Rhode Island 2023 Regular Session

Rhode Island Senate Bill S0854 Compare Versions

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

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5	5	2023 -- S 0854
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7	7	LC002651
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9	9	S T A T E O F R H O D E I S L A N D
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: Senators Britto, Gallo, Ciccone, Miller, Cano, Euer, and Tikoian
17	17	Date Introduced: March 30, 2023
18	18	Referred To: Senate Finance
19	19
20	20
21	21	It is enacted by the General Assembly as follows:
22	22	SECTION 1. Section 16-16-40 of the General Laws in Chapter 16-16 entitled "Teachers’ 1
23	23	Retirement [See Title 16 Chapter 97 — The Rhode Island Board of Education Act]" is hereby 2
24	24	amended to read as follows: 3
25	25	16-16-40. Additional benefits payable to retired teachers. 4
26	26	(a) All teachers and all beneficiaries of teachers receiving any service retirement or 5
27	27	ordinary or accidental disability retirement allowance pursuant to the provisions of this chapter and 6
28	28	chapter 17 of this title, on or before December 31, 1967, shall receive a cost of living retirement 7
29	29	adjustment equal to one and one-half percent (1.5%) per year of the original retirement allowance, 8
30	30	not compounded, for each year the retirement allowance has been in effect. For purposes of 9
31	31	computation credit shall be given for a full calendar year regardless of the effective date of the 10
32	32	retirement allowance. This cost of living retirement adjustment shall be added to the amount of the 11
33	33	service retirement allowance as of January 1, 1970, and payment shall begin as of July 1, 1970. An 12
34	34	additional cost of living retirement adjustment shall be added to the original retirement allowance 13
35	35	equal to three percent (3%) of the original retirement allowance on the first day of January, 1971, 14
36	36	and each year thereafter through December 31, 1980. 15
37	37	(b) All teachers and beneficiaries of teachers receiving any service retirement or ordinary 16
38	38	disability retirement allowance pursuant to the provisions of this title who retired on or after January 17
39	39	1, 1968, shall, on the first day of January, next following the third (3rd) year on retirement, receive 18
40	40	a cost of living adjustment, in addition to his or her retirement allowance, an amount equal to three 19
41	41
42	42
43	43	LC002651 - Page 2 of 17
44	44	percent (3%) of the original retirement allowance. In each succeeding year thereafter, on the first 1
45	45	day of January, the retirement allowance shall be increased an additional three percent (3%) of the 2
46	46	original retirement allowance, not compounded, to be continued through December 31, 1980. 3
47	47	(c)(1) Beginning on January 1, 1981, for all teachers and beneficiaries of teachers receiving 4
48	48	any service retirement and all teachers and all beneficiaries of teachers who have completed at least 5
49	49	ten (10) years of contributory service on or before July 1, 2005, pursuant to the provisions of this 6
50	50	chapter, and for all teachers and beneficiaries of teachers who receive a disability retirement 7
51	51	allowance pursuant to §§ 16-16-14 — 16-16-17, the cost of living adjustment shall be computed 8
52	52	and paid at the rate of three percent (3%) of the original retirement allowance or the retirement 9
53	53	allowance as computed in accordance with § 16-16-40.1, compounded annually from the year for 10
54	54	which the cost of living adjustment was determined to be payable by the retirement board pursuant 11
55	55	to the provisions of subsection (a) or (b) of this section. Such cost of living adjustments are available 12
56	56	to teachers who retire before October 1, 2009, or are eligible to retire as of September 30, 2009. 13
57	57	(2) The provisions of this subsection shall be deemed to apply prospectively only and no 14
58	58	retroactive payment shall be made. 15
59	59	(3) The retirement allowance of all teachers and all beneficiaries of teachers who have not 16
60	60	completed at least ten (10) years of contributory service on or before July 1, 2005, or were not 17
61	61	eligible to retire as of September 30, 2009, shall, on the month following the third anniversary date 18
62	62	of the retirement, and on the month following the anniversary date of each succeeding year be 19
63	63	adjusted and computed by multiplying the retirement allowance by three percent (3%) or the 20
64	64	percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published 21
65	65	by the United States Department of Labor Statistics, determined as of September 30 of the prior 22
66	66	calendar year, whichever is less; the cost of living adjustment shall be compounded annually from 23
67	67	the year for which the cost of living adjustment was determined payable by the retirement board; 24
68	68	provided, that no adjustment shall cause any retirement allowance to be decreased from the 25
69	69	retirement allowance provided immediately before such adjustment. 26
