2023 -- H 6006
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LC002423
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S TATE OF RHODE IS LAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
____________
A N A C T
RELATING TO EDUCATION -- TEACHERS' RETIREMENT
Introduced By: Representatives O'Brien, Casey, Kazarian, Casimiro, McEntee, Craven,
Caldwell, Dawson, Serpa, and Bennett
Date Introduced: March 01, 2023
Referred To: House Finance
(General Treasurer)
It is enacted by the General Assembly as follows:
SECTION 1. Section 16-16-40 of the General Laws in Chapter 16-16 entitled "Teachers’ 1
Retirement [See Title 16 Chapter 97 — The Rhode Island Board of Education Act]" is hereby 2
amended to read as follows: 3
16-16-40. Additional benefits payable to retired teachers. 4
(a) All teachers and all beneficiaries of teachers receiving any service retirement or 5
ordinary or accidental disability retirement allowance pursuant to the provisions of this chapter and 6
chapter 17 of this title, on or before December 31, 1967, shall receive a cost of living retirement 7
adjustment equal to one and one-half percent (1.5%) per year of the original retirement allowance, 8
not compounded, for each year the retirement allowance has been in effect. For purposes of 9
computation credit shall be given for a full calendar year regardless of the effective date of the 10
retirement allowance. This cost of living retirement adjustment shall be added to the amount of the 11
service retirement allowance as of January 1, 1970, and payment shall begin as of July 1, 1970. An 12
additional cost of living retirement adjustment shall be added to the original retirement allowance 13
equal to three percent (3%) of the original retirement allowance on the first day of January, 1971, 14
and each year thereafter through December 31, 1980. 15
(b) All teachers and beneficiaries of teachers receiving any service retirement or ordinary 16
disability retirement allowance pursuant to the provisions of this title who retired on or after January 17
1, 1968, shall, on the first day of January, next following the third (3rd) year on retirement, receive 18
a cost of living adjustment, in addition to his or her retirement allowance, an amount equal to three 19
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percent (3%) of the original retirement allowance. In each succeeding year thereafter, on the first 1
day of January, the retirement allowance shall be increased an additional three percent (3%) of the 2
original retirement allowance, not compounded, to be continued through December 31, 1980. 3
(c)(1) Beginning on January 1, 1981, for all teachers and beneficiaries of teachers receiving 4
any service retirement and all teachers and all beneficiaries of teachers who have completed at least 5
ten (10) years of contributory service on or before July 1, 2005, pursuant to the provisions of this 6
chapter, and for all teachers and beneficiaries of teachers who receive a disability retirement 7
allowance pursuant to §§ 16-16-14 — 16-16-17, the cost of living adjustment shall be computed 8
and paid at the rate of three percent (3%) of the original retirement allowance or the retirement 9
allowance as computed in accordance with § 16-16-40.1, compounded annually from the year for 10
which the cost of living adjustment was determined to be payable by the retirement board pursuant 11
to the provisions of subsection (a) or (b) of this section. Such cost of living adjustments are available 12
to teachers who retire before October 1, 2009, or are eligible to retire as of September 30, 2009. 13
(2) The provisions of this subsection shall be deemed to apply prospectively only and no 14
retroactive payment shall be made. 15
(3) The retirement allowance of all teachers and all beneficiaries of teachers who have not 16
completed at least ten (10) years of contributory service on or before July 1, 2005, or were not 17
eligible to retire as of September 30, 2009, shall, on the month following the third anniversary date 18
of the retirement, and on the month following the anniversary date of each succeeding year be 19
adjusted and computed by multiplying the retirement allowance by three percent (3%) or the 20
percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published 21
by the United States Department of Labor Statistics, determined as of September 30 of the prior 22
calendar year, whichever is less; the cost of living adjustment shall be compounded annually from 23
the year for which the cost of living adjustment was determined payable by the retirement board; 24
provided, that no adjustment shall cause any retirement allowance to be decreased from the 25
retirement allowance provided immediately before such adjustment. 26
(d) For teachers not eligible to retire in accordance with this chapter as of September 30, 27
2009, and not eligible upon passage of this article, and for their beneficiaries, the cost of living 28
adjustment described in subsection (3) above shall only apply to the first thirty-five thousand 29
dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon the third 30
(3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65), whichever 31
is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage 32
increase in the Consumer Price Index for all Urban Consumer (CPI-U) as published by the United 33
States Department of Labor Statistics determined as of September 30 of the prior calendar year or 34
