Rhode Island 2023 Regular Session

Rhode Island Senate Bill S0546 Compare Versions

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

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5	5	2023 -- S 0546
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7	7	LC002063
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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 RETIREMENT SYSTEM -- CONTRIBUTIONS AND BE NEFITS
16	16	Introduced By: Senators Ciccone, DiPalma, Lombardo, Burke, and Tikoian
17	17	Date Introduced: March 07, 2023
18	18	Referred To: Senate Finance
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21	21	It is enacted by the General Assembly as follows:
22	22	SECTION 1. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement 1
23	23	System — Contributions and Benefits" is hereby amended to read as follows: 2
24	24	36-10-35. Additional benefits payable to retired employees. 3
25	25	(a) All state employees and all beneficiaries of state employees receiving any service 4
26	26	retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of 5
27	27	this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal 6
28	28	to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, 7
29	29	for each calendar year the retirement allowance has been in effect. For the purposes of computation, 8
30	30	credit shall be given for a full calendar year regardless of the effective date of the retirement 9
31	31	allowance. This cost of living adjustment shall be added to the amount of the retirement allowance 10
32	32	as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the 11
33	33	original retirement allowance in each succeeding year during the month of January, and provided 12
34	34	further, that this additional cost of living increase shall be three percent (3%) for the year beginning 13
35	35	January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the 14
36	36	above provisions, no employee receiving any service retirement allowance pursuant to the 15
37	37	provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive 16
38	38	any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over 17
39	39	the service retirement allowance where the employee retired prior to January 1, 1958. 18
40	40	(b) All state employees and all beneficiaries of state employees retired on or after January 19
41	41
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44	44	1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement 1
45	45	allowance pursuant to the provisions of this title shall, on the first day of January next following 2
46	46	the third anniversary date of the retirement, receive a cost of living retirement adjustment, in 3
47	47	addition to his or her retirement allowance, in an amount equal to three percent (3%) of the original 4
48	48	retirement allowance. In each succeeding year thereafter through December 31, 1980, during the 5
49	49	month of January, the retirement allowance shall be increased an additional three percent (3%) of 6
50	50	the original retirement allowance, not compounded, to be continued during the lifetime of the 7
51	51	employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar 8
52	52	year regardless of the effective date of the service retirement allowance. 9
53	53	(c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state 10
54	54	employees receiving any service retirement and all state employees, and all beneficiaries of state 11
55	55	employees, who have completed at least ten (10) years of contributory service on or before July 1, 12
56	56	2005, pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries 13
57	57	of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36-14
58	58	10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of 15
59	59	the original retirement allowance or the retirement allowance as computed in accordance with § 16
60	60	36-10-35.1, compounded annually from the year for which the cost of living adjustment was 17
61	61	determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) 18
62	62	of this section. Such cost of living adjustments are available to members who retire before October 19
63	63	1, 2009, or are eligible to retire as of September 30, 2009. 20
64	64	(2) The provisions of this subsection shall be deemed to apply prospectively only and no 21
65	65	retroactive payment shall be made. 22
66	66	(3) The retirement allowance of all state employees and all beneficiaries of state employees 23
67	67	who have not completed at least ten (10) years of contributory service on or before July 1, 2005, or 24
68	68	were not eligible to retire as of September 30, 2009, shall, on the month following the third 25
69	69	anniversary date of retirement, and on the month following the anniversary date of each succeeding 26
70	70	year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or 27
71	71	the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as 28
72	72	published by the United States Department of Labor Statistics determined as of September 30 of 29
73	73	the prior calendar year, whichever is less; the cost of living adjustment shall be compounded 30
74	74	annually from the year for which the cost of living adjustment was determined payable by the 31
75	75	retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased 32
76	76	from the retirement allowance provided immediately before such adjustment. 33
77	77	(d) For state employees not eligible to retire in accordance with this chapter as of 34
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81	81	September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the 1
82	82	cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first 2
83	83	thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall 3
84	84	commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches 4
85	85	age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase 5
86	86	annually by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-6
87	87	U) as published by the United States Department of Labor Statistics determined as of September 7
88	88	30 of the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand 8
89	89	dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of 9
90	90	increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United 10
91	91	States Department of Labor Statistics determined as of September 30 of the prior calendar year or 11
92	92	three percent (3%), whichever is less, on the month following the anniversary date of each 12
93	93	succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon 13
94	94	passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not 14
95	95	apply. 15
96	96	(e) All legislators and all beneficiaries of legislators who are receiving a retirement 16
97	97	allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall, 17
98	98	commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a 18
99	99	retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. 19
100	100	In each succeeding year thereafter during the month of January, the retirement allowance shall be 20
101	101	increased an additional three percent (3%) of the original retirement allowance, compounded 21
102	102	annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of 22
103	103	computation, credit shall be given for a full calendar year regardless of the effective date of the 23
104	104	service retirement allowance. 24
105	105	(f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 25
106	106	(g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015. 26
107	107	(1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (g)(2) 27
108	108	below, for all present and former employees, active and retired members, and beneficiaries 28
109	109	receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit 29
110	110	adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) 30
111	111	where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 31
112	112	(the “subtrahend”) from the Five-Year Average Investment Return of the retirement system 32
113	113	determined as of the last day of the plan year preceding the calendar year in which the adjustment 33
