Rhode Island 2023 Regular Session

Rhode Island House Bill H5240 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3
4	4
5	5	2023 -- H 5240
6	6	========
7	7	LC000735
8	8	========
9	9	S TATE OF RHODE IS LAND
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO EDUCATION -- TEACHERS' RETIREMENT
16	16	Introduced By: Representatives McEntee, Caldwell, Fogarty, Serpa, Phillips, Casimiro,
17	17	O'Brien, Bennett, Edwards, and Morales
18	18	Date Introduced: January 25, 2023
19	19	Referred To: House Finance
20	20
21	21
22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Section 16-16-40 of the General Laws in Chapter 16-16 entitled "Teachers’ 1
24	24	Retirement [See Title 16 Chapter 97 — The Rhode Island Board of Education Act]" is hereby 2
25	25	amended to read as follows: 3
26	26	16-16-40. Additional benefits payable to retired teachers. 4
27	27	(a) All teachers and all beneficiaries of teachers receiving any service retirement or 5
28	28	ordinary or accidental disability retirement allowance pursuant to the provisions of this chapter and 6
29	29	chapter 17 of this title, on or before December 31, 1967, shall receive a cost of living retirement 7
30	30	adjustment equal to one and one-half percent (1.5%) per year of the original retirement allowance, 8
31	31	not compounded, for each year the retirement allowance has been in effect. For purposes of 9
32	32	computation credit shall be given for a full calendar year regardless of the effective date of the 10
33	33	retirement allowance. This cost of living retirement adjustment shall be added to the amount of the 11
34	34	service retirement allowance as of January 1, 1970, and payment shall begin as of July 1, 1970. An 12
35	35	additional cost of living retirement adjustment shall be added to the original retirement allowance 13
36	36	equal to three percent (3%) of the original retirement allowance on the first day of January, 1971, 14
37	37	and each year thereafter through December 31, 1980. 15
38	38	(b) All teachers and beneficiaries of teachers receiving any service retirement or ordinary 16
39	39	disability retirement allowance pursuant to the provisions of this title who retired on or after January 17
40	40	1, 1968, shall, on the first day of January, next following the third (3rd) year on retirement, receive 18
41	41	a cost of living adjustment, in addition to his or her retirement allowance, an amount equal to three 19
42	42
43	43
44	44	LC000735 - Page 2 of 16
45	45	percent (3%) of the original retirement allowance. In each succeeding year thereafter, on the first 1
46	46	day of January, the retirement allowance shall be increased an additional three percent (3%) of the 2
47	47	original retirement allowance, not compounded, to be continued through December 31, 1980. 3
48	48	(c)(1) Beginning on January 1, 1981, for all teachers and beneficiaries of teachers receiving 4
49	49	any service retirement and all teachers and all beneficiaries of teachers who have completed at least 5
50	50	ten (10) years of contributory service on or before July 1, 2005, pursuant to the provisions of this 6
51	51	chapter, and for all teachers and beneficiaries of teachers who receive a disability retirement 7
52	52	allowance pursuant to §§ 16-16-14 — 16-16-17, the cost of living adjustment shall be computed 8
53	53	and paid at the rate of three percent (3%) of the original retirement allowance or the retirement 9
54	54	allowance as computed in accordance with § 16-16-40.1, compounded annually from the year for 10
55	55	which the cost of living adjustment was determined to be payable by the retirement board pursuant 11
56	56	to the provisions of subsection (a) or (b) of this section. Such cost of living adjustments are available 12
57	57	to teachers who retire before October 1, 2009, or are eligible to retire as of September 30, 2009. 13
58	58	(2) The provisions of this subsection shall be deemed to apply prospectively only and no 14
59	59	retroactive payment shall be made. 15
60	60	(3) The retirement allowance of all teachers and all beneficiaries of teachers who have not 16
61	61	completed at least ten (10) years of contributory service on or before July 1, 2005, or were not 17
62	62	eligible to retire as of September 30, 2009, shall, on the month following the third anniversary date 18
63	63	of the retirement, and on the month following the anniversary date of each succeeding year be 19
64	64	adjusted and computed by multiplying the retirement allowance by three percent (3%) or the 20
65	65	percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published 21
66	66	by the United States Department of Labor Statistics, determined as of September 30 of the prior 22
67	67	calendar year, whichever is less; the cost of living adjustment shall be compounded annually from 23
68	68	the year for which the cost of living adjustment was determined payable by the retirement board; 24
69	69	provided, that no adjustment shall cause any retirement allowance to be decreased from the 25
70	70	retirement allowance provided immediately before such adjustment. 26
71	71	(d) For teachers not eligible to retire in accordance with this chapter as of September 30, 27
72	72	2009, and not eligible upon passage of this article, and for their beneficiaries, the cost of living 28
73	73	adjustment described in subsection (3) above shall only apply to the first thirty-five thousand 29
74	74	dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon the third 30
75	75	(3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65), whichever 31