LC002423 - Page 3 of 17
three percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, 1
of retirement allowance shall be multiplied by the percentage of increase in the Consumer Price 2
Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor 3
Statistics determined as of September 30 of the prior calendar year or three percent (3%), whichever 4
is less, on the month following the anniversary date of each succeeding year. For teachers eligible 5
to retire as of September 30, 2009, or eligible upon passage of this article, and for their 6
beneficiaries, the provisions of this subsection (d) shall not apply. 7
(e) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 8
(f) This subsection (f) shall be effective for the period July 1, 2012, through June 30, 2015. 9
(1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (f)(2) 10
below, for all present and former teachers, active and retired teachers, and beneficiaries receiving 11
any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment 12
provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) 13
is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the 14
“subtrahend”) from the Five-Year Average Investment Return of the retirement system determined 15
as of the last day of the plan year preceding the calendar year in which the adjustment is granted, 16
said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) 17
is equal to the lesser of the teacher’s retirement allowance or the first twenty-five thousand dollars 18
($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) amount to be 19
indexed annually in the same percentage as determined under paragraph (f)(1)(A) above. The 20
“Five-Year Average Investment Return” shall mean the average of the investment returns of the 21
most recent five (5) plan years as determined by the retirement board. Subject to paragraph (f)(2) 22
below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd) 23
anniversary of the date of retirement or the date on which the retiree reaches his or her Social 24
Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 25
assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 26
either upward or downward in the same amount. 27
(2) Except as provided in paragraph (f)(3), the benefit adjustments under this section for 28
any plan year shall be suspended in their entirety unless the Funded Ratio of the Employees’ 29
Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 30
Retirement Benefits Trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 31
percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan 32
year. 33
In determining whether a funding level under this paragraph (f)(2) has been achieved, the 34
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actuary shall calculate the funding percentage after taking into account the reinstatement of any 1
current or future benefit adjustment provided under this section. 2
(3) Notwithstanding paragraph (f)(2), in each fifth plan year commencing after June 30, 3
2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 4
plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (f)(1) 5
above until the Funded Ratio of the Employees’ Retirement System of Rhode Island, the Judicial 6
Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by the 7
system’s actuary on an aggregate basis, exceeds eighty percent (80%). 8
(4) Notwithstanding any other provisions of this chapter, the provisions of this paragraph 9
(f) of § 16-16-40 shall become effective July 1, 2012, and shall apply to any benefit adjustments 10
not granted on or prior to June 30, 2012. 11
(g) This subsection (g) shall become effective July 1, 2015. 12
(1)(A) As soon as administratively reasonable following the enactment into law of this 13
subsection (g)(1)(A), a one-time benefit adjustment shall be provided to teachers and/or 14
beneficiaries of teachers who retired on or before June 30, 2012, in the amount of two percent (2%) 15
of the lesser of either the teacher’s retirement allowance or the first twenty-five thousand dollars 16
($25,000) of the teacher’s retirement allowance. This one-time benefit adjustment shall be provided 17
without regard to the retiree’s age or number of years since retirement. 18
(B) Notwithstanding the prior subsections of this section, for all present and former 19
teachers, active and retired teachers, and beneficiaries receiving any retirement, disability or death 20
allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year under 21
this section for adjustments on and after January 1, 2016, and subject to subsection (g)(2) below, 22
shall be equal to (I) multiplied by (II): 23
(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 24
(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 25
(the “subtrahend”) from the five-year average investment return of the retirement system 26
determined as of the last day of the plan year preceding the calendar year in which the adjustment 27
is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 28
(0%). The “five-year average investment return” shall mean the average of the investment returns 29
of the most recent five (5) plan years as determined by the retirement board. In the event the 30
retirement board adjusts the actuarially assumed rate of return for the system, either upward or 31
downward, the subtrahend shall be adjusted either upward or downward in the same amount. 32
(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 33
Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 34
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Statistics determined as of September 30 of the prior calendar year. 1
In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less 2
than (0%) percent. 3
(II) is equal to the lesser of either the teacher’s retirement allowance or the first twenty-4
five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 5
to be indexed annually in the same percentage as determined under subsection (g)(1)(B)(I) above. 6
The benefit adjustments provided by this subsection (g)(1)(B) shall be provided to all 7
retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 8
and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 9
date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 10
whichever is later. 11
(2) Except as provided in subsection (g)(3), the benefit adjustments under subsection 12
(g)(1)(B) for any plan year shall be suspended in their entirety unless the funded ratio of the 13
employees’ retirement system of Rhode Island, the judicial retirement benefits trust and the state 14
police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds 15
eighty percent (80%) in which event the benefit adjustment will be reinstated for all teachers for 16
such plan year. 17
In determining whether a funding level under this subsection (g)(2) has been achieved, the 18
actuary shall calculate the funding percentage after taking into account the reinstatement of any 19
current or future benefit adjustment provided under this section. 20
(3) Notwithstanding subsection (g)(2), in each fourth plan year commencing after June 30, 21
2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 22
plan years: (i) A benefit adjustment shall be calculated and made in accordance with subsection 23
(g)(1)(B) above; and (ii) Effective for teachers and/or beneficiaries of teachers who retired on or 24
before June 30, 2015, the dollar amount in subsection (g)(1)(B)(II) of twenty-five thousand eight 25
hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 26
dollars ($31,026)until the funded ratio of the employees’ retirement system of Rhode Island, the 27
judicial retirement benefits trust and the state police retirement benefits trust, calculated by the 28
system’s actuary on an aggregate basis, exceeds eighty percent (80%). 29
(4) Effective for teachers and or beneficiaries of teachers who have retired on or before 30
July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 31
days following the enactment of the legislation implementing this provision, and a second one-time 32
stipend of five hundred dollars ($500) in the same month of the following year. These stipends 33
shall be payable to all retired teachers or beneficiaries receiving a benefit as of the applicable 34
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payment date and shall not be considered cost of living adjustments under the prior provisions of 1
this § 16-16-40. 2
(h) An additional one-time allowance shall be paid to eligible members of the retirement 3
system, or any beneficiary of such member, in accordance with the provisions of this subsection. 4
(1) Effective for eligible members and/or beneficiaries of members a one-time allowance 5
of five hundred dollars ($500). 6
(2) For purposes of this subsection an "eligible member" is a retired member of the 7
retirement system, or any beneficiary of such member, that has retired on or before July 1, 2022. 8
(3) The allowances provided under this subsection shall be payable as soon as 9
administratively reasonable following the effective date of this subsection. 10
(4) The allowances provided under this subsection shall be payable to eligible members or 11
beneficiaries receiving a benefit as of the payment date and shall not be considered cost of living 12
adjustments under the prior provisions of this section. 13
(5) The provisions of this subsection shall be paid from the state's general fund, subject to 14
an appropriation by the general assembly. 15
SECTION 2. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement 16
System — Contributions and Benefits" is hereby amended to read as follows: 17
36-10-35. Additional benefits payable to retired employees. 18
(a) All state employees and all beneficiaries of state employees receiving any service 19
retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of 20
this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal 21
to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, 22
for each calendar year the retirement allowance has been in effect. For the purposes of computation, 23
credit shall be given for a full calendar year regardless of the effective date of the retirement 24
allowance. This cost of living adjustment shall be added to the amount of the retirement allowance 25
as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the 26
original retirement allowance in each succeeding year during the month of January, and provided 27
further, that this additional cost of living increase shall be three percent (3%) for the year beginning 28
January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the 29
above provisions, no employee receiving any service retirement allowance pursuant to the 30
provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive 31
any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over 32
the service retirement allowance where the employee retired prior to January 1, 1958. 33
