An Act To Protect Funding for Health Care for Retired Teachers by Establishing an Investment Trust Fund
Maine Legislature, Session 130, LD 1901
Committee: Labor and Housing
Sponsors: DODGE, COLLINGS, MILLETT, PEBWORTH, SALISBURY, SYLVESTER, TERRY, DAUGHTRY
Amends: 5 MRSA §286-B

Legislative Document
No. 1901
H.P. 1408
House of Representatives, January 5, 2022
An Act To Protect Funding for Health Care for Retired Teachers by 
Establishing an Investment Trust Fund
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203.
Reference to the Committee on Labor and Housing suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative DODGE of Belfast.
Cosponsored by Representatives: COLLINGS of Portland, McCREA of Fort Fairfield, 
MILLETT of Cape Elizabeth, PEBWORTH of Blue Hill, SALISBURY of Westbrook, 
SYLVESTER of Portland, TERRY of Gorham, Senator: DAUGHTRY of Cumberland.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  5 MRSA §286-B, sub-§1, ¶B, as enacted by PL 2007, c. 240, Pt. RRR, §1, 
is amended to read:
B.  "Investment trust fund funds" means the Retiree Health Insurance Post-employment 
Benefits Investment Trust Fund established under section 17432 and the Retired 
Teacher Health Insurance Post-employment Benefits Investment Trust Fund 
established under section 17442.
Sec. 2.  5 MRSA §286-B, sub-§3, as amended by PL 2011, c. 380, Pt. Y, §1, is 
further amended to read:
3.  Trustees.  The trustees of the irrevocable trust funds are as follows.
A.  The Treasurer of State and the State Controller shall serve as trustees of the state 
employee plan and the teacher plan.
B.  An independent, nongovernmental entity with a physical presence in the State 
selected by the Treasurer of State with the advice of the State Controller and municipal, 
school management and education associations pursuant to the process set forth in Title 
5, chapter 155 shall serve as the trustee of the teacher plan and the first responder plan.
Sec. 3.  5 MRSA §286-B, sub-§5, as amended by PL 2011, c. 380, Pt. Y, §1, is 
further amended to read:
5.  Investment of funds.  The trustees of the investment trust fund funds are 
responsible for the investment and reinvestment of the funds appropriated to the irrevocable 
trust funds and transferred to the investment trust fund funds in accordance with the Maine 
Uniform Trust Code and the Maine Uniform Prudent Investor Act under Title 18‑B, subject 
to the guidelines set for the investment trust fund funds in section sections 17435 and 
17445, respectively.
Sec. 4.  5 MRSA c. 421, sub-c. 4, art. 10 is enacted to read:
ARTICLE 10
RETIRED TEACHER HEALTH INSURANCE POST-EMPLOYMENT 
BENEFITS INVESTMENT TRUST FUND
§17441. Definitions
As used in this article, unless the context otherwise indicates, the following terms have 
the following meanings.
1.  Assets of the investment trust fund.  "Assets of the investment trust fund" means 
the funds appropriated or otherwise provided to fund the investment trust fund, together 
with the interest, earnings and returns on the funds.
2.  Commissioner.  "Commissioner" means the Commissioner of Administrative and 
Financial Services.
3.  Investment trust fund.  "Investment trust fund" means the Retired Teacher Health 
Insurance Post-employment Benefits Investment Trust Fund established in section 17442.
4.  Investment trust fund agreement.  "Investment trust fund agreement" means the 
trust agreement to be entered into by the State and the trustees of the investment trust fund.
5.  System.  "System" means the Maine Public Employees Retirement System.  
§17442. Establishment
1.  Investment trust fund established.  The Retired Teacher Health Insurance Post-
employment Benefits Investment Trust Fund is established as an irrevocable trust for the 
sole purpose of holding and investing funds appropriated or otherwise provided to the 
investment trust fund for the benefit of the Irrevocable Trust Fund for Other Post-
employment Benefits for the teacher plan established in section 286-B with respect to the 
State's liabilities for retiree health benefits. The purpose of accumulating assets in this 
investment trust fund is to provide funding of the State's unfunded liability obligations for 
health benefits for retired teachers. The Legislature has no authority or power to divert any 
of the assets of the investment trust fund to use for any other purpose.
