2013 Approved Changes To The Participating Local District (PLD) Consolidated Plan
The Participating Local District Advisory Committee (PLD Committee) membership is designated by legislation by organization. Committee members representing designated organizations, continuously monitor the PLD Plan to protect its fiscal health and responsiveness to employer and member needs. Participating employer and employee committee members unanimously recommended modernization of benefit provisions for newly hired plan members consistent with the trends in many defined benefit plans. Committee members also recommended rate increases and changes in cost-of-living-adjustments (COLAs) for all members and retirees in response to the impacts on plan assets of the 2008 severe financial market downturn.
The following overview summarizes the changes that were recommended by the Participating Local District Advisory Committee (PLD Committee). Changes in rates were submitted to the MainePERS Board of Trustees for approval and implementation. The remaining changes required legislative approval and were submitted to the Legislature in January, 2013. The changes were enacted as PL2013, C. 391.
Employer rates are scheduled to return to their original level of 8% by FY2015. The remaining recommendations were a result of a multi-year review by the committee of the Plan’s funding level, which was 87% funded as of June 30, 2012. PLD Committee members requested and reviewed a cost report prepared by MainePERS and unanimously agreed that actions beyond employer rate increases were needed to maintain the strong fiscal condition of this plan. Members further agreed any actions should be consistent with good retirement plan management, benefit design, and shared by employers, employees and beneficiaries or retirees.
Approved changes are as follows:
For New Members to the Plan after June 30, 2014:
• Normal retirement age of 65 1
• Early retirement reduction factor increases from approximately 2.25% to 6% 2
For all PLD Members:
• Post-retirement cost-of-living adjustments (COLA) become available after 12 months of retirement, instead of six months 3 – applicable to those who retire on or after September 1, 2015.
• The post-retirement COLA cap changes from 4% to 3%.
The Committee further recommends that the MainePERS Board of Trustees:
• Increase employee contributions of all plans by .5% for three years for a total of 1.5% beginning once the employer contribution rate has reached 8% in fiscal year 2015. The first increase to the employee contribution rate is scheduled for July 1, 2014.
1 Members who change employers within the PLD Plan would not be affected by this change.
2 Members who change employers within the PLD Plan would not be affected by this change.
3 This change will start 18 months after the effective date of legislation to avoid interfering with plans of
members who are currently in the retirement process. This change will not affect members who retire prior to
September 1, 2015.