Sec. 1. 5 MRSA §17855, first ¶, as amended by PL 1997, c. 769, §18, is further amended to read:

If any recipient of a service retirement benefit who has not reached normal retirement age as defined under section 17001, subsection 23 is restored to service and if the total of the recipient's monthly retirement benefit for any year and the recipient's total earnable compensation for that year exceed the recipient's average final compensation at retirement, increased or decreased by the same percentage adjustments as have been received under section 17806, the excess must be deducted from the service retirement benefit payments during the next calendar year, except that beginning January 1, 1999 and thereafter 1/2 the excess must be deducted from the service retirement benefit payments during the next calendar year. A deduction in benefits may not be made with respect to the earnings of any individual in any month, beginning with the month in which the individual attains normal retirement age as defined in section 17001, subsection 23.

Sec. 2. 5 MRSA §18457, first ¶, as enacted by PL 1985, c. 801, §§5 and 7, is amended to read:

If any recipient of a service retirement benefit who has not reached normal retirement age as defined under section 17001, subsection 23 is restored to service and, if the total of the recipient's monthly retirement benefit for any year and the recipient's total earnable compensation for that year exceeds his the recipient's average final compensation at retirement, increased or decreased by the same percentage adjustments as have been received under section 18407, the excess shall must be deducted from the service retirement benefit payments during the next calendar year. A deduction in benefits may not be made with respect to the earnings of any individual in any month, beginning with the month in which the individual attains normal retirement age as defined in section 17001, subsection 23.

SUMMARY

This bill eliminates the limitation on earnings of Maine State Retirement System retirees who have reached normal retirement age and have returned to work in public school systems, state government, municipalities and other public entities. Under current law, many such retirees are penalized if they return to work in the public sector.