with the State after December 31,2010. 
Resolved: That the task force established in subsection 2 shall design a unified pension 
and benefit plan, referred to in this resolve as "the plan," to apply to all state employees 
and teachers who are first hired after December 31, 2010 with no prior creditable service. 
The task force must be staffed within existing resources of the Maine Public Employees 
Retirement System and the State Employee Health Commission. 
1. Definitions. For purposes of this resolve, the following tenus have the following 
meanings. 
A. "Member" means teachers and state employees first hired after December 31, 
2010 with no prior creditable service. 
B. "State employee" means: 
(1) Employees as defined in the Maine Revised Statutes, 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. 
C. "Teacher" has the same meaning as in Title 5, section 17001, subsection 42. 
2. Task force established. A task force to reform public retirement benefits and 
eliminate social security offsets is established. The task force is composed of: 
A. The Chair of the Board of Trustees of the Maine Public Employees Retirement 
System, who serves as the task force chair; 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to S.P. 515, L.D. 1431 
B. The Commissioner of Administrative and Financial Services, or a designee of the 
commissioner; 
C. The Executive Director of the State Employee Health Commission; 
D. The State Controller; 
E. An employee member of the Board of Trustees of the Maine Public Employees 
Retirement System, appointed by the board; 
F. An employee member of the State Employee Health Commission, appointed by 
the State Employee Health Commission; 
G. A member appointed by the Maine Education Association; and 
H. A member appointed by the Maine School Management Association. 
3. Health plan. The task force shall design the health plan component of the plan in 
accordance with this subsection and may propose additional variations on the plan. 
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 and Title 20-A, 
section 13451. 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 
resolve 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 and Title 
20-A, section 13451. 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 100% 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 50% of the premium. 
D. The present actuarial cost of the future benefit subsidy for retired state employees 
and teachers must be paid 112 by the employee and 112 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 Bureau of Human 
Resources' State Employee Health Dedicated Revenue Account established in Title 5, 
section 286-A. 
4. Pension plan. The task force shall design the pension plan component of the plan 
in accordance with this subsection and may propose additional variations on the plan. 
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. 
COMMI 
EE AMENDMENT 
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COMMITIEE AMENDMENT" A" to S.P. 515, L.D. 1431 
Base compensation equals the income received in the 5th highest calendar year of 
service. Benefits are vested after 6 years. 
C. Normal 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) If the 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 
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 subparagraphs (2) and (3). 
5. Disability plan. The task force shall design a disability component of the plan 
whose structure and benefits are integrated with Social Security but are otherwise 
modeled on disability benefits currently available to employees hired on or before 
December 31, 2010. 
6. Cost of the plans. The combined actuarial cost of the retiree health insurance, the 
supplemental defined pension benefits and the disability provisions of the plan must be 
divided equally between the member and the member's employer and calculated as a 
percent of payroll for each member; and be it further 
Sec. 2. Report. Resolved: That the task force shall submit a report on its design 
of the plan, together with any necessary implementing legislation, to the Joint Standing 
Committee on Labor by March 1, 2010. After receipt and review of the report, the joint 
standing committee may report out a bill to the Second Regular Session of the 124th 
Legislature.' 
SUMMARY 
This amendment replaces the resolve and establishes a task force to design a unified 
pension and benefit plan to apply to all state employees and teachers who are first hired 
after December 31, 2010. 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; 
COMMITTEE AMENDMENT 
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COMMITIEE AMENDMENT "A "to S.P. SIS, L.D. 1431 
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 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 100% of the cost for the retiree's 
own health insurance and up to 50% of the cost of a spouse or dependent. The level of 
subsidy will be graduated to reflect length of service; 
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 multiplied by 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 times the member's 
own contribution plus 6% interest if benefits are withdrawn as cash, or 1.8 times the 
member's own contribution plus 6% interest if the benefits are withdrawn in the form of 
an annuity. 
The resolve directs the task force to submit a report on the design of the unified 
pension and benefit plan, together with proposed implementing legislation, to the Joint 
Standing Committee on Labor no later than March 1,2010 and authorizes the committee 
to report out a bill to the Second Regular Session of the 124th Legislature. 
FISCAL [l;OTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
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Approved: OS/24/09 ,t!vac:.. 
LD 1431 
LR 1542(02) 
Resolve, To Reform Public Retirement Benefits and Eliminate Social Security Offsets 
Fiscal Detail and Notes 
Fiscal Note for Bill as Amended by Committee Amendment '1{" 
Committee: Labor 
Fiscal Note Required: Yes 
Fiscal Note 
Minor cost increase - General Fund 
The additional costs to the Department of Administrative and Financial Services to participate in the task force to 
design a unified pension and benefit plan for new employees can be absorbed within the department's existing 
budgeted resources. 
Additional costs to the Maine Public Employees Retirement System associated with actuarial and legal services can be 
absorbed within existing budgeted resources. 
LR1542(02) - Fiscal Note - Page 1 of 1