Rhode Island 2023 Regular Session

Rhode Island House Bill H6207 Compare Versions

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

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5	5	2023 -- H 6207
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7	7	LC002624
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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 PUBLIC OFFICERS AND EMPLOYEES - RETIREMENT SYSTEM -
16	16	CONTRIBUTIONS AND BE NEFITS
17	17	Introduced By: Representatives O'Brien, Dawson, Caldwell, Craven, McEntee, Shanley,
18	18	Batista, Vella-Wilkinson, Perez, and Noret
19	19	Date Introduced: March 24, 2023
20	20	Referred To: House Finance
21	21
22	22
23	23	It is enacted by the General Assembly as follows:
24	24	SECTION 1. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement 1
25	25	System — Contributions and Benefits" is hereby amended to read as follows: 2
26	26	36-10-35. Additional benefits payable to retired employees. 3
27	27	(a) All state employees and all beneficiaries of state employees receiving any service 4
28	28	retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of 5
29	29	this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal 6
30	30	to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, 7
31	31	for each calendar year the retirement allowance has been in effect. For the purposes of computation, 8
32	32	credit shall be given for a full calendar year regardless of the effective date of the retirement 9
33	33	allowance. This cost of living adjustment shall be added to the amount of the retirement allowance 10
34	34	as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the 11
35	35	original retirement allowance in each succeeding year during the month of January, and provided 12
36	36	further, that this additional cost of living increase shall be three percent (3%) for the year beginning 13
37	37	January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the 14
38	38	above provisions, no employee receiving any service retirement allowance pursuant to the 15
39	39	provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive 16
40	40	any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over 17
41	41	the service retirement allowance where the employee retired prior to January 1, 1958. 18
42	42
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45	45	(b) All state employees and all beneficiaries of state employees retired on or after January 1
46	46	1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement 2
47	47	allowance pursuant to the provisions of this title shall, on the first day of January next following 3
48	48	the third anniversary date of the retirement, receive a cost of living retirement adjustment, in 4
49	49	addition to his or her retirement allowance, in an amount equal to three percent (3%) of the original 5
50	50	retirement allowance. In each succeeding year thereafter through December 31, 1980, during the 6
51	51	month of January, the retirement allowance shall be increased an additional three percent (3%) of 7
52	52	the original retirement allowance, not compounded, to be continued during the lifetime of the 8
53	53	employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar 9
54	54	year regardless of the effective date of the service retirement allowance. 10
55	55	(c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state 11
56	56	employees receiving any service retirement and all state employees, and all beneficiaries of state 12
57	57	employees, who have completed at least ten (10) years of contributory service on or before July 1, 13
58	58	2005, pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries 14
59	59	of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36-15
60	60	10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of 16
61	61	the original retirement allowance or the retirement allowance as computed in accordance with § 17
62	62	36-10-35.1, compounded annually from the year for which the cost of living adjustment was 18
63	63	determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) 19
64	64	of this section. Such cost of living adjustments are available to members who retire before October 20
65	65	1, 2009, or are eligible to retire as of September 30, 2009. 21
66	66	(2) The provisions of this subsection shall be deemed to apply prospectively only and no 22
67	67	retroactive payment shall be made. 23
68	68	(3) The retirement allowance of all state employees and all beneficiaries of state employees 24
69	69	who have not completed at least ten (10) years of contributory service on or before July 1, 2005, or 25
70	70	were not eligible to retire as of September 30, 2009, shall, on the month following the third 26
71	71	anniversary date of retirement, and on the month following the anniversary date of each succeeding 27
72	72	year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or 28
73	73	the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as 29
74	74	published by the United States Department of Labor Statistics determined as of September 30 of 30
75	75	the prior calendar year, whichever is less; the cost of living adjustment shall be compounded 31
76	76	annually from the year for which the cost of living adjustment was determined payable by the 32
77	77	retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased 33
78	78	from the retirement allowance provided immediately before such adjustment. 34
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82	82	(d) For state employees not eligible to retire in accordance with this chapter as of 1
83	83	September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the 2
84	84	cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first 3
85	85	thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall 4