76	76	is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage 32
77	77	increase in the Consumer Price Index for all Urban Consumer (CPI-U) as published by the United 33
78	78	States Department of Labor Statistics determined as of September 30 of the prior calendar year or 34
79	79
80	80
81	81	LC000735 - Page 3 of 16
82	82	three percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, 1
83	83	of retirement allowance shall be multiplied by the percentage of increase in the Consumer Price 2
84	84	Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor 3
85	85	Statistics determined as of September 30 of the prior calendar year or three percent (3%), whichever 4
86	86	is less, on the month following the anniversary date of each succeeding year. For teachers eligible 5
87	87	to retire as of September 30, 2009, or eligible upon passage of this article, and for their 6
88	88	beneficiaries, the provisions of this subsection (d) shall not apply. 7
89	89	(e) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 8
90	90	(f) This subsection (f) shall be effective for the period July 1, 2012, through June 30, 2015. 9
91	91	(1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (f)(2) 10
92	92	below, for all present and former teachers, active and retired teachers, and beneficiaries receiving 11
93	93	any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment 12
94	94	provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) 13
95	95	is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the 14
96	96	“subtrahend”) from the Five-Year Average Investment Return of the retirement system determined 15
97	97	as of the last day of the plan year preceding the calendar year in which the adjustment is granted, 16
98	98	said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) 17
99	99	is equal to the lesser of the teacher’s retirement allowance or the first twenty-five thousand dollars 18
100	100	($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) amount to be 19
101	101	indexed annually in the same percentage as determined under paragraph (f)(1)(A) above. The 20
102	102	“Five-Year Average Investment Return” shall mean the average of the investment returns of the 21
103	103	most recent five (5) plan years as determined by the retirement board. Subject to paragraph (f)(2) 22
104	104	below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd) 23
105	105	anniversary of the date of retirement or the date on which the retiree reaches his or her Social 24
106	106	Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 25
107	107	assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 26
108	108	either upward or downward in the same amount. 27
109	109	(2) Except as provided in paragraph (f)(3), the benefit adjustments under this section for 28
110	110	any plan year shall be suspended in their entirety unless the Funded Ratio of the Employees’ 29
111	111	Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 30
112	112	Retirement Benefits Trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 31
113	113	percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan 32
114	114	year. 33
115	115	In determining whether a funding level under this paragraph (f)(2) has been achieved, the 34
116	116
117	117
118	118	LC000735 - Page 4 of 16
119	119	actuary shall calculate the funding percentage after taking into account the reinstatement of any 1
120	120	current or future benefit adjustment provided under this section. 2
121	121	(3) Notwithstanding paragraph (f)(2), in each fifth plan year commencing after June 30, 3
122	122	2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 4
123	123	plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (f)(1) 5
124	124	above until the Funded Ratio of the Employees’ Retirement System of Rhode Island, the Judicial 6
125	125	Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by the 7
126	126	system’s actuary on an aggregate basis, exceeds eighty percent (80%). 8
127	127	(4) Notwithstanding any other provisions of this chapter, the provisions of this paragraph 9
128	128	(f) of § 16-16-40 shall become effective July 1, 2012, and shall apply to any benefit adjustments 10
129	129	not granted on or prior to June 30, 2012. 11
130	130	(g) This subsection (g) shall become effective July 1, 2015. 12
131	131	(1)(A) As soon as administratively reasonable following the enactment into law of this 13
132	132	subsection (g)(1)(A), a one-time benefit adjustment shall be provided to teachers and/or 14
133	133	beneficiaries of teachers who retired on or before June 30, 2012, in the amount of two percent (2%) 15
134	134	of the lesser of either the teacher’s retirement allowance or the first twenty-five thousand dollars 16
135	135	($25,000) of the teacher’s retirement allowance. This one-time benefit adjustment shall be provided 17
136	136	without regard to the retiree’s age or number of years since retirement. 18
137	137	(B) Notwithstanding the prior subsections of this section, for all present and former 19
138	138	teachers, active and retired teachers, and beneficiaries receiving any retirement, disability or death 20
139	139	allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year under 21
140	140	this section for adjustments on and after January 1, 2016, and subject to subsection (g)(2) below, 22
141	141	shall be equal to (I) multiplied by (II): 23
142	142	(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 24
143	143	(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 25
144	144	(the “subtrahend”) from the five-year average investment return of the retirement system 26
