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131st MAINE LEGISLATURE |
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LD 70 |
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LR 209(01) |
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An Act to
Eliminate the Cap on Retirement Benefits for State Employees and Teachers to
Which a Cost-of-living Adjustment Is Made |
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Preliminary
Fiscal Impact Statement for Original Bill |
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Sponsor: Rep. Dodge of Belfast |
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Committee: Labor and Housing |
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Fiscal Note Required: Yes |
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| Preliminary
Fiscal Impact Statement |
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Future biennium cost increase - All funds
Future biennium cost increase - Local school administrative units |
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FY 2023-24 |
FY 2024-25 |
Projections FY 2025-26 |
Projections FY 2026-27 |
| Net Cost
(Savings) |
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General Fund |
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$1,192,325,370 |
$0 |
$0 |
$0 |
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| Appropriations/Allocations |
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General Fund |
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$1,192,325,370 |
$0 |
$0 |
$0 |
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| Fiscal Detail
and Notes |
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This legislation
requires that cost-of-living increases for retired teachers, state employees,
judges and legislators be applied to the retiree's entire retirement benefit
instead of only to the first $24,186.25 as required in current law. According to the Maine Public Employees
Retirement System, this provision will create an unfunded actuarial liability
(UAL) totaling $1,192,325,370 that, pursuant to the Maine Constitution, will
have to be funded immediately. The
Teacher Retirement program within the Department of Education will require a
one-time General Fund appropriation of $828,131,082 in fiscal year 2023-24
for the retired teachers' portion of the UAL cost. A one-time General Fund appropriation of
$364,194,288 to the Retirement Allowance Fund within the Maine Public
Employees Retirement System will be required in fiscal year 2023-24 to pay
for the retired state employees, judges and legislators portion of the UAL
cost. |
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This provision
will also increase the normal cost component of the employer retirement rate
beginning in the 2026-2027 biennium (future costs). The increase in the employer contribution
rate for state employees and teachers under the state employee and teacher
retirement program is estimated to be 0.74% and 0.70%, respectively. The increase in the employer contribution
rate for judges under the judicial retirement program is anticipated to be
2.17%. |
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