An Act To Amend the Laws Pertaining to the Maine Public Employees Retirement System
Maine Legislature, Session 128, LD 0409
Committee: Appropriations and Financial Affairs
Sponsors: HAMPER
Amends: 3 MRSA §701, 3 MRSA §734, 3 MRSA §853, 4 MRSA §1201, 4 MRSA §1234, 4 MRSA §1353, 5 MRSA §17001, 5 MRSA §17053, 5 MRSA §17102, 5 MRSA §17103, 5 MRSA §17106, 5 MRSA §17106-A, 5 MRSA §17152, 5 MRSA §17760, 5 MRSA §17902, 5 MRSA §17903, 5 MRSA §17910, 5 MRSA §17925, 5 MRSA §17926, 5 MRSA §17928, 5 MRSA §17932, 5 MRSA §18053-A, 5 MRSA §18060, 5 MRSA §18502, 5 MRSA §18503, 5 MRSA §18525, 5 MRSA §18526, 5 MRSA §18528, 5 MRSA §18532, 5 MRSA §18653-A, 5 MRSA §18660

Legislative Document
No. 409
S.P. 136
In Senate, February 7, 2017
An Act To Amend the Laws Pertaining to the Maine Public 
Employees Retirement System
Submitted by the Maine Public Employees Retirement System pursuant to Joint Rule 204.
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator HAMPER of Oxford.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  3 MRSA §701, sub-§11-A is enacted to read: 
11-A.  Medical provider.  "Medical provider" means a physician or clinical 
psychologist. 
Sec. 2.  3 MRSA §734, as amended by PL 2007, c. 491, §12, is further amended to 
read: 
§734.  Medical board 
A medical board of the other programs of the Maine Public Employees Retirement 
System established in Title 5, section 17106, subsection 1 is the medical board of the 
Legislative Retirement Program.  The medical board shall arrange for and pass upon all 
medical examinations required under this chapter with respect to disability retirements 
and shall report in writing to the executive director its conclusions and recommendations 
upon all the matters referred to it.  The board of trustees may designate other physicians 
medical providers to provide medical consultation on legislative disability cases. 
Sec. 3.  3 MRSA §853, as amended by PL 2007, c. 491, §27, is further amended to 
read: 
§853.  Disability retirement 
Any member who becomes disabled while in service may receive a disability 
retirement allowance on the same basis as provided for members of the State Employee 
and Teacher Retirement Program by Title 5, chapter 423, subchapter 5, article 3 3-A. 
Sec. 4.  4 MRSA §1201, sub-§12-A is enacted to read: 
12-A.  Medical provider.  "Medical provider" means a physician or clinical 
psychologist. 
Sec. 5.  4 MRSA §1234, as amended by PL 2007, c. 491, §38, is further amended 
to read: 
§1234.  Medical board 
A medical board of the other programs of the Maine Public Employees Retirement 
System established in section 17106, subsection 1 is the medical board of the Judicial 
Retirement Program.  The medical board shall arrange for and pass upon all medical 
examinations required under this chapter with respect to disability retirements and shall 
report in writing to the Supreme Judicial Court its conclusions and recommendations 
upon all the matters referred to it.  The board of trustees may designate other physicians 
medical providers to provide medical consultation on judicial disability cases. 
Sec. 6.  4 MRSA §1353, sub-§1, as amended by PL 1991, c. 887, §1 and PL 2007, 
c. 58, §3, is further amended to read: 
1.  Conditions.  Any member who becomes disabled while in service may receive a 
disability retirement allowance by order of at least 5 Justices of the Supreme Judicial 
Court or upon written application to the executive director, review and report of the 
application by the medical board and approval of that application by at least 5 of the 
Justices of the Supreme Judicial Court if that member is mentally or physically 
incapacitated to the extent that it is impossible for that member to perform the duties as a 
judge and the incapacity is expected to be permanent, as shown by medical examination 
or tests.  A qualified physician medical provider mutually agreed upon by the executive 
director and member shall conduct the examinations or tests at an agreed upon place, and 
the costs must be paid by the Maine Public Employees Retirement System. 
