121st Maine Legislature
		Office of Fiscal and Program Review
		LD 718
		An Act To Create a New Pension System for Newly Hired Teachers and State Employees
		LR 0839(01)
		Fiscal Note for Original Bill
		Sponsor: Rep. Mills of Cornville
		Committee: Labor
		Fiscal Note Required: Yes
Fiscal Note
Undetermined current biennium cost increase - All Funds
Fiscal Detail and Notes
	The actual cost to the State and to the Maine State Retirement System can not be determined at this time and will depend on the specific features of the new defined benefit plan.  The Maine State Retirement System has indicated that retirement costs to the State would increase in the near term if this proposal is approved.  The State will continue to pay down the unfunded actuarial liability of the existing defined benefit plan.  The State will also continue to pay the normal cost for those State employees and teachers who would remain on the existing plan.  The normal cost rate may increase as a result of no new hires being brought in to offset the rapidly aging population in the existing plan.  The State will contribute to the new defined benefit plan on behalf of the newly hired State employees and teachers for both the mandatory and optional features of the plan.  Finally, the State will contribute to Social Security for the new hires in addition to the contribution for the normal cost component.  The current employer cost for Social Security is 7.65% of payroll.