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Local retirement costs released early to help with budget preparation
The Maine Public Employees Retirement System recently sent out new rates for normal teacher retirement costs, which show what districts have to pay to cover working teachers, and the rate of increase has slowed for this upcoming biennium.
The rate is going from the current 3.97 to 4.16 percent in the biennium covering fiscal years 2020 and 2021. That translates to a cost increase of $3 million statewide in the 2019-2020 school year – a number that goes up another $1 million in 2020-2021.
The information was sent in mid-October to allow districts to better prepare their local budgets. Along with those rates, MainePERS included information on how the rates are determined and what has driven rate increases in the past. The Maine School Boards Association passed a resolution in 2015 asking for an earlier notification deadline since schools had been finding out the number in January when local budget preparation was well underway. While a bill requiring the earlier release was vetoed by the governor, the Maine Public Employees Retirement System has worked to satisfy the intent of the bill.
The chart below shows the history of rate increases and statewide costs since districts became responsible for the payment. The cost-shift was voted in by the Legislature to help fill a hole in the biennial budget.
Fiscal Year Rate Statewide Cost
FY 14 2.65 $29 million
FY 15 2.65 $30 million
FY 16 3.36 $37 million
FY 17 3.36 $39 million
FY 18 3.97 $46 million
FY 19 3.97 $47 million
FY 20 4.16 $50 million
FY 21 4.16 $51 million