Sec. 7.  4 MRSA §1353, sub-§4, ¶C, as amended by PL 2007, c. 491, §50, is 
further amended to read: 
C.    The executive director may require the beneficiary to undergo annual medical 
examinations or tests for the purpose of determining whether the beneficiary is 
incapacitated.  These examinations or tests must be conducted by a qualified 
physician medical provider, mutually agreed upon by the executive director and 
beneficiary, at a place also mutually agreed upon, and the costs of the examination or 
tests must be paid by the Maine Public Employees Retirement System. If the 
beneficiary refuses to submit to an examination or tests, the beneficiary's disability 
allowance ceases until the beneficiary agrees to the examination or tests.  If the 
beneficiary's refusal continues for one year, all rights to any further benefits under 
this section terminate. 
Sec. 8.  5 MRSA §17001, sub-§19-A is enacted to read: 
19-A.  Medical provider.  "Medical provider" means a physician or clinical 
psychologist. 
Sec. 9.  5 MRSA §17053, as enacted by PL 1985, c. 801, §§5 and 7, is amended to 
read: 
§17053.  Exemption from taxation 
The money in the various funds created by this Part and any property owned by the 
retirement system are exempt from any state, county or municipal tax in the State. 
Sec. 10.  5 MRSA §17102, sub-§1, ¶E, as amended by PL 2007, c. 491, §75, is 
further amended to read: 
E.  A person who is a member or retired member of the Participating Local District 
Retirement Program of the retirement system through a participating local district and 
who is appointed by the governing body of the Maine Municipal Association. 
Sec. 11.  5 MRSA §17103, sub-§11, ¶B, as amended by PL 1997, c. 651, §3, is 
further amended to read: 
B.  Any proposed legislation amending the retirement system law that the board 
recommends to improve the retirement system.  The joint standing committee of the 
Legislature having jurisdiction over public employee retirement matters may submit 
legislation required to implement recommendations made pursuant to this paragraph; 
Sec. 12.  5 MRSA §17103, sub-§13, as enacted by PL 1993, c. 410, Pt. L, §22 
and amended by PL 2007, c. 58, §3, is repealed and the following enacted in its place: 
13.  Budget.  By June 15th, annually, the board shall adopt an operating budget for 
the subsequent fiscal year. 
Sec. 13.  5 MRSA §17106, sub-§1, as amended by PL 2009, c. 322, §6, is further 
amended to read: 
1.  Establishment.  The board shall designate a medical board to be composed of at 
least 3 physicians medical providers not eligible to participate in any of the retirement 
programs of the retirement system.  The board shall make a good faith effort to appoint 
physicians medical providers to the medical board who are from those fields of medicine 
within concerning which the Maine Public Employees Retirement System receives the 
greatest number of applications for disability retirement benefits. 
Sec. 14.  5 MRSA §17106, sub-§2, as amended by PL 1995, c. 643, §4, is further 
amended to read: 
2.  Other medical providers.  If determined advisable by the board, the board may 
designate other physicians medical providers to provide medical consultation on 
disability cases. 
Sec. 15.  5 MRSA §17106, sub-§3, as amended by PL 2009, c. 322, §6, is further 
amended to read: 
3.  Powers and duties.  The medical board is advisory only to the retirement system.  
The medical board or other physicians medical providers designated by the board shall 
review the file of an applicant for disability retirement and: 
A.  Recommend an additional medical review in those instances where there are 
conflicting medical opinions; 
B.  Recommend additional medical tests to be performed on an applicant to obtain 
objective evidence of a permanent disability; 
C.  Assist the executive director in determining if a disability review of a recipient of 
a disability allowance is warranted; 
D.  Provide a written report of its analysis of how the applicant’s medical records do 
or do not demonstrate the existence of physical or mental functional limitations 
entitling an applicant to benefits under chapter 423, subchapter 5, articles 3 and 3-A, 
or chapter 425, subchapter 5, articles 3 or 3-A; and 
E.  Advise the retirement system whether there are medical indications that a person 
who is the recipient of a disability retirement benefit under chapter 423, subchapter 5, 
article 3-A or chapter 425, subchapter 5, article 3-A should not engage in a 
rehabilitation program or whether a recipient is too severely disabled to benefit from 
rehabilitation in accordance with the purposes of chapter 423, subchapter 5, article 
3-A or chapter 425, subchapter 5, article 3-A. 
