Cost-of-Living Adjustment
(COLA) Update
The MainePERS Board of Trustees set
the 2010 COLA at their August
meeting. Based on the law, they
voted to set the COLA at 0% for
2010. This is because the CPI-U for
the fiscal year ending June 30, 2009
was -1.4%, resulting in a COLA of 0%
for 2009 and a cost to the
retirement plan which has to be
recovered. The CPI-U for the
fiscal year ending June 30, 2010 of
1.1% will be used to partially
offset the cost to the plan created
by not setting the COLA at -1.4% in
2009.
Retiree Cost-of-Living-Adjustments
are calculated annually, by law,
based on the Consumer Price Index
for All Urban Consumers (CPI-U) as
of the end of each fiscal year
ending June 30th. The law provides
that a negative COLA will not reduce
current benefits, and instead must
be fully recovered from future
positive COLAs. Future COLAs will
be adjusted until the full financial
impact of the 2009 COLA is fully
recovered. |
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Recent News
The New York Times has published a
series of articles over the last few
months about public pensions. The
most recent article was published
Wednesday, July 21, 2010, and
featured the State of Maine. Click
here for the article.
The article features Maine in part
because Maine provides a defined
benefit pension plan to its state
employees and teachers in lieu of
Social Security. Maine is what is
referred to as a “non-Social
Security” state for state employees
and teachers. The New York Times
article also focused on Maine
because the Legislature passed a law
in 2009 forming a task force to
study a new pension plan for future
employees which would be based on
Social Security participation.
The Unified Retirement Plan Task
Force researched pension options and
concluded its work with a fact-based
report about the current State
Employees and Teachers Plan
containing information for the
Legislature to consider if exploring
opting into Social Security for
future employees. The Task Force
presented its report to the
Appropriations and Labor Committees
in March 2010, who took no formal
action at that time. Click
here for the report.
Public pensions are in the news
across the country and around the
world. You may read many articles
over the next few months or years
about pension plans. Many articles
will discuss ideas being explored
about pension plans rather than
actual changes being implemented,
such as the recent New York Times
article.
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Click
here for a printable version of the final report
of the Unified Retirement Task Force,
issued March 8, 2010.
This report responds to Maine State Resolve 111, "To
Reform Public Retirement Benefits and Eliminate
Social Security Offsets" passed in May 2009 by the
124th Legislature. The basis for the legislation
was to design a unified pension and health benefit
plan for all State employees and teachers who are
first employed after December 31, 2010 with no prior
creditable service.
Read the report for facts about the current State
Employee and Teacher Retirement Program as well as
Task Force guidance regarding future pension plans. |
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New editions of the
Member Handbooks are now available for
download from our web site. The information in the
booklets is intended to give you a general
understanding of benefits available to State
Employee, Teacher and PLD members.
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