An Act To Reform the Maine Public Employees Retirement System
Maine Legislature, Session 126, LD 1514
Committee: Appropriations and Financial Affairs
Sponsors: WOODBURY

Legislative Document 
No. 1514 
S.P. 572 
In Senate, May 7, 2013 
An Act To Reform the Maine Public Employees Retirement System 
(EMERGENCY) 
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed. 
DAREK M. GRANT 
Secretary of the Senate 
Presented by Senator WOODBURY of Cumberland. 
Be it enacted by the People of the State of Maine as follows: 
CONCEPT DRAFT 
SUMMARY 
This bill is a concept draft pursuant to Joint Rule 208. 
This bill as emergency legislation proposes to amend the retirement provisions for 
state employees and teachers participating in the Maine Public Employees Retirement 
System in the following ways. 
1.  Cost-of-living adjustments.  The bill would increase the cost-of-living 
adjustment formula for all individuals receiving a pension benefit from the State.  
A.  The base on which the cost-of-living adjustment, or COLA, is awarded would be 
the member's benefit up to the maximum allowable social security benefit at the 
member's normal retirement age under the federal social security laws. For an 
individual retiring in 2013, the pension amount eligible for the COLA would increase 
from $20,000 to $30,156. 
B.  The COLA would be calculated using the index used by the United States Social 
Security Administration but would be capped at 4%. 
C.  At retirement, members would be given a payout option that would provide a full 
COLA, not subject to the 4% cap and not subject to the reduced benefit base.  The 
full COLA payout option would be self-funded by requiring an actuarially equivalent 
reduction in the initial benefit payout amount. 
D.  The increased COLA formula for individuals already receiving a retirement 
pension from the State would be applied prospectively only, beginning on July 1, 
2013. 
2.  Deferred retirement.  The bill would increase the pension amount for individuals 
choosing to defer retirement until after the normal retirement age specified in the State 
Employee and Teacher Retirement Program.  The intent of this provision is to increase 
the flexibility of the program for employees choosing retirement at any age and to 
increase the financial benefits from continuing to work. 
A.  The normal retirement age would remain unchanged at 60, 62 or 65 years of age, 
depending on the year a member became vested in the program. 
B.  Members initiating payments before the normal retirement age would continue to 
receive a 1/2% reduction in the benefit amount for each month that the member 
retires early. 
C.  A member retiring after the normal retirement age would receive a 1/2% increase 
in the benefit amount for each month that the member defers retirement after the 
normal retirement age, up to 70 years of age.  The percentage increase would be in 
addition to the increase in service credit. 
3.  Service credit.  The baseline pension formula for retirement at the normal 
retirement age would provide a benefit amount of 2% of final average salary per year of 
service through June 30, 2013, plus 1.5% of final average salary per year of service after 
June 30, 2013. 
4.  Defined contribution plan.  A state employee or teacher would automatically be 
enrolled in an opt-out defined contribution plan with a default employee contribution rate 
of 4% of salary.  The State or the participating local school district would match 25% of 
the employee's or teacher's contribution, up to a maximum of 2% of the employee's or 
teacher's salary.