70	70	(d) For teachers not eligible to retire in accordance with this chapter as of September 30, 27
71	71	2009, and not eligible upon passage of this article, and for their beneficiaries, the cost of living 28
72	72	adjustment described in subsection (3) above shall only apply to the first thirty-five thousand 29
73	73	dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon the third 30
74	74	(3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65), whichever 31
75	75	is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage 32
76	76	increase in the Consumer Price Index for all Urban Consumer (CPI-U) as published by the United 33
77	77	States Department of Labor Statistics determined as of September 30 of the prior calendar year or 34
78	78
79	79
80	80	LC002651 - Page 3 of 17
81	81	three percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, 1
82	82	of retirement allowance shall be multiplied by the percentage of increase in the Consumer Price 2
83	83	Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor 3
84	84	Statistics determined as of September 30 of the prior calendar year or three percent (3%), whichever 4
85	85	is less, on the month following the anniversary date of each succeeding year. For teachers eligible 5
86	86	to retire as of September 30, 2009, or eligible upon passage of this article, and for their 6
87	87	beneficiaries, the provisions of this subsection (d) shall not apply. 7
88	88	(e) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 8
89	89	(f) This subsection (f) shall be effective for the period July 1, 2012, through June 30, 2015. 9
90	90	(1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (f)(2) 10
91	91	below, for all present and former teachers, active and retired teachers, and beneficiaries receiving 11
92	92	any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment 12
93	93	provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) 13
94	94	is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the 14
95	95	“subtrahend”) from the Five-Year Average Investment Return of the retirement system determined 15
96	96	as of the last day of the plan year preceding the calendar year in which the adjustment is granted, 16
97	97	said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) 17
98	98	is equal to the lesser of the teacher’s retirement allowance or the first twenty-five thousand dollars 18
99	99	($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) amount to be 19
100	100	indexed annually in the same percentage as determined under paragraph (f)(1)(A) above. The 20
101	101	“Five-Year Average Investment Return” shall mean the average of the investment returns of the 21
102	102	most recent five (5) plan years as determined by the retirement board. Subject to paragraph (f)(2) 22
103	103	below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd) 23
104	104	anniversary of the date of retirement or the date on which the retiree reaches his or her Social 24
105	105	Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 25
106	106	assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 26
107	107	either upward or downward in the same amount. 27
108	108	(2) Except as provided in paragraph (f)(3), the benefit adjustments under this section for 28
109	109	any plan year shall be suspended in their entirety unless the Funded Ratio of the Employees’ 29
110	110	Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 30
111	111	Retirement Benefits Trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 31
112	112	percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan 32
113	113	year. 33
114	114	In determining whether a funding level under this paragraph (f)(2) has been achieved, the 34
115	115
116	116
117	117	LC002651 - Page 4 of 17
118	118	actuary shall calculate the funding percentage after taking into account the reinstatement of any 1
119	119	current or future benefit adjustment provided under this section. 2
120	120	(3) Notwithstanding paragraph (f)(2), in each fifth plan year commencing after June 30, 3
121	121	2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 4
122	122	plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (f)(1) 5
123	123	above until the Funded Ratio of the Employees’ Retirement System of Rhode Island, the Judicial 6
124	124	Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by the 7
125	125	system’s actuary on an aggregate basis, exceeds eighty percent (80%). 8
126	126	(4) Notwithstanding any other provisions of this chapter, the provisions of this paragraph 9
127	127	(f) of § 16-16-40 shall become effective July 1, 2012, and shall apply to any benefit adjustments 10
128	128	not granted on or prior to June 30, 2012. 11
129	129	(g) This subsection (g) shall become effective July 1, 2015. 12
130	130	(1)(A) As soon as administratively reasonable following the enactment into law of this 13
131	131	subsection (g)(1)(A), a one-time benefit adjustment shall be provided to teachers and/or 14
132	132	beneficiaries of teachers who retired on or before June 30, 2012, in the amount of two percent (2%) 15
133	133	of the lesser of either the teacher’s retirement allowance or the first twenty-five thousand dollars 16
