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132nd MAINE LEGISLATURE |
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LD 1003 |
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LR 1598(01) |
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An Act
Establishing the Retirement Benefit Improvement Fund |
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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 |
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Fiscal Note Required: Yes |
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Preliminary
Fiscal Impact Statement |
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Redistribution of final priority transfers
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FY 2025-26 |
FY 2026-27 |
Projections FY 2027-28 |
Projections FY 2028-29 |
Appropriations/Allocations |
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Other Special Revenue Funds |
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$500 |
$500 |
$500 |
$500 |
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Fiscal Detail
and Notes |
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Currently,
cost-of-living increases for retired teachers, state employees, judges and
legislators are applied to a portion of a retiree's benefit instead of the
full amount. In 2024, the
cost-of-living adjustment was applied to the first $25,659 of a retiree's
benefit. That amount will increase to
$26,429 for 2025. Increasing the
portion of a retiree's benefit to which the cost-of-living increase is
applied beyond this amount will create an unfunded actuarial liability that,
pursuant to the Constitution, will need to be funded prior to the increase
taking effect. The most recent cost estimate, prepared by the Maine Public
Employees Retirement System in February 2023, of applying the cost-of-living
adjustment to a retiree's full benefit amount is $1,192,325,370. |
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This bill
establishes the Retirement Benefit Improvement Fund as a dedicated,
nonlapsing fund within the Department of Administrative and Financial
Services for the purpose of accumulating funds to pay for retirement benefit
improvements for retired state employees and teachers and their beneficiaries
such as increasing the base in which a retiree's cost-of-living adjustment is
applied. The bill requires that any
remaining balance of the unappropriated surplus of the General Fund at the
end of each fiscal year be transferred, as the 5th priority, to the fund
until such time as the cost-of-living adjustment is applied to a retiree's
full retirement benefit. Adding this
priority will suspend any funding for other statutory priorities of the
cascade that fall after the Retirement Benefit Improvement Fund. |
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