Section 411-302-4 - Employer Payment to Maine State Retirement System for Costs Relating to Early Retirement IncentivesA. Additional actuarial costs. The additional actuarial costs that result from the early retirement of a member who has been offered and/or provided a retirement Incentive shall be paid to the Maine State Retirement System by the employer. (1) Calculation of additional actuarial costs. The Maine State Retirement System shall determine the additional actuarial costs for which the employer is liable in individual situations as follows: Step 1. The annual retirement benefit payable to the member upon his or her early retirement date shall be calculated in accordance with the governing provisions of the Maine State Retirement System statutes and rules.
Step 2. The annual retirement benefit that would be payable to the member on a fully actuarially reduced basis shall be calculated in accordance with the actuarial equivalent early retirement reduction factors prescribed by the System's consulting actuary and approved by the Board of Trustees.
Step 3. The retirement benefit calculated in Step 2 shall be subtracted from the retirement benefit calculated in Step 1.
Step 4. A present value factor shall be applied to the amount determined in Step 3 to convert the annual benefit amount to a lump sum present value dollar amount. This amount represents the additional actuarial cost resulting from the early retirement of a member who has been offered a retirement incentive.
(2) Payment of additional actuarial costs. The Maine State Retirement System shall bill the employer of retiring members who will receive or have received early retirement incentives for the additional actuarial costs as determined by the System in subsection 1 above. The bill must be accompanied by a statement of the basis of the costs identified in the bill and the supporting calculations. The employer must pay this amount to the Maine State Retirement System within 30 days of receipt of the bill.(3) Finality. All determinations of additional actuarial costs are subject to recalculation upon the actual retirement of the member and upon any subsequent recalculation of the member's early retirement benefit due to misreporting of member-specific information, error or any direction by the Board to recalculate a member's benefit. Any resulting change in additional actuarial costs would be paid or refunded, as appropriate, to the employer. Any administrative costs for recalculation of additional actuarial costs that is caused by actions of the employer shall be paid by the employer.B. Reasonable administrative costs. (1) Processing fee. Subject to review and approval by the Board, the Executive Director will establish and may revise from time to time an administrative processing fee to determine the member-specific additional actuarial costs relating to an early retirement incentive for which the employer is liable. The fee will be based on the time required for making such determinations, will be reasonable, and will not be set at a level which requires the System's members and employers as a whole to subsidize the cost of a determination. The fee must be paid; before the System determines the member-specific additional actuarial costs.(2) Calculation of administrative costs. The employer must pay any additional actual administrative costs for member-specific information at an hourly administrative cost rate for the System plus the System's actual costs related to actuarial and legal service. Subject to review and approval by the Board, the Executive Director will establish and may form time to time revise the administrative cost rate.(3) Payment of Administrative costs. The employer will be billed for any actual administrative costs beyond the processing fee. If the member is already receiving a retirement benefit or preliminary benefit when the employer is billed for administrative costs, the employer will also be charged interest as a cost and must pay interest retroactive to the member's effective date of retirement. The employer must pay the administrative costs to the Maine State Retirement System within 30 days of receipt of the bill. the bill will be accompanied by a statement of the basis of the administrative costs.C. Appeal. If the employer or the member disputes the determination that additional actuarial costs must be paid by the employer, the amount of the additional actuarial costs, or the amount of actual administrative costs, an appeal may be brought pursuant to 5 MRSA §17451 and Chapter 702 of the Board's rules.D. Non-payment of costs. Interest at the regular rate will be charged by the System and must be paid by the employer on all overdue amounts pertaining to the processing fee, additional actuarial costs and administrative costs. In addition, an employer who fails to pay is liable for penalties on a case by case basis as recommended by the Executive Director and approved by the Board of Trustees and shall pay all the System's costs associated with collection of the amounts overdue and/or enforcement of this rule.94- 411 C.M.R. ch. 302, § 4