Code of Maine Rules › 94 - INDEPENDENT AGENCIES › 411 - MAINE PUBLIC EMPLOYEES RETIREMENT SYSTEM (MAINEPERS) › Chapter 510 - REDUCTION OF DISABILITY RETIREMENT BENEFITS BECAUSE OF LUMP-SUM SETTLEMENTS OF BENEFITS PAYABLE UNDER THE WORKERS' COMPENSATION OR SIMILAR LAW OR THE UNITED STATES SOCIAL SECURITY ACT › Section 411-510-6 - DETERMINING THE AMOUNT OF THE "LUMP-SUM SETTLEMENT" IF THE SETTLEMENT PROVIDES FOR PAYMENT IN A MONTH OR MONTHS FOLLOWING THE DATE THAT THE SETTLEMENT AGREEMENT IS SIGNED BY THE APPROVING AUTHORITY

Current through 2024-29, July 17, 2024
1. If the
				lump-sum settlement is to be paid in a single payment but at a date subsequent
				to the effective date of the settlement agreement, then the single settlement
				payment must be converted into a single present value amount using the
				methodology of Section
				6.5. B. The resulting present value
				shall be used as the amount of the lump-sum settlement for purposes of this
				Chapter.
2. If the lump-sum
				settlement is to be paid not as a single settlement payment, but instead is to
				be paid in installments, then the installment amounts must be converted into a
				single present value amount pursuant to the provisions of this Section. The
				resulting single present value shall be used as the "lump-sum settlement" for
				purposes of this Chapter.
3. The
				provisions of this Chapter do not apply if all of the installments to be paid
				pursuant to the lump-sum settlement agreement are to be paid in scheduled
				increments such that the total paid each month is less than or equal to the
				recipient's disability retirement benefit for that month in the absence of any
				reduction because of benefits payable under the workers' compensation or
				similar law or the United States Social Security Act. Instead, the recipient's
				disability retirement benefits shall be reduced in the same manner as if there
				had been no lump-sum settlement agreement.
4. Any part of the lump-sum settlement
				payment amounts attributable to vocational rehabilitation, attorneys' fees,
				physicians, nurses, hospital, medical, surgical or related fees or charges of
				any amount paid or payable under former Title 39, section
				56-B for permanent impairment or
				under Title 39-A, section
				212, subsection
				3 for specific loss benefits shall
				not be included in any of the payment amounts for purposes of this
				Section.
5. The single present
				value of the settlement paid in installments shall be calculated as follows:
A. Determine the amount of the first
				installment payment if the first payment is scheduled to be issued in the same
				month or in the month immediately following the month that the settlement
				agreement is signed or otherwise approved by the approving authority.
B. To determine the present value of any
				payment to be issued in a subsequent month, except for any installment amount
				to be paid for a "term certain and life thereafter," apply an effective
				("real") interest rate of 7.75% per year.
C. Determine the present value, using an
				effective ("real") interest rate of 7.75% per year of any settlement
				installment amount to be paid for a certain term of years ("term certain") and
				life thereafter as follows:
(1) Add the
				recipient's age as used in Section
				5.3 to the number of years in the
				term certain.
(2) Using the sum
				obtained in Section
				6.5. C.1, locate on Table X the
				corresponding figure in Column B.
(3) Divide the amount obtained in Section
				6.5. C.2 by the figure in Column A
				in Table X corresponding to the recipient's age as used in Section
				5.3.
(4) Add the result in Section
				6.5. C.3 to the annuity factor on
				Table Y corresponding to the number of months in the term certain.
(5) Multiply the result obtained in Section
				6.5. C.4 by the installment amount
				to be paid annually for the term certain and life
				thereafter.
D. Add the
				total results obtained in Sections
				6.5. A, 6.5.B and 6.5.C.A to obtain
				the single value amount to be used as the amount of the "lump-sum settlement"
				for purposes of this Chapter.
The attached TABLES are an integral part of this
				  Chapter:
TABLE 'X': Annuity Factors for use with installment
				  settlement
TABLE 'Y': Annuity Factors (for installment settlements)
				  corresponding with the number of months in term certain.
APA Office Note: the tables are available from the
				  Maine State
Public Employees
Retirement
				  System.