An Act Regarding Penalties for Early Retirement for Certain Members of the Maine Public Employees Retirement System

Sec. 1. Reduction in early retirement penalty for certain state employees and teachers. Notwithstanding the Maine Revised Statutes, Title 5, section 17852, subsection 3-A or any other provision of law to the contrary, the reduction in the retirement benefit for a qualified member is 2.25% for each year that the qualified member's age precedes 62 years of age at retirement.

As used in this section, "qualified member" means a member of the Maine Public Employees Retirement System who:

1. Retired from service as a state employee between July 1, 2011 and January 1, 2012 or as a teacher between July 1, 2011 and July 1, 2012;

2. Had completed 25 or more years of creditable service upon retirement;

3. Had neither 10 years of creditable service nor had reached 60 years of age with one year of creditable service immediately before July 1, 1993; and

4. Had not attained 62 years of age as of retirement from service as a state employee or teacher.

As used in this section, the terms "creditable service," "employee," "member," "retirement," "retirement benefit," "state employee" and "teacher" have the same meaning as in Title 5, section 17001.

SUMMARY

Under changes made to the Maine Public Employees Retirement System in 1993, employees who were members of the Maine Public Employees Retirement System as of July 1, 1993 but did not have 10 years of creditable service as of July 1, 1993 are required to have 25 years of creditable service and attain 62 years of age in order to avoid incurring a penalty of 6% of earned benefits for each year the person retires before attaining 62 years of age. Prior to that change, the penalty was 2.25% for each year below 60 years of age the person retired.

This bill changes the rate of the penalty for those state employees who retired between July 1, 2011 and January 1, 2012 and for teachers who retired between July 1, 2011 and July 1, 2012 who had at least 25 years of service on July 1, 2011 but had not attained 62 years of age to 2.25% for each year the person was below 62 years of age upon retirement from service.