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130th MAINE LEGISLATURE |
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LD 956 |
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LR 907(02) |
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An Act To Amend
the Eligibility Criteria for Creditable Service in the Armed Forces of the
United States under the State Retirement System |
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Fiscal Note for
Bill as Amended by Committee Amendment " " |
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Committee: Labor and Housing |
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Fiscal Note Required: Yes |
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Fiscal Note |
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FY 2021-22 |
FY 2022-23 |
Projections FY 2023-24 |
Projections FY 2024-25 |
Net Cost
(Savings) |
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General Fund |
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$4,900,000 |
$0 |
$0 |
$0 |
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Appropriations/Allocations |
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General Fund |
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$4,900,000 |
$0 |
$0 |
$0 |
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Fiscal Detail
and Notes |
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Expanding the
periods of conflict in which members of the State Employee and Teacher
Retirement Plan who served in the armed forces during those periods of
conflicts can purchase service credit at a subsidizable rate will increase
the unfunded actuarial liability (UAL) of the Maine Public Employees
Retirement System (MainePERS).
Pursuant to the Constitution of Maine, Article IX, Section 18-A,
unfunded liabilities may not be created except those that result from experience
losses. |
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Because the
number of members who have served in the expanded periods of conflict and how
many of those eligible members would choose to purchase the additional
service credits are not known, MainePERS could not determine the actual cost
of this provision. However, on
average, MainePERS receives approximately 7 inquiries per year from members
in the State Employee and Teacher Retirement Plan who, had this provision
been in place, would have been eligible to purchase the service credits at
the subsidized rate. The subsidized
portion of the total cost for the additional service credits for those
members that requested estimates range from $60,000 to $80,000 per member. Assuming 7 members purchase service credits
each year and that the members are within 10 to 15 years of retirement age,
the total cost of this provision could range from $4.9 million to $7.4
million, which will need to be funded immediately in order to avoid the
creation of an unfunded actuarial liability.
This bill includes a one-time General Fund appropriation of $4,900,000
to the Retirement Allowance Fund within MainePERS to fund the UAL at the
lower estimated cost. However,
additional funding may need to be provided immediately if the actual cost of
this provision is greater than the funding provided in this bill. |
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