Section 411-510-6 - DETERMINING THE AMOUNT OF THE "LUMP-SUM SETTLEMENT" IF THE SETTLEMENT PROVIDES FOR PAYMENT IN A MONTH OR MONTHS FOLLOWING THE DATE THAT THE SETTLEMENT AGREEMENT IS SIGNED BY THE APPROVING AUTHORITY1. If the lump-sum settlement is to be paid in a single payment but at a date subsequent to the effective date of the settlement agreement, then the single settlement payment must be converted into a single present value amount using the methodology of Section 6.5. B. The resulting present value shall be used as the amount of the lump-sum settlement for purposes of this Chapter.2. If the lump-sum settlement is to be paid not as a single settlement payment, but instead is to be paid in installments, then the installment amounts must be converted into a single present value amount pursuant to the provisions of this Section. The resulting single present value shall be used as the "lump-sum settlement" for purposes of this Chapter.3. The provisions of this Chapter do not apply if all of the installments to be paid pursuant to the lump-sum settlement agreement are to be paid in scheduled increments such that the total paid each month is less than or equal to the recipient's disability retirement benefit for that month in the absence of any reduction because of benefits payable under the workers' compensation or similar law or the United States Social Security Act. Instead, the recipient's disability retirement benefits shall be reduced in the same manner as if there had been no lump-sum settlement agreement.4. Any part of the lump-sum settlement payment amounts attributable to vocational rehabilitation, attorneys' fees, physicians, nurses, hospital, medical, surgical or related fees or charges of any amount paid or payable under former Title 39, section 56-B for permanent impairment or under Title 39-A, section 212, subsection 3 for specific loss benefits shall not be included in any of the payment amounts for purposes of this Section.5. The single present value of the settlement paid in installments shall be calculated as follows: A. Determine the amount of the first installment payment if the first payment is scheduled to be issued in the same month or in the month immediately following the month that the settlement agreement is signed or otherwise approved by the approving authority.B. To determine the present value of any payment to be issued in a subsequent month, except for any installment amount to be paid for a "term certain and life thereafter," apply an effective ("real") interest rate of 7.75% per year.C. Determine the present value, using an effective ("real") interest rate of 7.75% per year of any settlement installment amount to be paid for a certain term of years ("term certain") and life thereafter as follows:(1) Add the recipient's age as used in Section 5.3 to the number of years in the term certain.(2) Using the sum obtained in Section 6.5. C.1, locate on Table X the corresponding figure in Column B.(3) Divide the amount obtained in Section 6.5. C.2 by the figure in Column A in Table X corresponding to the recipient's age as used in Section 5.3. (4) Add the result in Section 6.5. C.3 to the annuity factor on Table Y corresponding to the number of months in the term certain.(5) Multiply the result obtained in Section 6.5. C.4 by the installment amount to be paid annually for the term certain and life thereafter.D. Add the total results obtained in Sections 6.5. A, 6.5.B and 6.5.C.A to obtain the single value amount to be used as the amount of the "lump-sum settlement" for purposes of this Chapter. The attached TABLES are an integral part of this Chapter:
TABLE 'X': Annuity Factors for use with installment settlement
TABLE 'Y': Annuity Factors (for installment settlements) corresponding with the number of months in term certain.
APA Office Note: the tables are available from the Maine State Public Employees Retirement System.
94-411 C.M.R. ch. 510, § 6