An Act Regarding the State Retirement System
Maine Legislature, Session 128, LD 0929
Committee: Appropriations and Financial Affairs
Sponsors: DAUGHTRY
Amends: 5 MRSA §17001

Legislative Document
No. 929
H.P. 657
House of Representatives, March 9, 2017
An Act Regarding the State Retirement System
Reference to the Committee on Appropriations and Financial Affairs suggested and ordered 
printed.
ROBERT B. HUNT
Clerk
Presented by Representative DAUGHTRY of Brunswick.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  5 MRSA §17001, sub-§13, ¶C, as repealed and replaced by PL 1999, c. 
489, §2, is amended to read: 
C.  The following provisions govern limitations on earnable compensation. 
(1)  Notwithstanding the other provisions of this subsection, for the purposes of 
determining average final compensation, "earnable compensation" does not 
include any increase that exceeds the prior year's earnable compensation by more 
than 5% or that results in a total increase of more than 10% during the 3-year 
period used in the calculation of average final compensation, unless the cost of 
the additional actuarial liability arising from the excess increase is paid by the 
employer as provided in section 17154.  Any payment made under paragraph B, 
subparagraph (1) must be included in determining the amount of increase in the 
year in which the payment is made.  This subparagraph does not apply to excess 
increases resulting from compensation paid prior to July 1, 1993, from 
compensation paid in accordance with an individual employment contract 
executed prior to July 1, 1993 or a collective bargaining agreement executed or 
ratified in its final form by final vote of one party to the agreement prior to July 
1, 1993 for the initial term of that contract or agreement or from other action by 
the governing body of a school administrative unit in effect on July 1, 1993.  This 
subparagraph does not apply to increases in compensation of state employees 
during fiscal year 1993-94 and fiscal year 1994-95.  In all circumstances in which 
this subparagraph does not apply to earnable compensation of state employees 
and teachers, the provisions of this subparagraph that were in effect prior to June 
30, 1993 apply.  This subparagraph does not apply to earnable compensation of 
employees of participating local districts. 
(2)  Effective October 1, 1999, the 5% limitation and the 10% limitation on 
increases in earnable compensation set out in subparagraph (1) may not be 
changed to a lower percentage for members who, on October 1, 1999 or 
thereafter, meet the creditable service requirement for eligibility to receive a 
service retirement benefit, at the applicable age if so required, under section 
17851 or section 17851-A, subsection 2. 
(3)  If, during any year, an employee receives payment for compensation earned 
in a prior year or years, earnable compensation must be calculated according to 
this subparagraph. The portion of the employee's compensation that is 
retrospective payment for compensation earned in a prior year or years must be 
deducted from earnable compensation for the year in which it is paid and must be 
added to earnable compensation for the prior year or years in which that 
compensation was earned. 
SUMMARY 
This bill amends the definition of "earnable compensation" for the purposes of the 
state retirement system.  The bill provides that if, during any year, an employee receives 
retrospective payment for compensation earned in a prior year or years, the portion of the 
employee's compensation that is retrospective payment for compensation earned in a 
prior year or years must be deducted from earnable compensation for the year in which it 
is paid and must be added to earnable compensation for the prior year or years in which 
that compensation was earned.