Sec. 16.  5 MRSA §17106-A, sub-§5, as enacted by PL 2009, c. 322, §7, is 
amended to read: 
5.  Investigation.  The joint standing committee of the Legislature having jurisdiction 
over labor public employee retirement matters shall monitor the compliance of the 
retirement system and all involved parties with regard to the use of hearing officers and 
the independence of hearing officers in the decision-making process.   The joint standing 
committee of the Legislature having jurisdiction over labor public employee retirement 
matters may request the Attorney General to conduct an investigation if a complaint is 
made by a hearing officer or any participating party regarding the independence of the 
hearing process. 
Sec. 17.  5 MRSA §17106-A, sub-§6, as enacted by PL 2009, c. 322, §7, is 
amended to read: 
6.  Engagement and termination.  The board shall engage only qualified hearing 
officers, who must be monitored by the board.  A hearing officer may be terminated for 
misconduct.  Retaliatory action of any kind, including reprimand or termination, may not 
be taken against a hearing officer on the basis of that hearing officer's having issued 
decisions contrary to the decision of the executive director.  In the event of termination, 
the retirement system shall set forth in writing the basis for the termination, the propriety 
of which may then be considered by the joint standing committee of the Legislature 
having jurisdiction over labor public employee retirement matters pursuant to subsection 
5. 
Sec. 18.  5 MRSA §17152, first ¶, as amended by PL 2013, c. 602, Pt. A, §1, is 
further amended to read: 
The board may combine the assets of the State Employee and Teacher Retirement 
Program with the assets of other retirement programs of the retirement system for 
investment purposes.  The assets of the State Employee and Teacher Retirement Program 
may not be combined with the assets of another retirement program for benefit purposes 
or for administrative expenses.  All of the assets of the retirement system must be credited 
according to the purpose for which they are held among the several funds created by this 
section, namely: 
Sec. 19.  5 MRSA §17760, sub-§6, ¶D is enacted to read: 
D.  If funds are appropriated under paragraph B to subsidize the purchase of service 
credit for specific members, and those members either decline to purchase service 
credit or are able to purchase the service credit without subsidy, the unused funds 
must be applied in accordance with paragraph C. 
Sec. 20.  5 MRSA §17902, sub-§1, ¶A, as enacted by PL 1995, c. 643, §5, is 
amended to read: 
A.  The executive director shall obtain medical consultation on each applicant for 
disability retirement benefits in accordance with related rules established by the 
board, which must include provisions indicating when a case must be reviewed by a 
medical board and when alternative means of medical consultation are acceptable.  
Rules adopted pursuant to this paragraph are routine technical rules as defined in 
chapter 375, subchapter II-A 2-A.  Whether provided by the medical board or by an 
alternative means, medical consultation obtained by the executive director must be 
objective and be provided by a physician medical provider or physicians medical 
providers qualified to review the case by specialty or experience and to whom the 
applicant is not known. 
Sec. 21.  5 MRSA §17903, sub-§1, as enacted by PL 1985, c. 801, §§5 and 7, is 
amended to read: 
1.  Agreed upon medical provider.  The examination or tests shall must be 
conducted by a qualified physician medical provider mutually agreed upon by the 
executive director and member claiming to be disabled. 
