An Act To Create More Transparency in the Setting of Normal Teacher Retirement Costs
Maine Legislature, Session 128, LD 1045
Committee: Appropriations and Financial Affairs
Sponsors: KATZ, KORNFIELD, LANGLEY, MAKER, FARNSWORTH, HUBBELL, STEARNS
Amends: 5 MRSA §17154

Legislative Document
No. 1045
S.P. 347
In Senate, March 14, 2017
An Act To Create More Transparency in the Setting of Normal 
Teacher Retirement Costs
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator KATZ of Kennebec.
Cosponsored by Representative KORNFIELD of Bangor and
Senators: LANGLEY of Hancock, MAKER of Washington, Representatives: FARNSWORTH 
of Portland, HUBBELL of Bar Harbor, STEARNS of Guilford.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §17154, sub-§6, as amended by PL 2013, c. 368, Pt. C, §1, is 
further amended to read: 
6.  Payment of employer charges for teachers.  For teachers, percentage rates to be 
predetermined by the actuary and approved by the board must be based on the actuarial 
report required by subsection 12 and must be applied to the total earnable compensation 
of members covering the most recent school year preceding the preparation of the 
biennial budget. 
A.  The resulting amount must be appropriated and credited to the appropriate funds. 
B.  Notwithstanding this section, the employer retirement costs and administrative 
operating expenses related to the retirement programs applicable to those teachers 
whose funding is provided from federal grants or through federal reimbursement 
must be paid by local school systems from those federal funds. 
C.  Notwithstanding this section, the employer retirement costs and administrative 
operating expenses related to the retirement program applicable to those teachers who 
are permitted to continue to accrue service credit while on a one-year leave of 
absence and participating in the education of prospective teachers by teaching and 
supervising students enrolled in college-level teacher preparation programs in this 
State must be paid from funds provided by the college employing the teacher during 
that year. 
D.  Notwithstanding this section, the employer retirement costs and administrative 
operating expenses related to the retirement program applicable to a teacher who is 
permitted to continue to accrue service credit while on a leave of absence and serving 
as President of the Maine Education Association must be paid from funds provided 
by the Maine Teachers Association.  For purposes of this paragraph, in computing the 
employer cost, "earnable compensation" means the amount that the teacher would 
have earned if the teacher had remained in a teaching position. 
E.  Notwithstanding this section, the employer retirement costs and administrative 
operating expenses related to the retirement program applicable to those teachers 
whose funding is provided directly or through reimbursement from private or public 
grants must be paid by local school systems from those funds.  "Public grants" does 
not include state or local funds provided to school administrative units under Title 
20-A, chapters 315 and 606-B. 
F.  Notwithstanding this section, effective September 1, 1993, the employer 
retirement costs and administrative operating expenses related to the retirement 
program, less the unfunded liability, that are applicable to a teacher who is permitted 
to continue to accrue service credit while on released time and serving as president of 
a recognized or certified collective bargaining agent representing teachers must be 
paid from funds provided by the collective bargaining agent or school administrative 
unit.  For purposes of this paragraph, in computing the employer cost, "earnable 
compensation" means the amount that the teacher would have earned if the teacher 
had remained in a teaching position. 
G.  Notwithstanding this section, beginning in fiscal year 2013-14, the employer 
retirement costs that are applicable to the normal cost of retirement for a teacher must 
be included in the total allocation in accordance with Title 20-A, chapter 606-B for 
the school administrative unit that employs the teacher. 
H.  Notwithstanding this section, beginning in fiscal year 2013-14, the employer 
retirement costs and administrative operating expenses related to the retirement 
programs applicable to those teachers employed by school administrative units, as 
defined in Title 20-A, section 1, subsection 26, whose funding is provided from local 
and state funds must be paid by local school administrative units. 
I.  Notwithstanding this section, beginning in fiscal year 2013-14, the employer 
retirement costs and administrative operating expenses related to the retirement 
programs applicable to those teachers employed by private schools, as defined in 
Title 20-A, section 1, subsection 22, must be paid by the private school. 
Sec. 2.  5 MRSA §17154, sub-§12 is enacted to read: 
12.  Actuarial report; normal teacher retirement costs.  By May 31, 2018, and 
biennially thereafter, the board shall prepare an actuarial report on the normal costs of 
teacher retirement.  The report must include actuarial estimates of normal costs of teacher 
retirement for each of the next 10 state fiscal years and reasons for projected increases or 
decreases in those costs.  The board shall present the report to a joint meeting of the joint 
standing committee of the Legislature having jurisdiction over education matters and the 
joint standing committee of the Legislature having jurisdiction over appropriations and 
financial affairs matters. 
Sec. 3.  Legislative review of normal teacher retirement costs.  The Joint 
Standing Committee on Appropriations and Financial Affairs shall conduct a review of 
the historical and projected future actuarial value of normal teacher retirement costs.  The 
Legislative Council, through the Office of Fiscal and Program Review, shall provide 
staffing services to the committee, including, but not limited to, conducting the analysis 
required in subsection 3.  No later than December 6, 2017, the committee shall report the 
results of its review to the Second Regular Session of the 128th Legislature.  The review 
must include, but is not limited to: 
1. The history of increases in normal teacher retirement costs before and after these 
costs were shifted from the State to local school administrative units beginning in state 
fiscal year 2013-14, pursuant to the Maine Revised Statutes, Title 5, section 17154, 
subsection 6, paragraph G; 
2. The reasons for changes in the actual or projected value of normal teacher 
retirement costs in state fiscal years 2014-15, 2015-16, 2016-17 and 2017-18; and 
3. An analysis of how adding normal teacher retirement costs to the total allocation, 
in accordance with the Maine Revised Statutes, Title 20-A, chapter 606-B, has affected 
total education costs, including any effects on general purpose aid. 
SUMMARY 
This bill requires the Board of Trustees of the Maine Public Employees Retirement 
System to prepare and present an actuarial report on normal teacher retirement costs to a 
joint meeting of the joint standing committee of the Legislature having jurisdiction over 
education matters and the joint standing committee of the Legislature having jurisdiction 
over appropriations and financial affairs matters by May 31st of even-numbered years.  It 
also requires the board to rely on this biennial actuarial report in its determination of the 
percentage of total teacher compensation required to fund normal teacher retirement 
costs. 
This bill also requires the Joint Standing Committee on Appropriations and Financial 
Affairs to conduct a review of the historical and projected future actuarial value of normal 
teacher retirement costs.  It requires the committee to report the results of its review to the