(b) All state employees and all beneficiaries of state employees retired on or after January 34
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1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement 1
allowance pursuant to the provisions of this title shall, on the first day of January next following 2
the third anniversary date of the retirement, receive a cost of living retirement adjustment, in 3
addition to his or her retirement allowance, in an amount equal to three percent (3%) of the original 4
retirement allowance. In each succeeding year thereafter through December 31, 1980, during the 5
month of January, the retirement allowance shall be increased an additional three percent (3%) of 6
the original retirement allowance, not compounded, to be continued during the lifetime of the 7
employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar 8
year regardless of the effective date of the service retirement allowance. 9
(c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state 10
employees receiving any service retirement and all state employees, and all beneficiaries of state 11
employees, who have completed at least ten (10) years of contributory service on or before July 1, 12
2005, pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries 13
of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36-14
10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of 15
the original retirement allowance or the retirement allowance as computed in accordance with § 16
36-10-35.1, compounded annually from the year for which the cost of living adjustment was 17
determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) 18
of this section. Such cost of living adjustments are available to members who retire before October 19
1, 2009, or are eligible to retire as of September 30, 2009. 20
(2) The provisions of this subsection shall be deemed to apply prospectively only and no 21
retroactive payment shall be made. 22
(3) The retirement allowance of all state employees and all beneficiaries of state employees 23
who have not completed at least ten (10) years of contributory service on or before July 1, 2005, or 24
were not eligible to retire as of September 30, 2009, shall, on the month following the third 25
anniversary date of retirement, and on the month following the anniversary date of each succeeding 26
year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or 27
the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as 28
published by the United States Department of Labor Statistics determined as of September 30 of 29
the prior calendar year, whichever is less; the cost of living adjustment shall be compounded 30
annually from the year for which the cost of living adjustment was determined payable by the 31
retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased 32
from the retirement allowance provided immediately before such adjustment. 33
(d) For state employees not eligible to retire in accordance with this chapter as of 34
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September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the 1
cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first 2
thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall 3
commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches 4
age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase 5
annually by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-6
U) as published by the United States Department of Labor Statistics determined as of September 7
30 of the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand 8
dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of 9
increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United 10
States Department of Labor Statistics determined as of September 30 of the prior calendar year or 11
three percent (3%), whichever is less, on the month following the anniversary date of each 12
succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon 13
passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not 14
apply. 15
(e) All legislators and all beneficiaries of legislators who are receiving a retirement 16
allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall, 17
commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a 18
retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. 19
In each succeeding year thereafter during the month of January, the retirement allowance shall be 20
increased an additional three percent (3%) of the original retirement allowance, compounded 21
annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of 22
computation, credit shall be given for a full calendar year regardless of the effective date of the 23
service retirement allowance. 24
(f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 25
(g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015. 26
(1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (g)(2) 27
below, for all present and former employees, active and retired members, and beneficiaries 28
receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit 29
adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) 30
where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 31
(the “subtrahend”) from the Five-Year Average Investment Return of the retirement system 32
determined as of the last day of the plan year preceding the calendar year in which the adjustment 33
is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 34