114	114	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 34
115	115
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118	118	(0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five 1
119	119	thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) 2
120	120	amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The 3
121	121	“Five-Year Average Investment Return” shall mean the average of the investment returns of the 4
122	122	most recent five (5) plan years as determined by the retirement board. Subject to paragraph (g)(2) 5
123	123	below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd) 6
124	124	anniversary of the date of retirement or the date on which the retiree reaches his or her Social 7
125	125	Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 8
126	126	assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 9
127	127	either upward or downward in the same amount. 10
128	128	(2) Except as provided in paragraph (g)(3), the benefit adjustments under this section for 11
129	129	any plan year shall be suspended in their entirety unless the Funded Ratio of the Employees’ 12
130	130	Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 13
131	131	Retirement Benefits Trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 14
132	132	percent (80%) in which event the benefit adjustment will be reinstated for all members for such 15
133	133	plan year. 16
134	134	In determining whether a funding level under this paragraph (g)(2) has been achieved, the 17
135	135	actuary shall calculate the funding percentage after taking into account the reinstatement of any 18
136	136	current or future benefit adjustment provided under this section. 19
137	137	(3) Notwithstanding paragraph (g)(2), in each fifth plan year commencing after June 30, 20
138	138	2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 21
139	139	plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (g)(1) 22
140	140	above until the Funded Ratio of the Employees’ Retirement System of Rhode Island, the Judicial 23
141	141	Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by the 24
142	142	system’s actuary on an aggregate basis, exceeds eighty percent (80%). 25
143	143	(4) Notwithstanding any other provision of this chapter, the provisions of this paragraph 26
144	144	(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or 27
145	145	prior to June 30, 2012. 28
146	146	(h) This subsection (h) shall become effective July 1, 2015. 29
147	147	(1)(A) As soon as administratively reasonable following the enactment into law of this 30
148	148	subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or 31
149	149	beneficiaries of members who retired on or before June 30, 2012, in the amount of 2% of the lesser 32
150	150	of either the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 33
151	151	the member’s retirement allowance. This one-time benefit adjustment shall be provided without 34
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155	155	regard to the retiree’s age or number of years since retirement. 1
156	156	(B) Notwithstanding the prior subsections of this section, for all present and former 2
157	157	employees, active and retired members, and beneficiaries receiving any retirement, disability or 3
158	158	death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 4
159	159	under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2) 5
160	160	below, shall be equal to (I) multiplied by (II): 6
161	161	(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 7
162	162	(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 8
163	163	(the “subtrahend”) from the five-year average investment return of the retirement system 9
164	164	determined as of the last day of the plan year preceding the calendar year in which the adjustment 10
165	165	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 11
166	166	(0%). The “five-year average investment return” shall mean the average of the investment returns 12
167	167	of the most recent five (5) plan years as determined by the retirement board. In the event the 13
168	168	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 14
169	169	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 15
170	170	(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 16
171	171	Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 17
172	172	Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) 18
173	173	plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%). 19
174	174	(II) Is equal to the lesser of either the member’s retirement allowance or the first twenty-20
175	175	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 21
176	176	to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above. 22
177	177	The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all 23
178	178	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 24
179	179	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 25
180	180	date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 26
181	181	whichever is later. 27
182	182	(2) Except as provided in subsection (h)(3) of this section, the benefit adjustments under 28
183	183	subsection (h)(1)(B) for any plan year shall be suspended in their entirety unless the funded ratio 29
184	184	of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust and the 30
185	185	state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, 31
186	186	exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 32
187	187	members for such plan year. 33
188	188	In determining whether a funding level under this subsection (h)(2) has been achieved, the 34
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192	192	actuary shall calculate the funding percentage after taking into account the reinstatement of any 1
193	193	current or future benefit adjustment provided under this section. 2
194	194	(3) Notwithstanding subsection (h)(2), in each fourth plan year commencing after June 30, 3
195	195	2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 4
196	196	plan years: 5
197	197	(i) A benefit adjustment shall be calculated and made in accordance with subsection 6
198	198	(h)(1)(B) above; and 7
199	199	(ii) Effective for members and/or beneficiaries of members who retired on or before June 8
200	200	30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand eight hundred and 9
201	201	fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six dollars 10
202	202	($31,026) until the funded ratio of the employees’ retirement system of Rhode Island, the judicial 11
203	203	retirement benefits trust and the state police retirement benefits trust, calculated by the system’s 12
204	204	actuary on an aggregate basis, exceeds eighty percent (80%). 13
205	205	(i) Effective for members and/or beneficiaries of members who have retired on or before 14
206	206	July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 15
207	207	days following the enactment of the legislation implementing this provision, and a second one-time 16
208	208	stipend of five hundred dollars ($500) in the same month of the following year. These stipends 17
209	209	shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 18
210	210	payment date and shall not be considered cost of living adjustments under the prior provisions of 19
211	211	this section. 20
212	212	(j) Notwithstanding the provisions of this section, subsections (g) and (h) of this section, 21
213	213	shall not apply to members and/or beneficiaries of members who retired prior to July 1, 2012. 22
214	214	SECTION 2. This act shall take effect upon passage. 23
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221	221	EXPLANATION
222	222	BY THE LEGISLATIVE COUNCIL
223	223	OF
224	224	A N A C T
225	225	RELATING TO RETIREMENT SYSTEM -- CONTRIBUTIONS AND BE NEFITS
226	226	***
227	227	This act would restore the cost of living allowance (COLA) to state employees, and/or their 1
228	228	beneficiaries, who retired prior to July 1, 2012. 2
229	229	This act would take effect upon passage. 3
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