145	145	determined as of the last day of the plan year preceding the calendar year in which the adjustment 27
146	146	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 28
147	147	(0%). The “five-year average investment return” shall mean the average of the investment returns 29
148	148	of the most recent five (5) plan years as determined by the retirement board. In the event the 30
149	149	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 31
150	150	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 32
151	151	(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 33
152	152	Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 34
153	153
154	154
155	155	LC000735 - Page 5 of 16
156	156	Statistics determined as of September 30 of the prior calendar year. 1
157	157	In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less 2
158	158	than (0%) percent. 3
159	159	(II) is equal to the lesser of either the teacher’s retirement allowance or the first twenty-4
160	160	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 5
161	161	to be indexed annually in the same percentage as determined under subsection (g)(1)(B)(I) above. 6
162	162	The benefit adjustments provided by this subsection (g)(1)(B) shall be provided to all 7
163	163	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 8
164	164	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 9
165	165	date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 10
166	166	whichever is later. 11
167	167	(2) Except as provided in subsection (g)(3), the The benefit adjustments under subsection 12
168	168	(g)(1)(B) for any plan year shall be suspended in their entirety reduced to twenty-five percent (25%) 13
169	169	of the benefit adjustment unless the funded ratio of the employees’ retirement system of Rhode 14
170	170	Island, the judicial retirement benefits trust and the state police retirement benefits trust, calculated 15
171	171	by the system’s actuary on an aggregate basis, exceeds eighty percent (80%) in which event the 16
172	172	benefit adjustment will be reinstated for all teachers for such plan year. 17
173	173	In determining whether a funding level under this subsection (g)(2) has been achieved, the 18
174	174	actuary shall calculate the funding percentage after taking into account the reinstatement of any 19
175	175	current or future benefit adjustment provided under this section. 20
176	176	(3) Notwithstanding subsection (g)(2), in each fourth plan year commencing after June 30, 21
177	177	2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 22
178	178	plan years: (i) A benefit adjustment shall be calculated and made in accordance with subsection 23
179	179	(g)(1)(B) above; and (ii) Effective for teachers and/or beneficiaries of teachers who retired on or 24
180	180	before June 30, 2015, the dollar amount in subsection (g)(1)(B)(II) of twenty-five thousand eight 25
181	181	hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 26
182	182	dollars ($31,026)until the funded ratio of the employees’ retirement system of Rhode Island, the 27
183	183	judicial retirement benefits trust and the state police retirement benefits trust, calculated by the 28
184	184	system’s actuary on an aggregate basis, exceeds eighty percent (80%). 29
185	185	(4) Effective for teachers and or beneficiaries of teachers who have retired on or before 30
186	186	July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 31
187	187	days following the enactment of the legislation implementing this provision, and a second one-time 32
188	188	stipend of five hundred dollars ($500) in the same month of the following year. These stipends 33
189	189	shall be payable to all retired teachers or beneficiaries receiving a benefit as of the applicable 34
190	190
191	191
192	192	LC000735 - Page 6 of 16
193	193	payment date and shall not be considered cost of living adjustments under the prior provisions of 1
194	194	this § 16-16-40. 2
195	195	SECTION 2. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement 3
196	196	System — Contributions and Benefits" is hereby amended to read as follows: 4
197	197	36-10-35. Additional benefits payable to retired employees. 5
198	198	(a) All state employees and all beneficiaries of state employees receiving any service 6
199	199	retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of 7
200	200	this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal 8
201	201	to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, 9
202	202	for each calendar year the retirement allowance has been in effect. For the purposes of computation, 10
203	203	credit shall be given for a full calendar year regardless of the effective date of the retirement 11
204	204	allowance. This cost of living adjustment shall be added to the amount of the retirement allowance 12
205	205	as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the 13
206	206	original retirement allowance in each succeeding year during the month of January, and provided 14
207	207	further, that this additional cost of living increase shall be three percent (3%) for the year beginning 15
208	208	January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the 16
209	209	above provisions, no employee receiving any service retirement allowance pursuant to the 17
210	210	provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive 18
211	211	any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over 19
212	212	the service retirement allowance where the employee retired prior to January 1, 1958. 20