2.  Date of establishment.  The date of establishment of the investment trust fund is 
January 1, 2023.
3.  Trustees.  The trustees of the investment trust fund are the members of the Board 
of Trustees of the Maine Public Employees Retirement System.
§17443. Statutory references
Notwithstanding that this article is placed in the Maine Revised Statutes in Part 20, 
chapter 421, subchapter 4, any reference to "Part," "in this Part," "under this Part" or similar 
wording in Part 20 is inapplicable to every provision in this article. This article stands apart 
from all other provisions of this Part except by explicit reference.
§17444. Administration of investment trust fund
1.  Administration.  The trustees of the investment trust fund may delegate to the 
executive director, chief investment officer or other staff of the system as appropriate the 
responsibility to carry out, as directed by the trustees of the investment trust fund, the 
administration of the investment trust fund and its investment and disbursement activities.
2.  Expenses.  Associated administrative costs and expenses attributable to the 
investment trust fund must be charged to the investment trust fund.
§17445. Duties of trustees of investment trust fund
The trustees of the investment trust fund have the following duties.
1.  Manage assets.  The trustees of the investment trust fund shall hold, invest, reinvest 
and manage assets appropriated to the investment trust fund and all other assets of the 
investment trust fund for the sole benefit of the Irrevocable Trust Fund for Other Post-
employment Benefits for the teacher plan established in section 286-B and may not 
encumber, invest, divest or disburse the funds for any other purpose. The trustees of the 
investment trust fund have full power to hold, purchase, sell, assign, transfer and dispose 
of any such assets and investments and will provide for all necessary services with respect 
to such assets.  
The primary goals of the investment trust fund are the preservation and growth of principal 
in accordance with long-term investment assumptions established from time to time by the 
Board of Trustees of the Maine Public Employees Retirement System for the defined 
benefits plans of the system, as considered appropriate by the trustees of the investment 
trust fund.
2.  Investment policy.  Except as provided in subsection 3, the trustees of the 
investment trust fund shall determine and revise as necessary an appropriate investment 
trust fund investment policy, including but not limited to provisions for asset allocation and 
investment strategy. This policy must take into account the following factors as established 
by the trustees of the Irrevocable Trust Fund for Other Post-employment Benefits for the 
teacher plan established in section 286-B, subsection 2 and as may be revised in the 
investment trust fund agreement from time to time:  
A. A long-term time horizon for the assets of the investment trust fund;
B. A funding plan; and
C. A projected disbursement schedule that does not begin before the year 2033.
3.  Transfer of funds before policy established.  Any funds transferred to the 
investment trust fund prior to the establishment of the investment policy in subsection 2 
must be held and transitionally invested in a prudent manner as determined by the trustees 
of the investment trust fund.
4.  Investment and management of assets.  The trustees of the investment trust fund 
shall invest and manage the assets of the investment trust fund in accordance with the 
requirements of subsections 1 and 2 and with the reasonable care, skill and expertise of a 
prudent investor.
5.  Investment expenses.  The trustees of the investment trust fund may incur 
reasonable investment expenses payable from the assets of the investment trust fund, 
including but not limited to services of investment managers, investment consultants, 
actuaries, investment counsel, banks and trust companies and other investment 
professionals or advisors as they consider necessary and prudent in determining investment 
policy, in investing funds and in liquidating assets.
6.  Disbursement of funds.  The trustees of the investment trust fund may disburse 
funds from the investment trust fund only to the Irrevocable Trust Fund for Other Post-
employment Benefits for the teacher plan as established in section 286‑B, subsection 2. 
The trustees of the Irrevocable Trust Fund for Other Post-employment Benefits for the 
teacher plan must present jointly a lawful payment order. The trustees of the investment 
trust fund have no responsibility to ensure that the stated use or actual use by the trustees 
of the Irrevocable Trust Fund for Other Post-employment Benefits for the teacher plan of 
such money is to fund retiree health benefits. The trustees of the investment trust fund's 
duties under the investment trust fund are discharged by disbursing money under the terms 
of this subsection.
