123rd MAINE LEGISLATURE
		LD 1693		LR 2016(01)
	An Act To Restore Equity to the Maine State Retirement System
	Fiscal Note for Original Bill
	Sponsor: President Edmonds of Cumberland
	Committee: Labor
	Fiscal Note Required: Yes
Fiscal Note
Current biennium cost increase - All funds
Fiscal Detail and Notes
	Reducing the penalty for retiring earlier that 62 years of age from 6% per year to 3% per year will increase the normal cost component of the employer retirement rate by 0.17%, resulting in increased employer contributions to the Maine State Retirement System for all state employees and teachers, not just those participants who are impacted by this provision.  This provision will also increase the unfunded liability of the Maine State Retirement System by approximately $80.2 million.  Pursuant to the Constitution of Maine, Article IX, Section 18-A, unfunded liabilities may not be created except those that result from experience losses.  The Maine State Retirement System will require one-time additional General Fund appropriations and Highway Fund and other funds allocations representing the full actuarial value of the increase in the unfunded liability.
	Providing for a revision to the benefits for those current retirees who retired with a 6% early retirement reduction so that their benefits would instead be based on the 3% early retirement reduction proposed in this legislation is anticipated to cost the State an additional $97,775 if provided on a prospective basis only.  The cost to apply this provision retroactively is estimated to be $7,725.