213	213	(b) All state employees and all beneficiaries of state employees retired on or after January 21
214	214	1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement 22
215	215	allowance pursuant to the provisions of this title shall, on the first day of January next following 23
216	216	the third anniversary date of the retirement, receive a cost of living retirement adjustment, in 24
217	217	addition to his or her retirement allowance, in an amount equal to three percent (3%) of the original 25
218	218	retirement allowance. In each succeeding year thereafter through December 31, 1980, during the 26
219	219	month of January, the retirement allowance shall be increased an additional three percent (3%) of 27
220	220	the original retirement allowance, not compounded, to be continued during the lifetime of the 28
221	221	employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar 29
222	222	year regardless of the effective date of the service retirement allowance. 30
223	223	(c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state 31
224	224	employees receiving any service retirement and all state employees, and all beneficiaries of state 32
225	225	employees, who have completed at least ten (10) years of contributory service on or before July 1, 33
226	226	2005, pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries 34
227	227
228	228
229	229	LC000735 - Page 7 of 16
230	230	of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36-1
231	231	10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of 2
232	232	the original retirement allowance or the retirement allowance as computed in accordance with § 3
233	233	36-10-35.1, compounded annually from the year for which the cost of living adjustment was 4
234	234	determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) 5
235	235	of this section. Such cost of living adjustments are available to members who retire before October 6
236	236	1, 2009, or are eligible to retire as of September 30, 2009. 7
237	237	(2) The provisions of this subsection shall be deemed to apply prospectively only and no 8
238	238	retroactive payment shall be made. 9
239	239	(3) The retirement allowance of all state employees and all beneficiaries of state employees 10
240	240	who have not completed at least ten (10) years of contributory service on or before July 1, 2005, or 11
241	241	were not eligible to retire as of September 30, 2009, shall, on the month following the third 12
242	242	anniversary date of retirement, and on the month following the anniversary date of each succeeding 13
243	243	year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or 14
244	244	the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as 15
245	245	published by the United States Department of Labor Statistics determined as of September 30 of 16
246	246	the prior calendar year, whichever is less; the cost of living adjustment shall be compounded 17
247	247	annually from the year for which the cost of living adjustment was determined payable by the 18
248	248	retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased 19
249	249	from the retirement allowance provided immediately before such adjustment. 20
250	250	(d) For state employees not eligible to retire in accordance with this chapter as of 21
251	251	September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the 22
252	252	cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first 23
253	253	thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall 24
254	254	commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches 25
255	255	age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase 26
256	256	annually by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-27
257	257	U) as published by the United States Department of Labor Statistics determined as of September 28
258	258	30 of the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand 29
259	259	dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of 30
260	260	increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United 31
261	261	States Department of Labor Statistics determined as of September 30 of the prior calendar year or 32
262	262	three percent (3%), whichever is less, on the month following the anniversary date of each 33
263	263	succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon 34
264	264
265	265
266	266	LC000735 - Page 8 of 16
267	267	passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not 1
268	268	apply. 2
269	269	(e) All legislators and all beneficiaries of legislators who are receiving a retirement 3
270	270	allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall, 4
271	271	commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a 5
272	272	retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. 6
273	273	In each succeeding year thereafter during the month of January, the retirement allowance shall be 7
274	274	increased an additional three percent (3%) of the original retirement allowance, compounded 8
275	275	annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of 9
276	276	computation, credit shall be given for a full calendar year regardless of the effective date of the 10
277	277	service retirement allowance. 11
278	278	(f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 12
279	279	(g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015. 13
280	280	(1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (g)(2) 14
281	281	below, for all present and former employees, active and retired members, and beneficiaries 15
282	282	receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit 16