LC002423 - Page 9 of 17
(0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five 1
thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) 2
amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The 3
“Five-Year Average Investment Return” shall mean the average of the investment returns of the 4
most recent five (5) plan years as determined by the retirement board. Subject to paragraph (g)(2) 5
below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd) 6
anniversary of the date of retirement or the date on which the retiree reaches his or her Social 7
Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 8
assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 9
either upward or downward in the same amount. 10
(2) Except as provided in paragraph (g)(3), the benefit adjustments under this section for 11
any plan year shall be suspended in their entirety unless the Funded Ratio of the Employees’ 12
Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 13
Retirement Benefits Trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 14
percent (80%) in which event the benefit adjustment will be reinstated for all members for such 15
plan year. 16
In determining whether a funding level under this paragraph (g)(2) has been achieved, the 17
actuary shall calculate the funding percentage after taking into account the reinstatement of any 18
current or future benefit adjustment provided under this section. 19
(3) Notwithstanding paragraph (g)(2), in each fifth plan year commencing after June 30, 20
2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 21
plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (g)(1) 22
above until the Funded Ratio of the Employees’ Retirement System of Rhode Island, the Judicial 23
Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by the 24
system’s actuary on an aggregate basis, exceeds eighty percent (80%). 25
(4) Notwithstanding any other provision of this chapter, the provisions of this paragraph 26
(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or 27
prior to June 30, 2012. 28
(h) This subsection (h) shall become effective July 1, 2015. 29
(1)(A) As soon as administratively reasonable following the enactment into law of this 30
subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or 31
beneficiaries of members who retired on or before June 30, 2012, in the amount of 2% of the lesser 32
of either the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 33
the member’s retirement allowance. This one-time benefit adjustment shall be provided without 34
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regard to the retiree’s age or number of years since retirement. 1
(B) Notwithstanding the prior subsections of this section, for all present and former 2
employees, active and retired members, and beneficiaries receiving any retirement, disability or 3
death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 4
under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2) 5
below, shall be equal to (I) multiplied by (II): 6
(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 7
(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 8
(the “subtrahend”) from the five-year average investment return of the retirement system 9
determined as of the last day of the plan year preceding the calendar year in which the adjustment 10
is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 11
(0%). The “five-year average investment return” shall mean the average of the investment returns 12
of the most recent five (5) plan years as determined by the retirement board. In the event the 13
retirement board adjusts the actuarially assumed rate of return for the system, either upward or 14
downward, the subtrahend shall be adjusted either upward or downward in the same amount. 15
(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 16
Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 17
Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) 18
plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%). 19
(II) Is equal to the lesser of either the member’s retirement allowance or the first twenty-20
five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 21
to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above. 22
The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all 23
retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 24
and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 25
date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 26
whichever is later. 27
(2) Except as provided in subsection (h)(3) of this section, the benefit adjustments under 28
subsection (h)(1)(B) for any plan year shall be suspended in their entirety unless the funded ratio 29
of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust and the 30
state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, 31
exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 32
members for such plan year. 33
In determining whether a funding level under this subsection (h)(2) has been achieved, the 34
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actuary shall calculate the funding percentage after taking into account the reinstatement of any 1
current or future benefit adjustment provided under this section. 2
(3) Notwithstanding subsection (h)(2), in each fourth plan year commencing after June 30, 3
2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 4
plan years: 5
