SP0347, LD 1045, item 1, An Act To Create More Transparency in the Setting of Normal Teacher Retirement Costs

An Act To Create More Transparency in the Setting of Normal Teacher Retirement Costs

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 5 MRSA §17154, sub-§6, as amended by PL 2013, c. 368, Pt. C, §1, is further amended to read:

6. Payment of employer charges for teachers. For teachers, percentage rates to be predetermined by the actuary and approved by the board must be based on the actuarial report required by subsection 12 and must be applied to the total earnable compensation of members covering the most recent school year preceding the preparation of the biennial budget.

A. The resulting amount must be appropriated and credited to the appropriate funds.

B. Notwithstanding this section, the employer retirement costs and administrative operating expenses related to the retirement programs applicable to those teachers whose funding is provided from federal grants or through federal reimbursement must be paid by local school systems from those federal funds.

C. Notwithstanding this section, the employer retirement costs and administrative operating expenses related to the retirement program applicable to those teachers who are permitted to continue to accrue service credit while on a one-year leave of absence and participating in the education of prospective teachers by teaching and supervising students enrolled in college-level teacher preparation programs in this State must be paid from funds provided by the college employing the teacher during that year.

D. Notwithstanding this section, the employer retirement costs and administrative operating expenses related to the retirement program applicable to a teacher who is permitted to continue to accrue service credit while on a leave of absence and serving as President of the Maine Education Association must be paid from funds provided by the Maine Teachers Association. For purposes of this paragraph, in computing the employer cost, "earnable compensation" means the amount that the teacher would have earned if the teacher had remained in a teaching position.

E. Notwithstanding this section, the employer retirement costs and administrative operating expenses related to the retirement program applicable to those teachers whose funding is provided directly or through reimbursement from private or public grants must be paid by local school systems from those funds. "Public grants" does not include state or local funds provided to school administrative units under Title 20-A, chapters 315 and 606-B.

F. Notwithstanding this section, effective September 1, 1993, the employer retirement costs and administrative operating expenses related to the retirement program, less the unfunded liability, that are applicable to a teacher who is permitted to continue to accrue service credit while on released time and serving as president of a recognized or certified collective bargaining agent representing teachers must be paid from funds provided by the collective bargaining agent or school administrative unit. For purposes of this paragraph, in computing the employer cost, "earnable compensation" means the amount that the teacher would have earned if the teacher had remained in a teaching position.

G. Notwithstanding this section, beginning in fiscal year 2013-14, the employer retirement costs that are applicable to the normal cost of retirement for a teacher must be included in the total allocation in accordance with Title 20-A, chapter 606-B for the school administrative unit that employs the teacher.

H. Notwithstanding this section, beginning in fiscal year 2013-14, the employer retirement costs and administrative operating expenses related to the retirement programs applicable to those teachers employed by school administrative units, as defined in Title 20-A, section 1, subsection 26, whose funding is provided from local and state funds must be paid by local school administrative units.

I. Notwithstanding this section, beginning in fiscal year 2013-14, the employer retirement costs and administrative operating expenses related to the retirement programs applicable to those teachers employed by private schools, as defined in Title 20-A, section 1, subsection 22, must be paid by the private school.

Sec. 2. 5 MRSA §17154, sub-§12 is enacted to read:

12. Actuarial report; normal teacher retirement costs. By May 31, 2018, and biennially thereafter, the board shall prepare an actuarial report on the normal costs of teacher retirement. The report must include actuarial estimates of normal costs of teacher retirement for each of the next 10 state fiscal years and reasons for projected increases or decreases in those costs. The board shall present the report to a joint meeting of the joint standing committee of the Legislature having jurisdiction over education matters and the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs matters.

Sec. 3. Legislative review of normal teacher retirement costs. The Joint Standing Committee on Appropriations and Financial Affairs shall conduct a review of the historical and projected future actuarial value of normal teacher retirement costs. The Legislative Council, through the Office of Fiscal and Program Review, shall provide staffing services to the committee, including, but not limited to, conducting the analysis required in subsection 3. No later than December 6, 2017, the committee shall report the results of its review to the Second Regular Session of the 128th Legislature. The review must include, but is not limited to:

1. The history of increases in normal teacher retirement costs before and after these costs were shifted from the State to local school administrative units beginning in state fiscal year 2013-14, pursuant to the Maine Revised Statutes, Title 5, section 17154, subsection 6, paragraph G;

2. The reasons for changes in the actual or projected value of normal teacher retirement costs in state fiscal years 2014-15, 2015-16, 2016-17 and 2017-18; and

3. An analysis of how adding normal teacher retirement costs to the total allocation, in accordance with the Maine Revised Statutes, Title 20-A, chapter 606-B, has affected total education costs, including any effects on general purpose aid.

SUMMARY

This bill requires the Board of Trustees of the Maine Public Employees Retirement System to prepare and present an actuarial report on normal teacher retirement costs to a joint meeting of the joint standing committee of the Legislature having jurisdiction over education matters and the joint standing committee of the Legislature having jurisdiction over appropriations and financial affairs matters by May 31st of even-numbered years. It also requires the board to rely on this biennial actuarial report in its determination of the percentage of total teacher compensation required to fund normal teacher retirement costs.

This bill also requires the Joint Standing Committee on Appropriations and Financial Affairs to conduct a review of the historical and projected future actuarial value of normal teacher retirement costs. It requires the committee to report the results of its review to the Second Regular Session of the 128th Legislature.

SP0347 LD 1045	Session - 128th Maine Legislature		LR 940 Item 1
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