SUMMARY: This Chapter sets forth the method by which interest is to be computed for crediting member accounts and for charging members who make payments or repayments for past creditable service time.

SECTION 1. INTEREST CREDITED TO MEMBERS' ACCOUNTS

Interest will be credited to individual member accounts from the date that the member contributions are received by the System at the rate of regular interest established from time to time by the Board of Trustees. Whenever member contributions are not received by the Maine State Retirement System payroll filing deadline established by Chapter 201, interest will be credited to the members' accounts as of the date of the payroll filing deadline.

SECTION 2. DEFINITIONS

1. "Year" shall mean as follows:

A. Calendar year for State employees and employees of participating local districts; and

B. School contract year for teachers or State employees employed as teachers.

SECTION 3. INTEREST CHARGED FOR PAYMENTS OR REPAYMENTS FOR CREDITABLE SERVICE TIME

1. Determination of amount of interest due.

Interest will be charged at the rate established by the Board of Trustees from time to time and the amount of interest due will be determined as follows.

A. Withdrawn contributions: interest is charged on the amount of the withdrawn accumulated contributions from the date of withdrawal to the date of repayment.

B. Back contributions: interest is charged on the amount of contributions due from the end of the year in which the contributions should have been made to the date of payment.

C. Military service contributions: interest is charged on the amount of contributions due from the date of attaining 15 years of creditable service to the date of payment. If the provision for the purchase of military service credit was unavailable to a PLD member at the time that 15 years of creditable service was attained, interest is charged from the date that the provision was first available to the date of payment.

D. Out-of-State Service: for member(s) who qualify to purchase service under §17754(1) or §18354(1), interest is charged on the amount of contributions due from the end of the year when the contributions would have been made if the service had been in the State to the date of payment.

E. Service in Private, parochial and other schools: for member(s) who qualify to purchase service under §17763(1) or §18362(1), interest is charged on the amount of contributions due from the end of the year when those contributions would have been made if the service had been as a State employee or teacher in this State to the date of payment.

2. Crediting of Payments.

Payment for the purchase or repurchase of creditable service is credited to the members' accounts as of the date that the payment is received by the System. If payment is submitted through an increased rate of contribution through payroll deduction, and payment is not received by the Maine State Retirement System payroll filing deadline established by Chapter 201, the payment will be credited to the members' accounts as of the date of the payroll filing deadline.

SECTION 4. METHOD OF COMPUTATION OF INTEREST

When crediting interest to members' accounts and charging interest for the purchase or repurchase of service, interest is compounded monthly.

STATUTORY AUTHORITY⁵ MRSA, §§17703(3), 17704(3), 17705, 17713(2), 17751(1), 17754(1), 17763(1), 18304(3), 18305(3), 18306, 18311(2), 18351(1), 18354(1), 18362(1).

EFFECTIVE DATE:

October 14, 1986

EFFECTIVE DATE (ELECTRONIC CONVERSION):

May 5, 1996

NON-SUBSTANTIVE CORRECTIONS:

October 2, 1996 - minor spelling and format.

REPEALED AND REPLACED:

April 1, 2001 - also repeals Chapter 402, ' Interest Charges on Back Contributions'