123rd MAINE LEGISLATURE
		LD 1223		LR 912(01)
	An Act To Provide a Uniform Retirement Plan for Corrections Officers and Mental Health Workers
	Fiscal Note for Original Bill
	Sponsor: Sen. Strimling of Cumberland
	Committee: Labor
	Fiscal Note Required: Yes
Fiscal Note
Current biennium cost increase - General Fund Future biennium cost increase - Federal Expenditures Fund Future biennium cost increase - Other Special Revenue Funds
Fiscal Detail and Notes
	Adding mental health workers to the 1998 Special Plan and providing that all service for corrections and mental health workers is to be considered as service earned in the 1998 Special Plan, regardless of when that service was earned will increase the normal cost component of the employer retirement rate resulting in increased employer contributions to the Maine State Retirement System and increase the unfunded liability of the Retirement System.
	In order to address these costs, this legislation creates the Corrections and Mental Health Workers Service Retirement Benefit Reserve and proposes to divert funds from the unappropriated surplus of the General Fund at the end of each fiscal year, beginning in fiscal year 2007-08, that would otherwise be transferred to the Retirement Allowance Fund, pursuant to 5 MRSA §1536, sub-§1(B), in order to reserve funds to meet the full actuarial costs of the provisions of this bill, including the normal cost rates for the 6 years following the effective date of the legislation.  This legislation also states that the plan changes proposed in this bill do not become effective until full funding is available as certified by the Maine State Retirement System.
	The cost of this legislation, including the loss of potential savings as a result of diverting funds from the Retirement Allowance Fund that otherwise would be transferred from the unappropriated surplus of the General Fund, if available at year-end, and applied to the unfunded liability can not be determined at this time. Information provided by the Maine State Retirement System indicates that the transfer of $13.1 million from the unappropriated surplus at the end of fiscal year 2004-05 resulted in cumulative savings of approximately $31.5 million over the 21 year amortization schedule.
	It is also unknown whether there will be sufficient funds available to transfer to the retirement benefit reserve to fully fund this provision by fiscal year 2012-13 or to fund the normal cost component on an annual basis.   The General Fund has had year-end surpluses over the past 4 consecutive fiscal years which allowed for a total of $63.7 million to be transferred to the Retirement Allowance Fund, with 17.5 million being transferred at the end of fiscal year 2005-06 and, as stated above, $13.1 million at the end of fiscal year 2004-05.  At the present time, it appears that there will not be any surplus funds available for this purpose at the end of fiscal year 2006-07.  Public Law 2007, Chapter 1, Part L provides for the transfer of up to $82,000,000 from the unappropriated surplus of the General Fund to the Department of Health and Human Services, Medical Care - Payments to Providers account as the first priority after the transfers required pursuant to 5 MRSA §1507 and §1511 and before the transfers required pursuant to 5 MRSA, §1536.