AGO 06-3.

Case Date:March 07, 2006
Maine Attorney General Opinions 2006. AGO 06-3. STATE OF MAINE OFFICE OF THE ATTORNEY GENERAL6 STATE HOUSE STATION AUGUSTA, MAINE 04333-0006 March 7, 200606-3Sandra Featherman, ChairJudicial Compensation Commission c/o 5 State House Station Augusta, ME 04333-0005 Dear Ms. Featherman: In connection with the work that the Judicial Compensation Commission ("Commission") is doing pursuant to Chapter 86 of the Resolves of 2005, you have asked the following question: Does current Maine law allow the portability of service credit in the Maine Judicial Retirement System ("MJRS") for time spent as a legislator if the judge or justice made payments to the Maine Legislative Retirement System ("MLRS") during that legislative service? After your written opinion request was made, we received a copy of a letter to you from Judge Charles LaVerdiere, raising the issue of whether legislation to permit such portability of service credits would be subject to the requirement of Me. Const. Art. IX, § 18-A ("Section 18-A") that unfunded liabilities cannot be created in the Maine State Retirement System ("MSRS"). Lock Kiermaier asked, on behalf of the Commission, that we address this second question as well. These questions have never been answered by a Maine court. Based on the analysis provided below, we believe that a court reviewing the issue would likely conclude that legislative service credits cannot be counted toward creditable service under the MJRS in the absence of an express statutory provision. If legislation were to be enacted that permits past legislative service credits to be counted toward creditable service in the MJRS, a new liability would thereby be created in that system. However, the prohibition in Section 18-A against the creation of new unfunded liabilities applies by its terms only to the MSRS and does not appear to apply to the MJRS. This issue has never been addressed by a Maine court. While the prudent action would be to fund any such liability that is created, we cannot say with certainty that funding is constitutionally required.(fn1) Portability of Retirement Service Credit The MSRS provides retirement and ancillary benefits specified by statute to its members. Those members include state employees, teachers and members of participating local districts. 5 M.R.S.A. chapter 423, subchapter II (state employees and teachers) and chapter 425, subchapter II (participating local districts).(fn2) The term "state employee" is defined by § 17001(40), and generally includes both classified and unclassified employees of departments and agencies of state government (with certain particulars not relevant to the issues presented here). The definition specifically excludes the following:
A. A judge, as defined in Title 4, section 1201 or 1301, who is now or later may be entitled to retirement benefits under Title 4, chapter 27 or 29;
B. A member of the State Police who is now entitled to retirement benefits under Title 25, chapter 195; or
C. A Legislator who is now or later may be entitled to retirement benefits under Title 3, chapter 29.
5. M.R.S.A. § 17001(40). The MJRS was established by P.L. 1983, c. 853, pt. C, effective December 1, 1984. The persons who serve the MSRS as trustees, executive director, actuary and medical board are, by statute, authorized to serve the same role for the MJRS. See 4 M.R.S.A. §§ 1231(1), 1232, 1233, and 1234 (respectively). The trustees may combine funds of the two systems for investment purposes, but "the assets and funds of the Maine State Retirement System and the assets and funds of the Maine Judicial Retirement System shall not be combined for benefit payment purposes or administrative expenses." 4 M.R.S.A. § 1254. The MJRS is a separate corporation. 4 M.R.S.A. § 1202. The MLRS was established by P.L. 1985, c. 507, effective September 19, 1985, and made membership mandatory for most legislators by December 3, 1986. The structure of the MJRS was repeated in the MLRS statute, with the MSRS board, executive director, actuary and medical board serving the same role for the MLRS. See 3 M.R.S.A. §§ 731, 732, 733, 734 and 735. Again, the statutes authorize combining the funds of the MLRS and MSRS for investment purposes but not for benefit payment purposes or administrative expenses, and the MLRS is a separate corporation. See 3 M.R.S.A. §§ 754 and 702. To accommodate the transfer of employees covered by one of the state retirement systems to another, various statutory provisions specify how service earned and contributions made under one system are treated when an employee moves to a job covered by another. The concept of "portability" of retirement service credits as it applies to...

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