(i) A benefit adjustment shall be calculated and made in accordance with subsection 6
(h)(1)(B) above; and 7
(ii) Effective for members and/or beneficiaries of members who retired on or before June 8
30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand eight hundred and 9
fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six dollars 10
($31,026) until the funded ratio of the employees’ retirement system of Rhode Island, the judicial 11
retirement benefits trust and the state police retirement benefits trust, calculated by the system’s 12
actuary on an aggregate basis, exceeds eighty percent (80%). 13
(i) Effective for members and/or beneficiaries of members who have retired on or before 14
July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 15
days following the enactment of the legislation implementing this provision, and a second one-time 16
stipend of five hundred dollars ($500) in the same month of the following year. These stipends 17
shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 18
payment date and shall not be considered cost of living adjustments under the prior provisions of 19
this section. 20
(j) An additional one-time allowance shall be paid to eligible members of the retirement 21
system, or any beneficiary of such member, in accordance with the provisions of this subsection. 22
(1) Effective for eligible members and/or beneficiaries of members a one-time allowance 23
of five hundred dollars ($500). 24
(2) For purposes of this subsection an "eligible member" is a retired member of the 25
retirement system, or any beneficiary of such member, that has retired on or before July 1, 2022. 26
(3) The allowances provided under this subsection shall be payable as soon as 27
administratively reasonable following the effective date of this subsection. 28
(4) The allowances provided under this subsection shall be payable to eligible members or 29
beneficiaries receiving a benefit as of the payment date and shall not be considered cost of living 30
adjustments under the prior provisions of this section. 31
(5) The provisions of this subsection shall be paid from the state's general fund, subject to 32
an appropriation by the general assembly. 33
SECTION 3. Section 45-21-52 of the General Laws in Chapter 45-21 entitled "Retirement 34
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of Municipal Employees" is hereby amended to read as follows: 1
45-21-52. Automatic increase in service retirement allowance. 2
(a) The local legislative bodies of the cities and towns may extend to their respective 3
employees automatic adjustment increases in their service retirement allowances, by a resolution 4
accepting any of the plans described in this section: 5
(1) Plan A. All employees and beneficiaries of those employees receiving a service 6
retirement or disability retirement allowance under the provisions of this chapter on December 31 7
of the year their city or town accepts this section, receive a cost of living adjustment equal to one 8
and one-half percent (1
1
/2%) per year of the original retirement allowance, not compounded, for 9
each calendar year the retirement allowance has been in effect. This cost of living adjustment is 10
added to the amount of the retirement allowance as of January 1 following acceptance of this 11
provision, and an additional one and one-half percent (1
1
/2%) is added to the original retirement 12
allowance in each succeeding year during the month of January, and provided, further, that this 13
additional cost of living increase is three percent (3%) for the year beginning January 1 of the year 14
the plan is accepted and each succeeding year. 15
(2) Plan B. All employees and beneficiaries of those employees receiving a retirement 16
allowance under the provisions of this chapter on December 31 of the year their municipality 17
accepts this section, receive a cost of living adjustment equal to three percent (3%) of their original 18
retirement allowance. This adjustment is added to the amount of the retirement allowance as of 19
January 1 following acceptance of this provision, and an additional three percent (3%) of the 20
original retirement allowance, not compounded, is payable in each succeeding year in the month 21
of January. 22
(3) Plan C. All employees and beneficiaries of those employees who retire on or after 23
January 1 of the year following acceptance of this section, on the first day of January next following 24
the date of the retirement, receive a cost of living adjustment in an amount equal to three percent 25
(3%) of the original retirement allowance. 26
(b) In each succeeding year in the month of January, the retirement allowance is increased 27
an additional three percent (3%) of the original retirement allowance, not compounded. 28
(c) This subsection (c) shall be effective for the period July 1, 2012, through June 30, 2015. 29
(1) Notwithstanding any other paragraphs of this section, and subject to paragraph (c)(2) 30
below, for all present and former employees, active and retired members, and beneficiaries 31
receiving any retirement, disability or death allowance or benefit of any kind by reason of adoption 32
of this section by their employer, the annual benefit adjustment provided in any calendar year under 33
this section shall be equal to (A) multiplied by (B) where (A) is equal to the percentage determined 34
LC002423 - Page 13 of 17
by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the Five-Year Average 1