283	283	adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) 17
284	284	where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 18
285	285	(the “subtrahend”) from the Five-Year Average Investment Return of the retirement system 19
286	286	determined as of the last day of the plan year preceding the calendar year in which the adjustment 20
287	287	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 21
288	288	(0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five 22
289	289	thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) 23
290	290	amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The 24
291	291	“Five-Year Average Investment Return” shall mean the average of the investment returns of the 25
292	292	most recent five (5) plan years as determined by the retirement board. Subject to paragraph (g)(2) 26
293	293	below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd) 27
294	294	anniversary of the date of retirement or the date on which the retiree reaches his or her Social 28
295	295	Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 29
296	296	assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 30
297	297	either upward or downward in the same amount. 31
298	298	(2) Except as provided in paragraph (g)(3), the benefit adjustments under this section for 32
299	299	any plan year shall be suspended in their entirety unless the Funded Ratio of the Employees’ 33
300	300	Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 34
301	301
302	302
303	303	LC000735 - Page 9 of 16
304	304	Retirement Benefits Trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 1
305	305	percent (80%) in which event the benefit adjustment will be reinstated for all members for such 2
306	306	plan year. 3
307	307	In determining whether a funding level under this paragraph (g)(2) has been achieved, the 4
308	308	actuary shall calculate the funding percentage after taking into account the reinstatement of any 5
309	309	current or future benefit adjustment provided under this section. 6
310	310	(3) Notwithstanding paragraph (g)(2), in each fifth plan year commencing after June 30, 7
311	311	2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 8
312	312	plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (g)(1) 9
313	313	above until the Funded Ratio of the Employees’ Retirement System of Rhode Island, the Judicial 10
314	314	Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by the 11
315	315	system’s actuary on an aggregate basis, exceeds eighty percent (80%). 12
316	316	(4) Notwithstanding any other provision of this chapter, the provisions of this paragraph 13
317	317	(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or 14
318	318	prior to June 30, 2012. 15
319	319	(h) This subsection (h) shall become effective July 1, 2015. 16
320	320	(1)(A) As soon as administratively reasonable following the enactment into law of this 17
321	321	subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or 18
322	322	beneficiaries of members who retired on or before June 30, 2012, in the amount of 2% of the lesser 19
323	323	of either the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 20
324	324	the member’s retirement allowance. This one-time benefit adjustment shall be provided without 21
325	325	regard to the retiree’s age or number of years since retirement. 22
326	326	(B) Notwithstanding the prior subsections of this section, for all present and former 23
327	327	employees, active and retired members, and beneficiaries receiving any retirement, disability or 24
328	328	death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 25
329	329	under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2) 26
330	330	below, shall be equal to (I) multiplied by (II): 27
331	331	(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 28
332	332	(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 29
333	333	(the “subtrahend”) from the five-year average investment return of the retirement system 30
334	334	determined as of the last day of the plan year preceding the calendar year in which the adjustment 31
335	335	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 32
336	336	(0%). The “five-year average investment return” shall mean the average of the investment returns 33
337	337	of the most recent five (5) plan years as determined by the retirement board. In the event the 34
338	338
339	339
340	340	LC000735 - Page 10 of 16
341	341	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 1
342	342	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 2
343	343	(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 3
344	344	Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 4
345	345	Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) 5
346	346	plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%). 6
347	347	(II) Is equal to the lesser of either the member’s retirement allowance or the first twenty-7
348	348	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 8
349	349	to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above. 9
350	350	The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all 10
351	351	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 11
352	352	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 12
353	353	date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 13
354	354	whichever is later. 14
355	355	(2) Except as provided in subsection (h)(3) of this section, the The benefit adjustments 15
356	356	under subsection (h)(1)(B) for any plan year shall be suspended in their entirety reduced to twenty-16
