C. Upon being restored to service, the person shall elect to have benefits either continued or terminated. If written notification of the person's election is not received by the executive director within 30 60 days of restoration to service, the person is deemed to have elected the provisions of paragraph B A. The election, regardless of how it is made, is irrevocable during the period of restoration to services.

Sec. 4. 5 MRSA §18457, as amended by PL 1987, c. 739, §§43 and 48, is repealed.

Sec. 5. 5 MRSA §18462, sub-§2, ¶B, as enacted by PL 1989, c. 79, §3, is repealed.

Sec. 6. 5 MRSA §18462, sub-§3, ¶B, as enacted by PL 1989, c. 79, §3, is repealed.

Sec. 7. PL 2001, c. 442, §5 is amended to read:

*Sec. 5. Status of employees who have retired and returned to covered employment under the Maine State Retirement System. Notwithstanding the Maine Revised Statutes, Title 5, section 17651, and, except as provided in Title 5, section 17857, subsection 2, recipients of a service retirement benefit from the Maine State Retirement System who have returned to covered employment under the retirement system in a position that would otherwise be covered by the retirement plan for state employees and teachers may not contribute to the retirement system, do not earn creditable service for their employment after retirement and do not earn any additional retirement benefits as a result of that employment. They may participate in other retirement options available to similar employees, including the state program of tax-deferred arrangements under Title 5, chapter 67, at the discretion of their employer. For purposes of participation in the state employee health insurance program pursuant to the Maine Revised Statutes, Title 5, section 285 or in dental health insurance coverage offered by the State, recipients of a service retirement benefit under the Maine State Retirement System who are retired state employees and who are reemployed as state employees must be treated as retirees under section 285, subsection 1-A for purposes of eligibility for coverage under the group plan.

Sec. 8. Status of employees who have retired and returned to covered participating local district employment under Maine State Retirement System. Notwithstanding the Maine Revised Statutes, Title 5, section 18251, subsection 1, recipients of a service retirement benefit from the Maine State Retirement System for service in the employment of a participating local district who have returned to covered employment under the retirement system in a position that would otherwise be covered by the retirement plan for a participating local district may not contribute to the retirement system, do not earn creditable service for their employment after retirement and do not earn any additional retirement benefits as a result of that employment.

FISCAL NOTE

This bill removes the earnings limitation for certain participating local district service retirement recipients who are restored to service after retirement. This change would automatically apply to withdrawn participating local districts, but applies to participating local districts in the consolidated plan only if it is made part of the rule that governs the consolidated plan by action of the Consolidated Plan Advisory Committee and the Board of Trustees of the Maine State Retirement System.

This bill will result in increased costs for participating local district employers to whom it applies, including those in the consolidated plan, if applicable. Eliminating the earnings limitation for retirees will ultimately reduce the total assets of the individual participating local district or consolidated plan by whatever amount would have been recouped by the participating local district or consolidated plan with an earnings limitation in place. The increase resulting from the reduction in total assets will ultimately be reflected in the ongoing normal cost.

This bill also extends the scope of the current definition of "teacher," for the purpose of Maine State Retirement System benefits, to include duties which, under current law, are not included as the duties of a teacher, even if performed by a person who holds a teacher certification. This will increase the normal cost component of the employer retirement rate resulting in increased employer contributions to the Maine State Retirement System for teachers. The expanded scope does not apply to either retirees or to periods of time served by active teachers before the effective date of the bill, so no unfunded liability is created. The number of persons affected can not be determined at this time, but the cost is not expected to be significant.

The prospective costs associated with this bill can only emerge through plan experience and will be determined as part of the annual valuations for an individual withdrawn district or the consolidated plan.

SUMMARY

This bill repeals the current law that provides for reduction in benefits for retirees of participating local districts under the Maine State Retirement System who return to employment in a participating local district covered by the retirement system if they exceed certain earnings limitations. The bill would permit retirees to return to covered service and keep both their pension and their full earnings. Retirees who take advantage of the provisions of the bill would not be eligible to earn additional retirement benefits based on their return to service employment. This bill is similar to Public Law 2001, chapter 442 enacted last year and covering state employees and teachers.