Sec. 22.  5 MRSA §17910, sub-§2, as enacted by PL 1985, c. 801, §§5 and 7 and 
amended by PL 2007, c. 58, §3, is further amended to read: 
2.  Dispute over mental or physical capacity.  In the event there is a dispute 
between the beneficiary and the former employer over the beneficiary's mental or 
physical capacity to perform a specific job, at the option of the beneficiary that dispute 
shall must be resolved by the majority decision of 3 physicians medical providers, one 
appointed and reimbursed by the beneficiary, one appointed and reimbursed by the 
employer and one appointed by the executive director and reimbursed by the Maine 
Public Employees Retirement System. 
Sec. 23.  5 MRSA §17925, sub-§1, ¶A, as amended by PL 2015, c. 392, §1, is 
further amended to read: 
A.  The executive director shall obtain medical consultation on each applicant for 
disability in accordance with related rules established by the board, which must 
include provisions indicating when a case must be reviewed by a medical board and 
when alternative means of medical consultation are acceptable.  Rules adopted 
pursuant to this paragraph are routine technical rules as defined in chapter 375, 
subchapter 2-A.  Whether provided by the medical board or by an alternative means, 
medical consultation obtained by the executive director must be objective and be 
provided by a physician medical provider or physicians medical providers qualified 
to review the case by specialty or experience and to whom the applicant is not 
known. 
Sec. 24.  5 MRSA §17926, sub-§1, as enacted by PL 1989, c. 409, §§8 and 12, is 
amended to read: 
1.  Agreed upon medical provider.  The examinations or tests shall must be 
conducted by a qualified physician and, when appropriate, a qualified psychologist 
medical provider mutually agreed upon by the executive director and the member 
claiming to be disabled. 
Sec. 25.  5 MRSA §17928, as amended by PL 1997, c. 384, §8, is further amended 
to read: 
§17928.  Computation of benefit 
Until July 1, 1996, when a member qualified under section 17924 retires, after 
approval for disability retirement by the executive director in accordance with section 
17925, the member is entitled to receive a disability retirement benefit equal to 59% of 
that member's average final compensation, calculated, for this section only, without 
regard to section 17001, subsection 13, paragraph E.  The 59% level must be reviewed for 
cost-neutral comparability as a part of the actuarial investigation provided under section 
17107, subsection 2, paragraph E, beginning with the investigation made January 1, 1997 
and every 6 years thereafter.  The review that takes place every 6 years must compare 
actual experience under the disability plans with actuarial assumptions regarding election 
and costs of benefits under the new options elected and identify possible options for 
compliance with the federal Older Workers Benefit Protection Act that protect benefits 
for employees without additional cost to the State and participating local districts. 
A member who by election remains covered, as to qualification for benefits, under 
section 17924 as written prior to its amendment by Public Law 1991, chapter 887, section 
7, qualifies for a disability retirement benefit on meeting the requirements of section 
17924, subsection 1, paragraphs C and D.  When a member so qualified retires after 
approval for disability retirement by the executive director in accordance with this 
Article, the member is entitled to receive a disability retirement benefit equal to 66 2/3% 
of the member's average final compensation, calculated, for this section only, without 
regard to section 17001, subsection 13, paragraph E. 
Sec. 26.  5 MRSA §17932, sub-§2, as enacted by PL 1989, c. 409, §§8 and 12, is 
amended to read: 
2.  Dispute over mental or physical capacity.  If there is a dispute between the 
person and the former employer over the person's mental or physical capacity to perform 
a specific job, at the option of the person that dispute shall must be resolved by a majority 
of 3 physicians medical providers, one appointed and reimbursed by the person, one 
appointed and reimbursed by the employer and one appointed and reimbursed by the 
retirement system.  If the 3 physicians medical providers resolve the dispute in favor of 
the person, the former employer shall must reimburse the physician medical provider 
appointed by the person. 
Sec. 27.  5 MRSA §18053-A is enacted to read: 
§18053-A.  Funds 
All assets in the group life insurance program may be combined for investment 
purposes.  The assets attributable to employers of state employees, teachers, Legislators 
and judges who are participants in the group life insurance program may not be combined 
with the assets attributable to other group life insurance participants for benefit purposes. 
