4.__Computation of benefits.__The amount of the service retirement benefit for members qualified under subsection 2 must be computed as follows.

A.__If all of the member's creditable service in any one or a combination of the capacities specified in subsection 1 was earned after June 30, 1998 for employees identified in subsection 1, paragraphs A to H, after December 31, 1999 for employees identified in subsection 1, paragraphs I to K and after December 31, 2001 for employees identified in subsection 1, paragraphs L and M or if service credit was purchased by repayment of an earlier refund of accumulated contributions for service after June 30, 1998 for employees identified in subsection 1, paragraphs A to H, after December 31, 1999 for employees identified in subsection 1, paragraphs I to K and after December 31, 2001 for employees identified in subsection 1, paragraphs L and M, in any one or a combination of the capacities specified in subsection 1, or if service credit was purchased by other than the repayment of an earlier refund and eligibility to make the purchase of the service credit, including, but not limited to, service credit for military service, was achieved after June 30, 1998 for employees identified in subsection 1, paragraphs A to H, after December 31, 1999 for employees identified in subsection 1, paragraphs I to K and after December 31, 2001 for employees identified in subsection 1, paragraphs L and M, the benefit must be computed as provided in section 17852, subsection 1, paragraph A.

(1)__If the member had 10 years of creditable service on July 1, 1993, the benefit under subsection 2, paragraph B must be reduced as provided in section 17852, subsection 3, paragraphs A and B.

(2)__If the member had fewer than 10 years of creditable service on July 1, 1993, the benefit under subsection 2, paragraph B must be reduced by 6% for each year that the member's age precedes 55 years of age.

B.__Except as provided in paragraph D, if some part of the member's creditable service in any one or a combination of the capacities specified in subsection 1 was earned before July 1, 1998 for employees identified in subsection 1, paragraphs A to H, before January 1, 2000 for employees identified in subsection 1, paragraphs I to K and before

January 1, 2002 for employees identified in subsection 1, paragraphs L and M and some part of the member's creditable service in any one or a combination of the capacities specified in subsection 1 was earned after June 30, 1998 for employees identified in subsection 1, paragraphs A to H, after December 31, 1999 for employees identified in subsection 1, paragraphs I to K and after December 31, 2001 for employees identified in subsection 1, paragraphs L and M then the member's service retirement benefit must be computed in segments and the amount of the member's service retirement benefit is the sum of the segments.__The segments must be computed as follows:

(1)__The segment or, if the member served in more than one of the capacities specified in subsection 1 and the benefits related to the capacities are not interchangeable under section 17856, segments that reflect creditable service earned before July 1, 1998 for employees identified in subsection 1, paragraphs A to H, before January 1, 2000 for employees identified in subsection 1, paragraphs I to K and before January 1, 2002 for employees identified in subsection 1, paragraphs L and M or purchased by repayment of an earlier refund of accumulated contributions for service before July 1, 1998, for employees identified in subsection 1, paragraphs A to H, before January 1, 2000 for employees identified in subsection 1, paragraphs I to K and before January 1, 2002 for employees identified in subsection 1, paragraphs L and M in a capacity or capacities specified in subsection 1 or purchased by other than the repayment of a refund and eligibility to make the purchase of the service credit, including, but not limited to, service credit for military service, was achieved before July 1, 1998 for employees identified in subsection 1, paragraphs A to H, before January 1, 2000 for employees identified in subsection 1, paragraphs I to K and before January 1, 2002 for employees identified in subsection 1, paragraphs L and M must be computed under section 17852, subsection 1, paragraph A.__If the member is qualified under subsection 2, paragraph B and:

(a)__Had 10 years of creditable service on July 1, 1993, the amount of the segment or segments must be reduced as provided in section 17852, subsection 3, paragraphs A and B; or

(b)__Had fewer than 10 years of creditable service on July 1, 1993, the amount of the segment or

segments must be reduced as provided in section 17852, subsection 3-A; and

(2)__The segment that reflects creditable service earned after June 30, 1998 for employees identified in subsection 1, paragraphs A to H, after December 31, 1999 for employees identified in subsection 1, paragraphs I to K and after December 31, 2001 for employees identified in subsection 1, paragraphs L and M or purchased by repayment of an earlier refund of accumulated contributions for service after June 30, 1998 for employees identified in subsection 1, paragraphs A to H, after December 31, 1999 for employees identified in subsection 1, paragraphs I to K and after December 31, 2001 for employees identified in subsection 1, paragraphs L and M in any one or a combination of the capacities specified in subsection 1, or purchased by other than the repayment of a refund and eligibility to make the purchase of the service credit, including, but not limited to, service credit for military service, was achieved after June 30, 1998 for employees identified in subsection 1, paragraphs A to H, after December 31, 1999 for employees identified in subsection 1, paragraphs I to K and after December 31, 2001 for employees identified in subsection 1, paragraphs L and M must be computed under section 17852, subsection 1, paragraph A.__If the member is qualified under subsection 2, paragraph B and:

(a)__Had 10 years of creditable service on July 1, 1993, the segment amount must be reduced in the manner provided in section 17852, subsection 3, paragraphs A and B for each year that the member's age precedes 55 years of age; or

(b)__Had fewer than 10 years of creditable service on July 1, 1993, the segment amount must be reduced by 6% for each year that the member's age precedes 55 years of age.

D.__The service retirement benefit of a member who is a Maine State Prison employee to whom subsection 1, paragraph E applies, and who qualifies for service retirement benefits under subsection 2, paragraph B, must be computed under section 17852, subsection 1, paragraph A on the basis of all of the member's creditable service in the capacity specified in subsection 1, paragraph E regardless of whether the creditable service was earned before, on or after July 1, 1998, except that:

(1)__If the member had 10 years of service on July 1, 1993, the benefit must be reduced as provided in section 17852, subsection 10, paragraph C, subparagraphs (1) and (2); or

(2)__If the member had fewer than 10 years of creditable service on July 1, 1993, the benefit must be reduced as provided in section 17852, subsection 10, paragraph C-1.

Sec. A-5. 5 MRSA §17851-A, sub-§5, as amended by PL 1999, c. 493, §9, is further amended to read:

5. Contributions. Notwithstanding any other provision of subchapter III, after June 30, 1998, for employees identified in subsection 1, paragraphs A to H, and after December 31, 1999, for employees identified in subsection 1, paragraphs I to K and after December 31, 2001 for employees identified in subsection 1, paragraphs L and M, a member in the capacities specified in subsection 1 must contribute to the retirement system or have pick-up contributions made at the rate of 8.65% of earnable compensation until the member has completed 25 years of creditable service as provided in this section and at the rate of 7.65% thereafter.

PART B

Sec. B-1. 5 MRSA §17001, sub-§13, śC, as repealed and replaced by PL 1999, c. 489, §2, is amended to read:

C. The following provisions govern limitations on earnable compensation.

(1) Notwithstanding the other provisions of this subsection, for the purposes of determining average final compensation, "earnable compensation" does not include any increase that exceeds the prior year's earnable compensation by more than 5% or that results in a total increase of more than 10% 15% during the 3- year period used in the calculation of average final compensation, unless the cost of the additional actuarial liability arising from the excess increase is paid by the employer as provided in section 17154. Any payment made under paragraph B, subparagraph (1) must be included in determining the amount of increase in the year in which the payment is made. This subparagraph does not apply to excess increases resulting from compensation paid prior to July 1, 1993, from compensation paid in accordance with an individual

employment contract executed prior to July 1, 1993 or a collective bargaining agreement executed or ratified in its final form by final vote of one party to the agreement prior to July 1, 1993 for the initial term of that contract or agreement or from other action by the governing body of a school administrative unit in effect on July 1, 1993. This subparagraph does not apply to increases in compensation of state employees during fiscal year 1993-94 and fiscal year 1994-95. In all circumstances in which this subparagraph does not apply to earnable compensation of state employees and teachers, the provisions of this subparagraph that were in effect prior to June 30, 1993 apply. This subparagraph does not apply to earnable compensation of employees of participating local districts.

(2) Effective October 1, 1999, the 5% limitation and the 10% 15% limitation on increases in earnable compensation set out in subparagraph (1) on October 1, 1999 may not be changed to a lower percentage for members who, on October 1, 1999 or thereafter, meet the creditable service requirement for eligibility to receive a service retirement benefit, at the applicable age if so required, under section 17851 or section 17851-A, subsection 2.

SUMMARY

Part A of this bill adds security officers employed by Capitol Security in the Department of Public Safety and special investigators in the Attorney General's office to the 1998 Special Retirement Plan. Under that existing plan a member qualifies for a service retirement benefit if that worker is at least 55 years of age and has completed at least 10 years of creditable service in a covered capacity. A reduced retirement benefit is available before age 55 if the member has completed at least 25 years of creditable service.

Part B increases the cap on increases in earnable compensation for purposes of determining average final compensation under the Maine State Retirement System law from 10% over the 3 highest years of earnings to 15% over the 3 highest years of earnings. The annual cap of 5% remains in place.