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Maine Question 4, Public Pension Unfunded Liabilities from Experience Losses Amendment (2017)
| Maine Question 4 | |
|---|---|
 | |
| Election date November 7, 2017 | |
| Topic Pension | |
Status Approved | |
| Type Constitutional amendment | Origin State legislature |
| 2017 measures |
|---|
 |
| June 13, 2017 |
| Maine Question 1 |
| November 7, 2017 |
| Maine Question 1 |
| Maine Question 2 |
| Maine Question 4 |
| Maine Question 3 |
Maine Question 4, the Public Pension Unfunded Liabilities from Experience Losses Amendment, was on the ballot in Maine as a legislatively referred constitutional amendment on November 7, 2017. It was approved.[1]
| A "yes" vote supported this amendment to increase from 10 years to 20 years the time required for the state to pay off the Maine Public Employees Retirement System's (MainePERS) unfunded liabilities created by experience losses (i.e., losses resulting from the difference between expected performance and the actual outcome in investments). |
| A "no" vote opposed this amendment to increase from 10 years to 20 years the time required for the state to pay off MainePERS's unfunded liabilities created by experience losses. |
Election results
| Question 4 | ||||
|---|---|---|---|---|
| Result | Votes | Percentage | ||
| Yes | 208,924 | 63.03% | ||
| No | 122,545 | 36.97% | ||
- Election results from Maine Secretary of State
Text of measure
Ballot title
The ballot title was follows:[1]
| “ | Do you favor amending the Constitution of Maine to reduce volatility in state pension funding requirements caused by the financial markets by increasing the length of time over which experience losses are amortized from 10 years to 20 years, in line with pension industry standards?[2] | ” |
Constitutional changes
- See also: Article IX, Maine Constitution
The measure amended Section 18-A of Article IX of the Maine Constitution. The following underlined text was added, and struck-through text was deleted:[1]
Beginning with the fiscal year starting July 1, 1997, the normal cost of all retirement and ancillary benefits provided to participants under the Maine State Public Employees Retirement System must be funded annually on an actuarially sound basis. Unfunded liabilities may not be created except those resulting from experience losses. Unfunded liability resulting from experience losses must be retired over a period not exceeding 10 20 years.[2]
Readability score
- See also: Ballot measure readability scores, 2017
| Using the Flesch-Kincaid Grade Level (FKGL and Flesch Reading Ease (FRE) formulas, Ballotpedia scored the readability of the ballot title and summary for this measure. Readability scores are designed to indicate the reading difficulty of text. The Flesch-Kincaid formulas account for the number of words, syllables, and sentences in a text; they do not account for the difficulty of the ideas in the text. The Maine State Legislature wrote the ballot language for this measure.
|
Support
Supporters
Officials
The Maine Public Employees Retirement System (MainePERS) requested sponsorship for the constitutional amendment.[3] The following state legislators sponsored the amendment:[4]
- Sen. Roger Katz (R-15)
- Sen. Cathy Breen (D-25)
- Sen. Andre Cushing (R-10)
- Sen. Rodney Whittemore (R-3)
- Rep. Aaron Frey (D-124)
- Rep. Andrew Gattine (D-34)
- Rep. Brian Hubbell (D-135)
- Rep. Matthew Pouliot (R-86)
The following state legislator also supported the amendment:
- Rep. Tom Winsor (R-71)[5]
Arguments
Sandra J. Matheson, Executive Director of the Maine Public Employees Retirement System (MainePERS), said:[3]
| “ | The financial impact of this change is two-fold. The first is that annual contributions are lower when experience losses occur because they are being recovered over twenty years instead of ten. The second is that the total cost of recovering losses increases because it is being recovered over a longer period of time. One of the closest examples to understand why this occurs is to think of changing a 15-year mortgage to a 30-year mortgage. You pay greater costs over time in exchange for a lower monthly payment.[2] | ” |
Rep. Tom Winsor (R-71) and Rep. Aaron Frey (D-124), in an opinion article for the Bangor Daily News, said:[5]
| “ | Question 4 is a follow-up to a similar constitutional amendment Maine voters approved in 1995 to shore up the retirement system. Back then, voters required any investment losses incurred by the system to be paid back within 10 years. At the time, that payback period made sense. The retirement system was only 28 percent funded, so paying back any losses within a decade was achievable without substantially impacting Maine’s two-year state budgets.
Today, the retirement system is 80 percent funded, which makes it among the best-funded retirement systems in our nation. Yet, the system is at risk of becoming a victim of its own success. Consider the impact of the Great Recession. Practically everyone with 401(k) retirement accounts, mutual funds or stocks took big financial hits. The retirement system experienced similar losses. We all knew it would take a long time to recoup those losses. Yet, when it came to the retirement system’s losses, members of the Appropriations Committee had to figure out how to meet the 10-year payback requirement at a time of quickly declining state revenues. This led to difficult state budgeting decisions, including freezes and cuts to retiree pensions, that continue to reverberate today.[2] |
” |
Opposition
Ballotpedia has not identified any opponents of this measure. If you are aware of an article with opposing arguments or quoting opponents, please email it to editor@ballotpedia.org.
