Sec. 1. 5 MRSA §18530, sub-§4, ¶B, as enacted by PL 1989, c. 409, §§11 and 12, is amended to read:

B. The reduction in the disability retirement benefit is governed as follows:

(1) The initial disability retirement benefit shall must be reduced if necessary so that the benefit plus any benefits under paragraph A do not exceed 80% of the person's average final compensation annual earnings.__For the purposes of this subparagraph, "average annual earnings" means the total of the person's average final compensation plus other wages and earnings for the calendar year in which the person has the highest total of other wages and earnings during the 5 years immediately preceding the year in which the person became disabled;

(2) The amount determined by the calculation under subparagraph (1) shall not be adjusted when cost-of- living adjustments are applied to the benefits listed under paragraph A; and

(3) Adjustments under section 18407 shall be applied to the reduced disability retirement benefit calculated under subparagraph (1) or paragraph C.

SUMMARY

This bill limits the reduction of a disability retiree's benefit under the Maine State Retirement System for disability retirees who are collecting benefits under either or both the Untied States Social Security System or workers' compensation laws and the retirement system. Under current law, the retirement system benefit in such cases is reduced to an amount that added to the benefits collected under the United States Social Security System or workers' compensation laws does not exceed 80% of the disability retiree's average final compensation under the retirement system. The bill reduces the benefit to an amount that does not exceed 80% of the disability retiree's total average annual wages and earnings prior to being disabled, including employment not covered by the retirement system.