According to the Brunswick Times Record, the move will reduce the early retirement penalty for some teachers and state employees from 6% to 3%, allowing those with at least 25 years of experience to retire before the age of 62 and receive more of their pension. Legislators only restored the benefit to those employed when the original benefit was in place, and did not change the existing benefit for those hired after the 1993 cut.
Money for the benefits restoration is being borrowed from the Maine Public Employees Retirement System, and will have to be paid back with interest, the Times Record said. Additional money will be set aside each year from the state’s general fund to cover the costs of the restored benefit.
The retirement benefits were cut for state employees and teachers to balance the budget in 1993 under former Governor John McKernan. The change affected workers who had less than 10 years on the job as of July 1, 1993, and created two tiers of employees, with different retirement ages, different penalties for early retirement, and different waiting periods for cost-of-living increases after retirement.
There are just more than 12,000 people in the state retirement system currently who lost benefits then.
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