Investment Return of the retirement system determined as of the last day of the plan year preceding 2
the calendar year in which the adjustment is granted, said percentage not to exceed four percent 3
(4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of the member’s 4
retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement allowance, 5
such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same percentage 6
as determined under (c)(1)(A) above. The “Five-Year Average Investment Return” shall mean the 7
average of the investment returns of the most recent five (5) plan years as determined by the 8
retirement board. Subject to paragraph (c)(2) below, the benefit adjustment provided by this 9
paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date on 10
which the retiree reaches his or her Social Security retirement age, whichever is later; or for 11
municipal police and fire retiring under the provisions of chapter 45-21.2, the benefit adjustment 12
provided by this paragraph shall commence on the later of the third (3rd) anniversary of the date of 13
retirement or the date on which the retiree reaches age fifty-five (55). In the event the retirement 14
board adjusts the actuarially assumed rate of return for the system, either upward or downward, the 15
subtrahend shall be adjusted either upward or downward in the same amount. 16
(2) Except as provided in paragraph (c)(3) the benefit adjustments provided under this 17
section for any plan year shall be suspended in their entirety for each municipal plan within the 18
municipal employees retirement system unless the municipal plan is determined to be funded at a 19
Funded Ratio equal to or greater than eighty percent (80%) as of the end of the immediately 20
preceding plan year in accordance with the retirement system’s actuarial valuation report as 21
prepared by the system’s actuary, in which event the benefit adjustment will be reinstated for all 22
members for such plan year. 23
In determining whether a funding level under this paragraph (c)(2) has been achieved, the 24
actuary shall calculate the funding percentage after taking into account the reinstatement of any 25
current or future benefit adjustment provided under this section. 26
(3) Notwithstanding paragraph (c)(2), for each municipal plan that has a Funded Ratio of 27
less than eighty percent (80%) as of June 30, 2012, in each fifth plan year commencing after June 28
30, 2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of 29
five (5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph 30
(c)(1) above until the municipal plan’s Funded Ratio exceeds eighty percent (80%). 31
(d) This subsection (d) shall become effective July 1, 2015. 32
(1)(A) As soon as administratively reasonable following the enactment into law of this 33
subsection (d)(1)(A), a one-time benefit adjustment shall be provided to members and/or 34
LC002423 - Page 14 of 17
beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent 1
(2%) of the lesser of either the employee’s retirement allowance or the first twenty-five thousand 2
dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be 3
provided without regard to the retiree’s age or number of years since retirement. 4
(B) Notwithstanding the prior subsections of this section, for all present and former 5
employees, active and retired employees, and beneficiaries receiving any retirement, disability or 6
death allowance or benefit of any kind by reason of adoption of this section by their employer, the 7
annual benefit adjustment provided in any calendar year under this section for adjustments on and 8
after January 1, 2016, and subject to paragraph (d)(2) below, shall be equal to (I) multiplied by (II): 9
(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 10
(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 11
(the “subtrahend”) from the five-year average investment return of the retirement system 12
determined as of the last day of the plan year preceding the calendar year in which the adjustment 13
is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 14
(0%). The “five-year average investment return” shall mean the average of the investment returns 15
of the most recent five (5) plan years as determined by the retirement board. In the event the 16
retirement board adjusts the actuarially assumed rate of return for the system, either upward or 17
downward, the subtrahend shall be adjusted either upward or downward in the same amount. 18
(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 19
Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 20
Statistics determined as of September 30 of the prior calendar year. 21
In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less 22
than zero percent (0%). 23
(II) Is equal to the lesser of either the member’s retirement allowance or the first twenty-24
five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 25
to be indexed annually in the same percentage as determined under subsection (d)(1)(B)(I) above. 26
The benefit adjustments provided by this subsection (d)(1)(B) shall be provided to all 27
retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 28
and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 29
date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 30
whichever is later; or for municipal police and fire retiring under the provisions of § 45-21.2-31
5(b)(1)(A), the benefit adjustment provided by this paragraph shall commence on the later of the 32
