LD 1872 Update
Last spring the Maine Association of Retirees (MAR) emailed you to ask for your help with the effort to support LD 1872, An Act to Reinvest in the Pension Funds of the Maine Public Employees Retirement System. Many thanks to those who responded. Ultimately, LD 1872 was carried over to the Maine Legislature’s current session. MAR is pleased to let you know that the bill, in an amended form, has now been voted out of the Legislature’s Labor Committee with an “Ought to Pass as Amended” majority vote. However, it still needs to be passed by a vote in the House and Senate. We now ask for your continuing support in getting LD 1872 “over the finish line” by contacting your local legislator and urging them to support it. The original LD 1872 and the most Amendment are attached. You can contact your legislator(s) at https://legislature.maine.gov/
LD 1872 provides a unique opportunity to create a way forward towards increasing the maximum retirement benefit base to which our annual cost-of-living adjustments (COLAs) are applied. It preserves the annual COLA on an indexed benefit base rather than applying it to the full benefit. But rather than simply proposing an increased benefit base without any way to fund it, as many previous bills have done, this bill proposes the creation of a fund toward which the State would contribute $185 million per year for five years. When that fund becomes adequate to provide a $1,000 annual increase to the retired state employees and educators benefit base, that would be done until the benefit base used for COLA calculations reaches $40,000. This would be in addition to the annual COLA increase, which is currently limited to a 3% cost-of-living adjustment each year.
MAR recognizes that LD 1872, as amended, falls short of restoring the full COLA benefit lost in 2011. However, it would provide a substantial enhancement to our current retirement benefits for state and educator retirees. Two key advantages of this bill are:
it avoids conflicting with a constitutional provision limiting unfunded expenditures, and
this would become a statutory mandate that will continue to benefit retirees for years unless a future Legislature were to take action to repeal the mandate.
NOTE: LD 1872 does not affect Participating Local Districts (PLDs). PLD retirees’ annual COLA benefits continue to be based on the retirees’ full retirement benefit base subject to a 2.5% cap.