Sec. 28.  5 MRSA §18060, as enacted by PL 1985, c. 801, §§5 and 7, is repealed. 
Sec. 29.  5 MRSA §18502, sub-§1, ¶A, as enacted by PL 1995, c. 643, §17, is 
amended to read: 
A.  The executive director shall obtain medical consultation on each applicant for 
disability retirement benefits in accordance with related rules established by the 
board, which must include provisions indicating when a case must be reviewed by a 
medical board and when alternative means of medical consultation are acceptable.  
Rules adopted pursuant to this paragraph are routine technical rules as defined in 
chapter 375, subchapter II-A 2-A.  Whether provided by the medical board or by an 
alternative means, medical consultation obtained by the executive director must be 
objective and be provided by a physician medical provider or physicians medical 
providers qualified to review the case by specialty or experience and to whom the 
applicant is not known. 
Sec. 30.  5 MRSA §18503, sub-§1, as enacted by PL 1985, c. 801, §§5 and 7, is 
amended to read: 
1.  Agreed upon medical provider.  The examination or tests shall must be 
conducted by a qualified physician medical provider mutually agreed upon by the 
executive director and member claiming to be disabled. 
Sec. 31.  5 MRSA §18525, sub-§1, ¶A, as amended by PL 1995, c. 643, §21, is 
further amended to read: 
A.  The executive director shall obtain medical consultation on each applicant for 
disability in accordance with related rules established by the board, which must 
include provisions indicating when a case must be reviewed by a medical board and 
when alternative means of medical consultation are acceptable.  Rules adopted 
pursuant to this paragraph are routine technical rules as defined in chapter 375, 
subchapter II-A 2-A.  Whether provided by the medical board or by an alternative 
means, medical consultation obtained by the executive director must be objective and 
be provided by a physician medical provider or physicians medical providers 
qualified to review the case by specialty or experience and to whom the applicant is 
not known. 
Sec. 32.  5 MRSA §18526, sub-§1, as enacted by PL 1989, c. 409, §§11 and 12, is 
amended to read: 
1.  Agreed upon medical provider.  The examinations or tests shall must be 
conducted by a qualified physician and, when appropriate, a qualified psychologist 
medical provider mutually agreed upon by the executive director and the member 
claiming to be disabled. 
Sec. 33.  5 MRSA §18528, as amended by PL 1997, c. 384, §14, is further 
amended to read: 
§18528.  Computation of benefit 
When a member qualified under section 18524 retires, after approval for disability 
retirement by the executive director in accordance with section 18525, the member is 
entitled to receive a disability retirement benefit equal to 59% of that member's average 
final compensation, calculated, for this section only, without regard to section 17001, 
subsection 13, paragraph E.  The 59% level must be reviewed for cost-neutral 
comparability as a part of the actuarial investigation provided under section 17107, 
subsection 2, paragraph E, beginning with the investigation made January 1, 1997 and 
every 6 years thereafter.  The review that takes place every 6 years must compare actual 
experience under the disability plans with actuarial assumptions regarding election and 
costs of benefits under the new options elected and identify possible options for 
compliance with the federal Older Workers Benefit Protection Act that protect benefits 
for employees without additional cost to the State and participating local districts. 
A member who by election remains covered, as to qualification for benefits, under 
section 18524 as written prior to its amendment by Public Law 1991, chapter 887, section 
15, qualifies for a disability retirement benefit on meeting the requirements of section 
18524, subsection 1, paragraphs C and D.  When a member so qualified retires after 
approval for disability retirement by the executive director in accordance with this 
Article, the member is entitled to receive a disability retirement benefit equal to 66 2/3% 
of the member's average final compensation, calculated, for this section only, without 
regard to section 17001, subsection 13, paragraph E. 