third anniversary of the date of retirement or the date on which the retiree reaches age fifty-five 33
(55); or for municipal police and fire retiring under the provisions of § 45-21.2-5(b)(1)(B), the 34
LC002423 - Page 15 of 17
benefit adjustment provided by this paragraph shall commence on the later of the third anniversary 1
of the date of retirement or the date on which the retiree reaches age fifty (50). 2
(2) Except as provided in subsection (d)(3), the benefit adjustments under subsection 3
(d)(1)(B) for any plan year shall be suspended in their entirety for each municipal plan within the 4
municipal employees retirement system unless the municipal plan is determined to be funded at a 5
funded ratio equal to or greater than eighty percent (80%) as of the end of the immediately 6
preceding plan year in accordance with the retirement system’s actuarial valuation report as 7
prepared by the system’s actuary, in which event the benefit adjustment will be reinstated for all 8
members for such plan year. 9
In determining whether a funding level under this subsection (d)(2) has been achieved, the 10
actuary shall calculate the funding percentage after taking into account the reinstatement of any 11
current or future benefit adjustment provided under this section. 12
(3) Notwithstanding subsection (d)(2), in each fourth plan year commencing after June 30, 13
2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 14
plan years: (i) A benefit adjustment shall be calculated and made in accordance with subsection 15
(d)(1)(B) above; and (ii) Effective for members and/or beneficiaries of members who retired on or 16
before June 30, 2015, the dollar amount in subsection (d)(1)(B)(II) of twenty-five thousand eight 17
hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 18
dollars ($31,026) until the municipal plan’s funded ratio exceeds eighty percent (80%). 19
(e) Upon acceptance of any of the plans in this section, each employee shall on January 1 20
next succeeding the acceptance, contribute by means of salary deductions, pursuant to § 45-21-41, 21
one percent (1%) of the employee’s compensation concurrently with and in addition to 22
contributions otherwise being made to the retirement system. 23
(f) The city or town shall make any additional contributions to the system, pursuant to the 24
terms of § 45-21-42, for the payment of any benefits provided by this section. 25
(g) The East Greenwich town council shall be allowed to accept Plan C of subsection (a)(3) 26
of this section for all employees of the town of East Greenwich who either, pursuant to contract 27
negotiations, bargain for Plan C, or who are non-union employees who are provided with Plan C 28
and who shall all collectively be referred to as the “Municipal-COLA Group” and shall be separate 29
from all other employees of the town and school department, union or non-union, who are in the 30
same pension group but have not been granted Plan C benefits. Upon acceptance by the town 31
council, benefits in accordance with this section shall be available to all such employees who retire 32
on or after January 1, 2003. 33
(h) Effective for members and/or beneficiaries of members who have retired on or before 34
LC002423 - Page 16 of 17
July 1, 2015, and without regard to whether the retired member or beneficiary is receiving a benefit 1
adjustment under this section, a one-time stipend of five hundred dollars ($500) shall be payable 2
within sixty (60) days following the enactment of the legislation implementing this provision, and 3
a second one-time stipend of five hundred dollars ($500) in the same month of the following year. 4
These stipends shall not be considered cost of living adjustments under the prior provisions of this 5
section. 6
(i) An additional one-time allowance shall be paid to eligible members of the retirement 7
system, or any beneficiary of such member, in accordance with the provisions of this subsection. 8
(1) Effective for eligible members and/or beneficiaries of members a one-time allowance 9
of five hundred dollars ($500). 10
(2) For purposes of this subsection an "eligible member" is a retired member of the 11
retirement system, or any beneficiary of such member, that has retired on or before July 1, 2022. 12
(3) The allowances provided under this subsection shall be payable as soon as 13
administratively reasonable following the effective date of this subsection. 14
(4) The allowances provided under this subsection shall be payable to eligible members or 15
beneficiaries receiving a benefit as of the payment date and shall not be considered cost of living 16
adjustments under the prior provisions of this section. 17
(5) The provisions of this subsection shall be paid from the state's general fund, subject to 18
an appropriation by the general assembly. 19
SECTION 4. This act shall take effect upon passage. 20
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LC002423
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LC002423 - Page 17 of 17
EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO EDUCATION -- TEACHERS' RETIREMENT
***
This act would provide a one-time allowance of five hundred dollars ($500) for eligible 1
members of the employees' retirement system of Rhode Island. 2
This act would take effect upon passage. 3
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LC002423
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