Campaign finance
| Total campaign contributions: | |
| Support: | $0.00 |
| Opposition: | $0.00 |
No ballot question committees registered to support or oppose the amendment.[6]
Media editorials
- See also: 2017 ballot measure media endorsements
Support
- Bangor Daily News said: "The math may be complicated, but a longer payback period sought in Question 4 will dampen big swings in what the state has to pay into the pension system from year to year. Passing Question 4 makes sense."[7]
- The Ellsworth American said: "The proposed amendment to the Constitution would spread that actuarial calculation over 20 years, reducing the need for any substantial increases in the state budget year to year. The Legislature overwhelmingly endorsed the proposed amendment to the Constitution with bipartisan votes in both the House and Senate. We recommend approval of Question 4 by the voters."[8]
- Kennebec Journal and Morning Sentinel (CentralMaine.com) said: "Instead of covering the impact of losses over 10 years, the state could spread the payments out over 20 years. That would lessen the shock to the state budget, and make it less likely that a future Legislature would have to renege on promises made to retired public-sector workers."[9]
Opposition
Ballotpedia did not find media editorials opposing the measure. If you are aware of an editorial, please email it to editor@ballotpedia.org.
Background
Maine Public Employees Retirement System (MainePERS)
- See also: Public pensions in Maine
The Maine Public Employees Retirement System (MainePERS) is the state's retirement system for public employees, including public school teachers, state and local government employees, legislators, and judges. MainePERS was established in 1942.[10]
In 2016, MainePERS had around 40,000 active members and 34,000 retired members. The system provided $728 million to retired members, with an average payment of about $21,000.[11]
The revenue that MainePERS provides to retired members comes from active member payroll deductions, allocations from the state General Fund, and income from investments.[11]
Path to the ballot
- See also: Amending the Maine Constitution
In Maine, the state legislature can refer constitutional amendments to the ballot for voter approval. A two-thirds vote is required in the state House of Representatives and state Senate.
Sen. Roger Katz (R-15) introduced the measure as Legislative Document 723 (LD 723) on February 28, 2017. The measure was referred to the Appropriations and Financial Affairs Committee, which recommended passage of the bill. On May 30, 2017, the Maine House of Representatives accepted the committee's Ought to Pass Report and voted to engross the bill. On May 31, the Maine Senate voted to engross the bill. On June 5, 2017, the state House gave final passage to the measure, with 122 voting in favor and four voting against. A roll call of individual members was not recorded.[11] Although the state Senate did not hold a final vote on LD 723 before adjourning on July 4, 2017, the chamber took the bill up during a meeting to consider the governor's vetoes, funding issues, and bills from the special appropriations table on July 20, 2017. The state Senate voted 31-0 to approve the amendment.[4] A roll call of individual votes was not available.[12]
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Related measures
| Pension measures on the ballot in 2017 | |
|---|---|
| State | Measures |
| New York | New York Proposal 2: Pension Forfeiture for Convicted Officials Amendment |
See also
External links
Recent news
The link below is to the most recent stories in a Google news search for the terms Maine 2017 Pension Liabilities Question 4. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.
Footnotes
- ↑ 1.0 1.1 1.2 Maine Legislature, "Legislative Document 723," accessed June 16, 2017
- ↑ 2.0 2.1 2.2 2.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source. Cite error: Invalid
<ref>tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid<ref>tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid<ref>tag; name "quotedisclaimer" defined multiple times with different content - ↑ 3.0 3.1 Maine Legislature, "Sandra J. Matheson Testimony," March 13, 2017
- ↑ 4.0 4.1 Maine Legislature, "LD 723 Overview," accessed June 16, 2017
- ↑ 5.0 5.1 Bangor Daily News, "Why Maine should support a constitutional amendment to stabilize public employee pensions," October 19, 2017
- ↑ Maine Commission of Governmental Ethics & Election Practices, "Ballot Question Committees," accessed July 24, 2017
- ↑ Bangor Daily News, "Yes on Question 4: Pension change will add stability to system, state budget," October 25, 2017
- ↑ The Ellsworth American, "Yes on Question 4," October 20, 2017
- ↑ CentralMaine.com, "Our View: Vote yes on Question 4 to back change to state pension," October 9, 2017
- ↑ Maine Public Employees Retirement System, "The Organization," accessed September 11, 2017
- ↑ 11.0 11.1 11.2 Bangor Daily News, "What Mainers need to know before voting on a proposed change to the state’s pension system," September 10, 2017
- ↑ Roll-calls for LD 723 Maine Legislature, "Roll-calls for LD 723," accessed October 6, 2017
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