121st Maine Legislature
		Office of Fiscal and Program Review
		LD 881
		An Act To Allow the Buyback of Active Duty Military Time for Maine State Retirement System Credit
		LR 1047(02)
		Fiscal Note for Bill as Amended by Committee Amendment " "
		Committee: Labor
		Fiscal Note Required: Yes
Fiscal Note
					Projections	Projections
			2003-04	2004-05	2005-06	2006-07
Net Cost (Savings)
	General Fund		$366,090	$0	$0	$0
	Highway Fund		$105,168	$0	$0	$0
Appropriations/Allocations
	General Fund		$366,090	$0	$0	$0
	Highway Fund		$105,168	$0	$0	$0
Fiscal Detail and Notes
	Allowing members who served in the military at a time other than during a federally recognized period of conflict to purchase service credit at a subsidized cost regardless of when membership in the retirement system began would increase the unfunded liability of the Maine State Retirement System.  Pursuant to the Constitution of Maine, Article IX, Section 18-A, unfunded liabilities may not be created except those that result from experience losses.  The Maine State Retirement System will require one-time additional General Fund appropriations and Highway Fund and other funds allocations representing the full actuarial value of the increase to the unfunded liability.  This bill utilizes an estimate prepared for legislation submitted to the 119th Legislature by the Retirement System and the Department of Veterans Affairs that indicated the increase to the unfunded liability at that time would have been approximately $701,000.  The actual amounts may vary from this amount.
	This bill includes a one-time General Fund appropriation of $291,090 and a Highway Fund allocation of $105,168 in fiscal year 2003-04 to the Maine State Retirement System for the portion of the unfunded liability attributable to state employees and a General Fund appropriation of $75,000 to the Teacher Retirement account in the Department of Education in fiscal year 2003-04 for the portion of the unfunded liability attributable to teachers.  The cost to accounts in other funds, estimated to be $229,742, may require increased allotments to meet these additional personal services expenditures.  The Maine State Retirement System may require an additional General Fund appropriation and Highway Fund and other funds allocations once the total unfunded liability is determined.  There will be an additional cost to the Maine State Retirement System for the actuarial services that will be required to update this estimate.
	According to the Retirement System, the impact of this legislation on the normal cost component can not be determined at this time.  However, it is expected to be minimal, and would emerge over time through plan experience.  The changes made by this legislation are applicable to both Participating Local Districts in the Consolidated Plan and to withdrawn PLD's only if adopted by either the Consolidated Plan Advisory Committee and the Board or by the PLD.  Since acceptance of changes by a PLD requires acceptance of the cost of the change, no unfunded liability is created.