86	86	commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches 5
87	87	age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase 6
88	88	annually by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-7
89	89	U) as published by the United States Department of Labor Statistics determined as of September 8
90	90	30 of the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand 9
91	91	dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of 10
92	92	increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United 11
93	93	States Department of Labor Statistics determined as of September 30 of the prior calendar year or 12
94	94	three percent (3%), whichever is less, on the month following the anniversary date of each 13
95	95	succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon 14
96	96	passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not 15
97	97	apply. 16
98	98	(e) All legislators and all beneficiaries of legislators who are receiving a retirement 17
99	99	allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall, 18
100	100	commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a 19
101	101	retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. 20
102	102	In each succeeding year thereafter during the month of January, the retirement allowance shall be 21
103	103	increased an additional three percent (3%) of the original retirement allowance, compounded 22
104	104	annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of 23
105	105	computation, credit shall be given for a full calendar year regardless of the effective date of the 24
106	106	service retirement allowance. 25
107	107	(f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 26
108	108	(g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015. 27
109	109	(1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (g)(2) 28
110	110	below, for all present and former employees, active and retired members, and beneficiaries 29
111	111	receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit 30
112	112	adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) 31
113	113	where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 32
114	114	(the “subtrahend”) from the Five-Year Average Investment Return of the retirement system 33
115	115	determined as of the last day of the plan year preceding the calendar year in which the adjustment 34
116	116
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119	119	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 1
120	120	(0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five 2
121	121	thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) 3
122	122	amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The 4
123	123	“Five-Year Average Investment Return” shall mean the average of the investment returns of the 5
124	124	most recent five (5) plan years as determined by the retirement board. Subject to paragraph (g)(2) 6
125	125	below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd) 7
126	126	anniversary of the date of retirement or the date on which the retiree reaches his or her Social 8
127	127	Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 9
128	128	assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 10
129	129	either upward or downward in the same amount. 11
130	130	(2) Except as provided in paragraph (g)(3), the benefit adjustments under this section for 12
131	131	any plan year shall be suspended in their entirety unless the Funded Ratio of the Employees’ 13
132	132	Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 14
133	133	Retirement Benefits Trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 15
134	134	percent (80%) in which event the benefit adjustment will be reinstated for all members for such 16
135	135	plan year. 17
136	136	In determining whether a funding level under this paragraph (g)(2) has been achieved, the 18
137	137	actuary shall calculate the funding percentage after taking into account the reinstatement of any 19
138	138	current or future benefit adjustment provided under this section. 20
139	139	(3) Notwithstanding paragraph (g)(2), in each fifth plan year commencing after June 30, 21
140	140	2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 22
141	141	plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (g)(1) 23
142	142	above until the Funded Ratio of the Employees’ Retirement System of Rhode Island, the Judicial 24
143	143	Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by the 25
144	144	system’s actuary on an aggregate basis, exceeds eighty percent (80%). 26
145	145	(4) Notwithstanding any other provision of this chapter, the provisions of this paragraph 27
146	146	(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or 28
147	147	prior to June 30, 2012. 29
148	148	(h) This subsection (h) shall become effective July 1, 2015. 30
149	149	(1)(A) As soon as administratively reasonable following the enactment into law of this 31
150	150	subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or 32
151	151	beneficiaries of members who retired on or before June 30, 2012, in the amount of 2% of the lesser 33
152	152	of either the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 34
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156	156	the member’s retirement allowance. This one-time benefit adjustment shall be provided without 1
157	157	regard to the retiree’s age or number of years since retirement. 2
158	158	(B) Notwithstanding the prior subsections of this section, for all present and former 3
159	159	employees, active and retired members, and beneficiaries receiving any retirement, disability or 4
160	160	death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 5
161	161	under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2) 6
162	162	below, shall be equal to (I) multiplied by (II): 7
