An Act To Implement the Combination Defined Benefit and Defined Contribution Retirement Plan Described in a Report Submitted to the Joint Standing Committee on Appropriations and Financial Affairs in March 2012

Sec. 1. 5 MRSA §17651,  as amended by PL 2007, c. 491, §94, is further amended to read:

§ 17651. Mandatory membership

All state employees and teachers hired prior to July 1, 2017 become members of the State Employee and Teacher Retirement Program as a condition of their employment.

Sec. 2. 5 MRSA c. 429  is enacted to read:

CHAPTER 429

ADJUSTABLE PENSION PLAN PROGRAM

SUBCHAPTER 1

GENERAL PROVISIONS

§ 18821.  Information from departments

§ 18822.  Establishment

The Adjustable Pension Plan Program is established as a governmental qualified retirement plan pursuant to Sections 401(a) and 414(d) of the Internal Revenue Code and such other provisions of the Internal Revenue Code and United States Treasury regulations and other guidance as are applicable for state employees and teachers, to be administered by the Maine Public Employees Retirement System.

SUBCHAPTER 2

MEMBERSHIP

§ 18851.  Mandatory membership

All state employees and teachers hired on or after July 1, 2017 are covered by the United States Social Security Act, participate in the federal social security system and become members of the Adjustable Pension Plan Program as a condition of their employment.

Sec. 3. Review; implementing legislation. The Maine Public Employees Retirement System, referred to in this section as "the system," shall review the laws governing the State Employee and Teacher Retirement Program, established in the Maine Revised Statutes, Title 5, chapter 423. The system shall develop proposed legislation necessary to implement the Adjustable Pension Plan Program, established in Title 5, chapter 429, in accordance with the plan document developed by the system and submitted in March 2012 to the Joint Standing Committee on Appropriations and Financial Affairs pursuant to Public Law 2011, chapter 380, Part U, section 2. Specifically, the system shall propose corrective amendments to the laws governing retirement that are in existence on the effective date of this Act and shall propose detailed statutory language necessary to inform affected persons of the legal rights, responsibilities and duties resulting from the enactment of the Adjustable Pension Plan Program. The system may request assistance from the Legislative Council in drafting the legislation.

No later than December 2, 2015, the system shall submit the proposed legislation to the joint standing committee of the Legislature having jurisdiction over state employee and teacher retirement matters. After receipt and review of the suggested legislation, the joint standing committee of the Legislature having jurisdiction over state employee and teacher retirement matters may submit a bill to the Second Regular Session of the 127th Legislature to implement the Adjustable Pension Plan Program.

summary

This bill establishes the Adjustable Pension Plan Program, a combined defined benefit and defined contribution retirement plan, to replace the State Employee and Teacher Retirement Program for state employees and teachers hired on or after July 1, 2017. Under the bill, all state employees and teachers hired on or after July 1, 2017 are covered by the United States Social Security Act, participate in the federal social security system and become members of the Adjustable Pension Plan Program as a condition of their employment. This bill also directs the Maine Public Employees Retirement System to review the laws governing the existing retirement program and develop proposed legislation necessary to implement the Adjustable Pension Plan Program in accordance with the plan document developed by the Maine Public Employees Retirement System and submitted in March 2012 to the Joint Standing Committee on Appropriations and Financial Affairs pursuant to Public Law 2011, chapter 380, Part U, section 2.