357	357	five percent (25%) of the benefit adjustment unless the funded ratio of the employees’ retirement 17
358	358	system of Rhode Island, the judicial retirement benefits trust and the state police retirement benefits 18
359	359	trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty percent (80%) in 19
360	360	which event the benefit adjustment will be reinstated for all members for such plan year. 20
361	361	In determining whether a funding level under this subsection (h)(2) has been achieved, the 21
362	362	actuary shall calculate the funding percentage after taking into account the reinstatement of any 22
363	363	current or future benefit adjustment provided under this section. 23
364	364	(3) Notwithstanding subsection (h)(2), in each fourth plan year commencing after June 30, 24
365	365	2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 25
366	366	plan years: 26
367	367	(i) A benefit adjustment shall be calculated and made in accordance with subsection 27
368	368	(h)(1)(B) above; and 28
369	369	(ii) Effective for members and/or beneficiaries of members who retired on or before June 29
370	370	30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand eight hundred and 30
371	371	fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six dollars 31
372	372	($31,026) until the funded ratio of the employees’ retirement system of Rhode Island, the judicial 32
373	373	retirement benefits trust and the state police retirement benefits trust, calculated by the system’s 33
374	374	actuary on an aggregate basis, exceeds eighty percent (80%). 34
375	375
376	376
377	377	LC000735 - Page 11 of 16
378	378	(i) Effective for members and/or beneficiaries of members who have retired on or before 1
379	379	July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 2
380	380	days following the enactment of the legislation implementing this provision, and a second one-time 3
381	381	stipend of five hundred dollars ($500) in the same month of the following year. These stipends 4
382	382	shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 5
383	383	payment date and shall not be considered cost of living adjustments under the prior provisions of 6
384	384	this section. 7
385	385	SECTION 3. Section 45-21-52 of the General Laws in Chapter 45-21 entitled "Retirement 8
386	386	of Municipal Employees" is hereby amended to read as follows: 9
387	387	45-21-52. Automatic increase in service retirement allowance. 10
388	388	(a) The local legislative bodies of the cities and towns may extend to their respective 11
389	389	employees automatic adjustment increases in their service retirement allowances, by a resolution 12
390	390	accepting any of the plans described in this section: 13
391	391	(1) Plan A. All employees and beneficiaries of those employees receiving a service 14
392	392	retirement or disability retirement allowance under the provisions of this chapter on December 31 15
393	393	of the year their city or town accepts this section, receive a cost of living adjustment equal to one 16
394	394	and one-half percent (1
395	395	1
396	396	/2%) per year of the original retirement allowance, not compounded, for 17
397	397	each calendar year the retirement allowance has been in effect. This cost of living adjustment is 18
398	398	added to the amount of the retirement allowance as of January 1 following acceptance of this 19
399	399	provision, and an additional one and one-half percent (1
400	400	1
401	401	/2%) is added to the original retirement 20
402	402	allowance in each succeeding year during the month of January, and provided, further, that this 21
403	403	additional cost of living increase is three percent (3%) for the year beginning January 1 of the year 22
404	404	the plan is accepted and each succeeding year. 23
405	405	(2) Plan B. All employees and beneficiaries of those employees receiving a retirement 24
406	406	allowance under the provisions of this chapter on December 31 of the year their municipality 25
407	407	accepts this section, receive a cost of living adjustment equal to three percent (3%) of their original 26
408	408	retirement allowance. This adjustment is added to the amount of the retirement allowance as of 27
409	409	January 1 following acceptance of this provision, and an additional three percent (3%) of the 28
410	410	original retirement allowance, not compounded, is payable in each succeeding year in the month 29
411	411	of January. 30
412	412	(3) Plan C. All employees and beneficiaries of those employees who retire on or after 31
413	413	January 1 of the year following acceptance of this section, on the first day of January next following 32
414	414	the date of the retirement, receive a cost of living adjustment in an amount equal to three percent 33
415	415	(3%) of the original retirement allowance. 34
416	416
417	417
418	418	LC000735 - Page 12 of 16
419	419	(b) In each succeeding year in the month of January, the retirement allowance is increased 1
420	420	an additional three percent (3%) of the original retirement allowance, not compounded. 2
421	421	(c) This subsection (c) shall be effective for the period July 1, 2012, through June 30, 2015. 3
422	422	(1) Notwithstanding any other paragraphs of this section, and subject to paragraph (c)(2) 4
423	423	below, for all present and former employees, active and retired members, and beneficiaries 5
424	424	receiving any retirement, disability or death allowance or benefit of any kind by reason of adoption 6
425	425	of this section by their employer, the annual benefit adjustment provided in any calendar year under 7