163	163	(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 8
164	164	(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 9
165	165	(the “subtrahend”) from the five-year average investment return of the retirement system 10
166	166	determined as of the last day of the plan year preceding the calendar year in which the adjustment 11
167	167	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 12
168	168	(0%). The “five-year average investment return” shall mean the average of the investment returns 13
169	169	of the most recent five (5) plan years as determined by the retirement board. In the event the 14
170	170	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 15
171	171	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 16
172	172	(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 17
173	173	Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 18
174	174	Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) 19
175	175	plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%). 20
176	176	(II) Is equal to the lesser of either the member’s retirement allowance or the first twenty-21
177	177	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 22
178	178	to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above. 23
179	179	The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all 24
180	180	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 25
181	181	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 26
182	182	date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 27
183	183	whichever is later. 28
184	184	(2) Except as provided in subsection (h)(3) of this section, the benefit adjustments under 29
185	185	subsection (h)(1)(B) for any plan year shall be suspended in their entirety unless the funded ratio 30
186	186	of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust and the 31
187	187	state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, 32
188	188	exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 33
189	189	members for such plan year. 34
190	190
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193	193	In determining whether a funding level under this subsection (h)(2) has been achieved, the 1
194	194	actuary shall calculate the funding percentage after taking into account the reinstatement of any 2
195	195	current or future benefit adjustment provided under this section. 3
196	196	(3) Notwithstanding subsection (h)(2), in each fourth plan year commencing after June 30, 4
197	197	2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 5
198	198	plan years: 6
199	199	(i) A benefit adjustment shall be calculated and made in accordance with subsection 7
200	200	(h)(1)(B) above; and 8
201	201	(ii) Effective for members and/or beneficiaries of members who retired on or before June 9
202	202	30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand eight hundred and 10
203	203	fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six dollars 11
204	204	($31,026) until the funded ratio of the employees’ retirement system of Rhode Island, the judicial 12
205	205	retirement benefits trust and the state police retirement benefits trust, calculated by the system’s 13
206	206	actuary on an aggregate basis, exceeds eighty percent (80%). 14
207	207	(i) Effective for members and/or beneficiaries of members who have retired on or before 15
208	208	July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 16
209	209	days following the enactment of the legislation implementing this provision, and a second one-time 17
210	210	stipend of five hundred dollars ($500) in the same month of the following year. These stipends 18
211	211	shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 19
212	212	payment date and shall not be considered cost of living adjustments under the prior provisions of 20
213	213	this section. 21
214	214	(j)(1) Notwithstanding the prior subsections of this section, for all present and former 22
215	215	employees, active and retired members, and beneficiaries receiving any retirement, disability, or 23
216	216	death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 24
217	217	under this section for adjustments on and after January 1, 2024, shall be three percent (3%) and 25
218	218	applied to the first fifty thousand dollars ($50,000) of the member's retirement allowance provided 26
219	219	that the prior year investment return shall yield a gain of ten percent (10%) or more. 27
220	220	(2) In the event that the funding ratio of the employee's retirement system of Rhode Island, 28
221	221	the judicial retirement benefits trust and the state police retirement benefits trust, calculated by the 29
222	222	system's actuary on an aggregate basis exceeds eighty percent (80%), this subsection shall become 30
223	223	null and void and the annual benefit adjustment shall be awarded pursuant to the provisions of 31
224	224	subsection (h) of this section. 32
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228	228	SECTION 2. This act shall take effect upon passage. 1
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235	235	EXPLANATION
236	236	BY THE LEGISLATIVE COUNCIL
237	237	OF
238	238	A N A C T
239	239	RELATING TO PUBLIC OFFICERS AND EMPLOYEES - RETIREMENT SYSTEM -
240	240	CONTRIBUTIONS AND BE NEFITS
241	241	***
242	242	This act would award all members of the pension system a three percent (3%) annual 1
243	243	benefit adjustment (COLA) applied to the first fifty thousand dollars ($50,000) of a member's 2
244	244	retirement allowance on and after January 1, 2024, provided the prior year investment return yields 3
245	245	a gain of ten percent (10%) or more until the pension system funding ratio exceeds eighty percent 4
246	246	(80%). 5
247	247	This act would take effect upon passage. 6
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