An analysis released last month by the National Institute on Retirement Security highlighted six elements of stable retirement plans. Maine has addressed all six, said Sandy Matheson, executive director of the Maine Public Employees Retirement System.

Maine was not featured in the analysis, which looked at Delaware, Idaho, Illinois, New York, North Carolina and Texas. But a 1995 constitutional amendment in Maine, measures to control pension payouts, and recent changes by the retirement system board to adjust actuarial assumptions are all consistent with well-funded plans, she said.

The six elements identified by the institute are:

• Employer payments that cover the full amount of the annual required contribution. Maine’s constitutional amendment requires the state to come up with the money in every two-year budget.

• Employee contributions to share the cost. Employees pay 7.65 percent of their pay to Maine’s system.

• Benefit improvements that are properly funded when they are adopted. That is a requirement of Maine’s constitutional amendment.

• An automatic cost-of-living increase that is capped at a modest level. Maine lawmakers recently voted to reduce the cap from 4 percent to 3 percent.

• “Anti-spiking measures” to prevent large increases in benefits paid out. In some states, benefits can spike because of overtime or big increases in pay in the last few years of employment. Maine has measures to prevent that, Matheson said.

• Reasonable economic assumptions that can be achieved over the long term. The Maine retirement system’s board recently revised its assumed rate of investment return from 7.75 percent to 7.25 percent. It also lowered the inflation rate from 4.75 percent to 3.5 percent.

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