7.  Report.  The trustees of the investment trust fund shall provide annually a report to 
the State, the trustees of the Irrevocable Trust Fund for Other Post-employment Benefits 
for the teacher plan established in section 286‑B, subsection 2, the joint standing committee 
of the Legislature having jurisdiction over the system and the joint standing committee of 
the Legislature having jurisdiction over appropriations and financial affairs. The trustees 
of the investment trust fund shall provide quarterly to the trustees of the Irrevocable Trust 
Fund for Other Post-employment Benefits for the teacher plan a report of the performance 
of the investment trust fund.
§17446. Liability and immunity of trustees of investment trust fund
1.  Limited liability of trustees of investment trust fund.  A trustee of the investment 
trust fund is not:  
A. Personally liable for any liability, loss or expense suffered by the investment trust 
fund, unless such a liability, loss or expense arises out of or results from the willful 
misconduct or intentional wrongdoing of that trustee of the investment trust fund;
B. Responsible for the adequacy of the investment trust fund to meet and discharge any 
obligation; or
C. Required to take action to enforce the payment of any contribution or appropriation 
to the investment trust fund.
2.  Immunity of trustees of investment trust fund.  The trustees of the investment 
trust fund are immune from suit on any tort claims seeking recovery of damages to the 
same extent as governmental entities under the Maine Tort Claims Act.
3.  Legal representation and defense of trustees of investment trust fund.  The 
Attorney General is legal counsel to the trustees of the investment trust fund and shall 
represent and defend the trustees of the investment trust fund, as a group and individually, 
in connection with any claim, suit or action at law arising out of the performance or 
nonperformance of any actions related to the investment trust fund to the same extent as 
provided for governmental entities under the Maine Tort Claims Act.
4.  Performance of essential governmental functions.  The exercise of the powers 
conferred by this article is held to be the performance of essential governmental functions.
§17447. Exemption from taxation
The money in the investment trust fund is exempt from any state, county or municipal 
tax in the State.
§17448. Reporting requirements under Governmental Accounting Standards Board
The system and trustees of the investment trust fund have no obligation to comply with 
reporting requirements related to the investment trust fund under Governmental 
Accounting Standards Board Statement Number 74, Financial Reporting for 
Postemployment Benefit Plans Other Than Pension Plans, or Governmental Accounting 
Standards Board Statement Number 75, Accounting and Financial Reporting for 
Postemployment Benefits Other Than Pensions. The State is obligated to comply with the 
reporting requirements under Governmental Accounting Standards Board Statement 
Number 74 and Governmental Accounting Standards Board Statement Number 75. The 
system shall account for the assets of the investment trust fund in its annual financial 
statements.
§17449. Information for administrative or judicial proceedings
If information regarding the investment trust fund is required from the system or the 
trustees of the investment trust fund for an administrative or judicial proceeding, the party 
seeking the information must file a written request for that information with the executive 
director of the Maine Public Employees Retirement System. The executive director or the 
executive director's designee shall make a certified response to that request within 30 days 
and the certified response is admissible as evidence in any administrative or judicial 
proceeding. A subpoena or other form of discovery directed at obtaining the information 
may not be issued nor may employees of the system be required to testify on the subjects 
covered by the certified response unless there is an express finding by an administrative 
agency or a court that there is a compelling necessity to permit further discovery or to 
require testimony. The executive director shall notify the trustees of the Irrevocable Trust 
Fund for Other Post-employment Benefits for the teacher plan established in section 286-B, 
subsection 2 immediately of any request for information, subpoena or other form of 
discovery.
SUMMARY
This bill establishes the Retired Teacher Health Insurance Post-employment Benefits 
Investment Trust Fund to protect funding for health care for retired teachers. It also 
designates the Treasurer of State and the State Controller as trustees of the Irrevocable 
Trust Fund for Other Post-employment Benefits for the teacher plan.