426	426	this section shall be equal to (A) multiplied by (B) where (A) is equal to the percentage determined 8
427	427	by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the Five-Year Average 9
428	428	Investment Return of the retirement system determined as of the last day of the plan year preceding 10
429	429	the calendar year in which the adjustment is granted, said percentage not to exceed four percent 11
430	430	(4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of the member’s 12
431	431	retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement allowance, 13
432	432	such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same percentage 14
433	433	as determined under (c)(1)(A) above. The “Five-Year Average Investment Return” shall mean the 15
434	434	average of the investment returns of the most recent five (5) plan years as determined by the 16
435	435	retirement board. Subject to paragraph (c)(2) below, the benefit adjustment provided by this 17
436	436	paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date on 18
437	437	which the retiree reaches his or her Social Security retirement age, whichever is later; or for 19
438	438	municipal police and fire retiring under the provisions of chapter 45-21.2, the benefit adjustment 20
439	439	provided by this paragraph shall commence on the later of the third (3rd) anniversary of the date of 21
440	440	retirement or the date on which the retiree reaches age fifty-five (55). In the event the retirement 22
441	441	board adjusts the actuarially assumed rate of return for the system, either upward or downward, the 23
442	442	subtrahend shall be adjusted either upward or downward in the same amount. 24
443	443	(2) Except as provided in paragraph (c)(3) the benefit adjustments provided under this 25
444	444	section for any plan year shall be suspended in their entirety reduced to twenty-five percent (25%) 26
445	445	of the benefit adjustment for each municipal plan within the municipal employees retirement 27
446	446	system unless the municipal plan is determined to be funded at a Funded Ratio equal to or greater 28
447	447	than eighty percent (80%) as of the end of the immediately preceding plan year in accordance with 29
448	448	the retirement system’s actuarial valuation report as prepared by the system’s actuary, in which 30
449	449	event the benefit adjustment will be reinstated for all members for such plan year. 31
450	450	In determining whether a funding level under this paragraph (c)(2) has been achieved, the 32
451	451	actuary shall calculate the funding percentage after taking into account the reinstatement of any 33
452	452	current or future benefit adjustment provided under this section. 34
453	453
454	454
455	455	LC000735 - Page 13 of 16
456	456	(3) Notwithstanding paragraph (c)(2), for each municipal plan that has a Funded Ratio of 1
457	457	less than eighty percent (80%) as of June 30, 2012, in each fifth plan year commencing after June 2
458	458	30, 2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of 3
459	459	five (5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph 4
460	460	(c)(1) above until the municipal plan’s Funded Ratio exceeds eighty percent (80%). 5
461	461	(d) This subsection (d) shall become effective July 1, 2015. 6
462	462	(1)(A) As soon as administratively reasonable following the enactment into law of this 7
463	463	subsection (d)(1)(A), a one-time benefit adjustment shall be provided to members and/or 8
464	464	beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent 9
465	465	(2%) of the lesser of either the employee’s retirement allowance or the first twenty-five thousand 10
466	466	dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be 11
467	467	provided without regard to the retiree’s age or number of years since retirement. 12
468	468	(B) Notwithstanding the prior subsections of this section, for all present and former 13
469	469	employees, active and retired employees, and beneficiaries receiving any retirement, disability or 14
470	470	death allowance or benefit of any kind by reason of adoption of this section by their employer, the 15
471	471	annual benefit adjustment provided in any calendar year under this section for adjustments on and 16
472	472	after January 1, 2016, and subject to paragraph (d)(2) below, shall be equal to (I) multiplied by (II): 17
473	473	(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 18
474	474	(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 19
475	475	(the “subtrahend”) from the five-year average investment return of the retirement system 20
476	476	determined as of the last day of the plan year preceding the calendar year in which the adjustment 21
477	477	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 22
478	478	(0%). The “five-year average investment return” shall mean the average of the investment returns 23
479	479	of the most recent five (5) plan years as determined by the retirement board. In the event the 24
480	480	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 25
481	481	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 26
482	482	(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 27
483	483	Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 28
484	484	Statistics determined as of September 30 of the prior calendar year. 29
485	485	In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less 30
486	486	than zero percent (0%). 31
487	487	(II) Is equal to the lesser of either the member’s retirement allowance or the first twenty-32
488	488	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 33
