An Act To Preserve the State's Public Pension Fund
Emergency preamble. Whereas, acts and resolves of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, the Maine Public Employees Retirement System has been significantly underfunded in past years and has experienced significantly lower earnings on investments in recent years due to economic downturns; and
Whereas, the system is in immediate need of additional funding in order to maintain stability and ensure that it is able to meet the State’s commitment to providing retirement benefits anticipated by state employees and teachers; and
Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Sec. 1. 5 MRSA §17701-C is enacted to read:
§ 17701-C. Additional member contribution
For state fiscal years beginning July 1, 2011 to July 1, 2016, all members shall contribute to the State Employee and Teacher Retirement Program or have pick-up contributions made at a rate of 1% of earnable compensation in addition to contributions required under sections 17701, 17701-A and 17701-B.
Sec. 2. 5 MRSA §17806, sub-§1, ¶D is enacted to read:
(1) For persons with an annual pension of $25,000 or less, cost-of-living adjustments are not limited.
(2) For persons with an annual pension greater than $25,000 but not greater than $45,000, the cost-of-living adjustment is reduced by 50%.
(3) Persons with an annual pension greater than $45,000 receive no cost-of-living adjustment.
Sec. 3. Review. During the First Regular Session of the 128th Legislature, the joint standing committee of the Legislature having jurisdiction over Maine public employees retirement system matters shall review the changes made in this Act to contribution levels and cost-of-living adjustments for retirement benefits and make recommendations whether those changes should be continued.
Emergency clause. In view of the emergency cited in the preamble, this legislation takes effect when approved.
SUMMARY
This bill makes changes to the State's public pension laws to improve the financial condition of the Maine Public Employees Retirement System. For the next 6 years, the bill increases the amount of contributions to the Maine Public Employees Retirement System made by state employees and teachers by 1% of earnable compensation. The bill also reduces for 6 years the cost-of-living adjustments for retirement benefits by 50% for persons with annual pensions greater than $25,000 but not greater than $45,000 and suspends for 6 years cost-of-living adjustments for persons with annual pensions greater than $45,000. Persons with pensions of $25,000 or less continue to receive cost-of-living adjustments. The bill provides for a review of these changes during the 128th Legislature.