Sec. 34.  5 MRSA §18532, sub-§2, as enacted by PL 1989, c. 409, §§11 and 12, is 
amended to read: 
2.  Dispute over mental or physical capacity.  If there is a dispute between the 
person and the former employer over the person's mental or physical capacity to perform 
a specific job, at the option of the person that dispute shall must be resolved by a majority 
of 3 physicians medical providers, one appointed and reimbursed by the person, one 
appointed and reimbursed by the employer and one appointed and reimbursed by the 
retirement system.  If the 3 physicians medical providers resolve the dispute in favor of 
the person, the former employer shall must reimburse the physician medical provider 
appointed by the person. 
Sec. 35.  5 MRSA §18653-A is enacted to read: 
§18653-A.  Funds 
All assets in the group life insurance program may be combined for investment 
purposes.  The assets attributable to employers of participating local district participants 
in the group life insurance program may not be combined with the assets attributable to 
other group life insurance participants for benefit purposes. 
Sec. 36.  5 MRSA §18660, as enacted by PL 1985, c. 801, §§5 and 7, is repealed. 
Sec. 37.  PL 2015, c. 267, Pt. A, §63, under the caption “RETIREMENT 
SYSTEM, MAINE PUBLIC EMPLOYEES” in the first occurrence of 
“Retirement System - Subsidized Military Service Credit Z094” is amended by 
amending the initiative to read: 
Initiative:  Provides funds to allow for 2 members who the Maine Public Employees 
Retirement System determined were qualified to purchase military service credit at a 
subsidized rate pursuant to the Maine Revised Statutes, Title 5, section 17760 in 2004.  If 
the 2 members for whom funds are appropriated under this section either decline to 
purchase service credit or are able to purchase the service credit without subsidy, the 
unused funds must be applied in accordance with Title 5, section 17760, subsection 6, 
paragraph C. 
Sec. 38.  PL 2015, c. 267, Pt. A, §63, under the caption “RETIREMENT 
SYSTEM, MAINE PUBLIC EMPLOYEES” in the 2nd occurrence of 
“Retirement System - Subsidized Military Service Credit Z094” is amended by 
amending the initiative to read: 
Initiative:  Provides funds to allow for 3 members who the Maine Public Employees 
Retirement System determined were qualified to purchase military service credit at a 
subsidized rate pursuant to the Maine Revised Statutes, Title 5, section 17760 in 2005, 
2012 and 2013.  If the 3 members for whom funds are appropriated under this section 
either decline to purchase service credit or are able to purchase the service credit without 
subsidy, the unused funds must be applied in accordance with Title 5, section 17760, 
subsection 6, paragraph C. 
Sec. 39.  Applicability.  The provisions of sections 25 and 33 of this Act apply to 
benefits paid to disability retirement benefit recipients who are found eligible for those 
benefits after the effective date of this Act. 
SUMMARY 
This bill makes the following changes to the laws governing the Maine Public 
Employees Retirement System: 
1.  It replaces the term "physician" with "medical provider" and defines "medical 
provider" to include physicians and clinical psychologists, which permits clinical 
psychologists to be included in the composition of the medical board and for other 
medical consultations; 
2.  It clarifies that the board member who represents participating local districts may 
be either an active or retired member. 
3.  It clarifies the basis on which disability benefits for members of the Legislative 
Retirement Program are determined; 
4.  It clarifies that any property owned by the retirement system is tax exempt; 
5.  It gives the joint standing committee of the Legislature having jurisdiction over 
public employee retirement matters the authority to report out legislation as 
recommended by the board of trustees to improve the retirement system; 
6.  It replaces obsolete language regarding the retirement system budgeting process; 
7.  It corrects a reference to the legislative jurisdiction that pertains to matters relating 
to the retirement system; 
8.  It clarifies the treatment of retirement system assets; 
9.  It clarifies the disposition of funds appropriated to subsidize the purchase of 
military service credit for specific members who subsequently decline to purchase service 
credit or are able to purchase service credit without subsidy; 
10.  It changes the manner in which disability retirement benefits are calculated for 
less than full-time members; 
11.  It clarifies that assets of the group life insurance program may only be used for 
benefits for participants of employers for which the assets are attributable; and 
12.  It removes obsolete language.