489	489	to be indexed annually in the same percentage as determined under subsection (d)(1)(B)(I) above. 34
490	490
491	491
492	492	LC000735 - Page 14 of 16
493	493	The benefit adjustments provided by this subsection (d)(1)(B) shall be provided to all 1
494	494	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 2
495	495	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 3
496	496	date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 4
497	497	whichever is later; or for municipal police and fire retiring under the provisions of § 45-21.2-5
498	498	5(b)(1)(A), the benefit adjustment provided by this paragraph shall commence on the later of the 6
499	499	third anniversary of the date of retirement or the date on which the retiree reaches age fifty-five 7
500	500	(55); or for municipal police and fire retiring under the provisions of § 45-21.2-5(b)(1)(B), the 8
501	501	benefit adjustment provided by this paragraph shall commence on the later of the third anniversary 9
502	502	of the date of retirement or the date on which the retiree reaches age fifty (50). 10
503	503	(2) Except as provided in subsection (d)(3), the The benefit adjustments under subsection 11
504	504	(d)(1)(B) for any plan year shall be suspended in their entirety reduced to twenty-five percent (25%) 12
505	505	of the benefit adjustment for each municipal plan within the municipal employees retirement 13
506	506	system unless the municipal plan is determined to be funded at a funded ratio equal to or greater 14
507	507	than eighty percent (80%) as of the end of the immediately preceding plan year in accordance with 15
508	508	the retirement system’s actuarial valuation report as prepared by the system’s actuary, in which 16
509	509	event the benefit adjustment will be reinstated for all members for such plan year. 17
510	510	In determining whether a funding level under this subsection (d)(2) has been achieved, the 18
511	511	actuary shall calculate the funding percentage after taking into account the reinstatement of any 19
512	512	current or future benefit adjustment provided under this section. 20
513	513	(3) Notwithstanding subsection (d)(2), in each fourth plan year commencing after June 30, 21
514	514	2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 22
515	515	plan years: (i) A benefit adjustment shall be calculated and made in accordance with subsection 23
516	516	(d)(1)(B) above; and (ii) Effective for members and/or beneficiaries of members who retired on or 24
517	517	before June 30, 2015, the dollar amount in subsection (d)(1)(B)(II) of twenty-five thousand eight 25
518	518	hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 26
519	519	dollars ($31,026) until the municipal plan’s funded ratio exceeds eighty percent (80%). 27
520	520	(e) Upon acceptance of any of the plans in this section, each employee shall on January 1 28
521	521	next succeeding the acceptance, contribute by means of salary deductions, pursuant to § 45-21-41, 29
522	522	one percent (1%) of the employee’s compensation concurrently with and in addition to 30
523	523	contributions otherwise being made to the retirement system. 31
524	524	(f) The city or town shall make any additional contributions to the system, pursuant to the 32
525	525	terms of § 45-21-42, for the payment of any benefits provided by this section. 33
526	526	(g) The East Greenwich town council shall be allowed to accept Plan C of subsection (a)(3) 34
527	527
528	528
529	529	LC000735 - Page 15 of 16
530	530	of this section for all employees of the town of East Greenwich who either, pursuant to contract 1
531	531	negotiations, bargain for Plan C, or who are non-union employees who are provided with Plan C 2
532	532	and who shall all collectively be referred to as the “Municipal-COLA Group” and shall be separate 3
533	533	from all other employees of the town and school department, union or non-union, who are in the 4
534	534	same pension group but have not been granted Plan C benefits. Upon acceptance by the town 5
535	535	council, benefits in accordance with this section shall be available to all such employees who retire 6
536	536	on or after January 1, 2003. 7
537	537	(h) Effective for members and/or beneficiaries of members who have retired on or before 8
538	538	July 1, 2015, and without regard to whether the retired member or beneficiary is receiving a benefit 9
539	539	adjustment under this section, a one-time stipend of five hundred dollars ($500) shall be payable 10
540	540	within sixty (60) days following the enactment of the legislation implementing this provision, and 11
541	541	a second one-time stipend of five hundred dollars ($500) in the same month of the following year. 12
542	542	These stipends shall not be considered cost of living adjustments under the prior provisions of this 13
543	543	section. 14
544	544	SECTION 4. This act shall take effect upon passage. 15
545	545	========
546	546	LC000735
547	547	========
548	548
549	549
550	550	LC000735 - Page 16 of 16
551	551	EXPLANATION
552	552	BY THE LEGISLATIVE COUNCIL
553	553	OF
554	554	A N A C T
555	555	RELATING TO EDUCATION -- TEACHERS' RETIREMENT
556	556	***
557	557	This act would provide that the current COLA suspension schedule would be replaced with 1
558	558	a fractional annual COLA of twenty-five percent (25%) of the COLA declared for that plan year, 2
559	559	as it pertains to retired teachers, state and municipal employees. 3
560	560	This act would take effect upon passage. 4
561	561	========
562	562	LC000735
563	563	========