An Act Regarding the Cost-of-living Adjustment for Certain State Retirees When the Cost of Living Declines
Maine Legislature, Session 126, LD 1395
Committee: Appropriations and Financial Affairs
Sponsors: JACKSON
Amends: 5 MRSA §17806, 5 MRSA §18407

Legislative Document 
No. 1395 
S.P. 499 
In Senate, April 10, 2013 
An Act Regarding the Cost-of-living Adjustment for Certain State 
Retirees When the Cost of Living Declines 
(AFTER DEADLINE) 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
205. 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
DAREK M. GRANT 
Secretary of the Senate 
Presented by Senator JACKSON of Aroostook. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §17806, sub-§1, ¶A-1, as amended by PL 2009, c. 473, §4, is 
further amended to read: 
A-1.  If there is a percentage decrease in the Consumer Price Index from July 1st to 
June 30th, the board shall set the percentage change at 0% for that September.  The 
adjustment for the following year must be set based on the actuarially compounded 
Consumer Price Index for both years in a cost-neutral manner.  If the Consumer Price 
Index in the subsequent year or years is not sufficient to allow for the adjustment to 
be cost-neutral for the 2 years, then the adjustment needed for cost-neutrality must 
continue to be applied to following years until such time as the cost-neutrality 
requirement is met.  An adjustment to achieve cost-neutrality under this paragraph 
may not include a downward adjustment for any year prior to the retiree’s retirement. 
Sec. 2.  5 MRSA §18407, sub-§4, ¶A-1, as amended by PL 2009, c. 473, §6, is 
further amended to read: 
A-1.  If there is a percentage decrease in the Consumer Price Index from July 1st to 
June 30th, the board shall set the percentage change at 0% for that September.  The 
adjustment for the following year must be set based on the actuarially compounded 
Consumer Price Index for both years in a cost-neutral manner.  If the Consumer Price 
Index in the subsequent year or years is not sufficient to allow for the adjustment to 
be cost-neutral for the 2 years, then the adjustment needed for cost-neutrality must 
continue to be applied to following years until such time as the cost-neutrality 
requirement is met.  An adjustment to achieve cost-neutrality under this paragraph 
may not include a downward adjustment for any year prior to the retiree’s retirement. 
Sec. 3.  Retroactivity; recalculation of benefits.  Those sections of this Act that 
amend the Maine Revised Statutes, Title 5, section 17806, subsection 1, paragraph A-1 
and section 18407, subsection 4, paragraph A-1 apply retroactively to June 17, 2009.  The 
Maine Public Employees Retirement System shall recalculate the pension for any retiree 
whose pension prior to the effective date of this Act is affected by this Act and make a 
payment to that retiree reflecting the difference between the pension received prior to the 
recalculation and the pension as recalculated under this Act. 
SUMMARY 
This bill provides that the public employee pension adjustment for changes in the 
Consumer Price Index does not include downward adjustments to achieve cost-neutrality 
attributable to a decrease in the Consumer Price Index for years prior to a retiree’s 
retirement.