134	134	($25,000) of the teacher’s retirement allowance. This one-time benefit adjustment shall be provided 17
135	135	without regard to the retiree’s age or number of years since retirement. 18
136	136	(B) Notwithstanding the prior subsections of this section, for all present and former 19
137	137	teachers, active and retired teachers, and beneficiaries receiving any retirement, disability or death 20
138	138	allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year under 21
139	139	this section for adjustments on and after January 1, 2016, and subject to subsection (g)(2) below, 22
140	140	shall be equal to (I) multiplied by (II): 23
141	141	(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 24
142	142	(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 25
143	143	(the “subtrahend”) from the five-year average investment return of the retirement system 26
144	144	determined as of the last day of the plan year preceding the calendar year in which the adjustment 27
145	145	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 28
146	146	(0%). The “five-year average investment return” shall mean the average of the investment returns 29
147	147	of the most recent five (5) plan years as determined by the retirement board. In the event the 30
148	148	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 31
149	149	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 32
150	150	(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 33
151	151	Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 34
152	152
153	153
154	154	LC002651 - Page 5 of 17
155	155	Statistics determined as of September 30 of the prior calendar year. 1
156	156	In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less 2
157	157	than (0%) percent. 3
158	158	(II) is equal to the lesser of either the teacher’s retirement allowance or the first twenty-4
159	159	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 5
160	160	to be indexed annually in the same percentage as determined under subsection (g)(1)(B)(I) above. 6
161	161	The benefit adjustments provided by this subsection (g)(1)(B) shall be provided to all 7
162	162	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 8
163	163	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 9
164	164	date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 10
165	165	whichever is later. 11
166	166	(2) Except as provided in subsection (g)(3), the benefit adjustments under subsection 12
167	167	(g)(1)(B) for any plan year shall be suspended in their entirety unless the funded ratio of the 13
168	168	employees’ retirement system of Rhode Island, the judicial retirement benefits trust and the state 14
169	169	police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds 15
170	170	eighty percent (80%) in which event the benefit adjustment will be reinstated for all teachers for 16
171	171	such plan year. 17
172	172	In determining whether a funding level under this subsection (g)(2) has been achieved, the 18
173	173	actuary shall calculate the funding percentage after taking into account the reinstatement of any 19
174	174	current or future benefit adjustment provided under this section. 20
175	175	(3) Notwithstanding subsection (g)(2), in each fourth plan year commencing after June 30, 21
176	176	2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 22
177	177	plan years: (i) A benefit adjustment shall be calculated and made in accordance with subsection 23
178	178	(g)(1)(B) above; and (ii) Effective for teachers and/or beneficiaries of teachers who retired on or 24
179	179	before June 30, 2015, the dollar amount in subsection (g)(1)(B)(II) of twenty-five thousand eight 25
180	180	hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 26
181	181	dollars ($31,026)until the funded ratio of the employees’ retirement system of Rhode Island, the 27
182	182	judicial retirement benefits trust and the state police retirement benefits trust, calculated by the 28
183	183	system’s actuary on an aggregate basis, exceeds eighty percent (80%). 29
184	184	(4) Effective for teachers and or beneficiaries of teachers who have retired on or before 30
185	185	July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 31
186	186	days following the enactment of the legislation implementing this provision, and a second one-time 32
187	187	stipend of five hundred dollars ($500) in the same month of the following year. These stipends 33
188	188	shall be payable to all retired teachers or beneficiaries receiving a benefit as of the applicable 34
189	189
190	190
191	191	LC002651 - Page 6 of 17
192	192	payment date and shall not be considered cost of living adjustments under the prior provisions of 1
193	193	this § 16-16-40. 2
194	194	(h) An additional one-time allowance shall be paid to eligible members of the retirement 3
195	195	system, or any beneficiary of such member, in accordance with the provisions of this subsection. 4
196	196	(1) Effective for eligible members and/or beneficiaries of members a one-time allowance 5
197	197	of five hundred dollars ($500). 6
198	198	(2) For purposes of this subsection an "eligible member" is a retired member of the 7
199	199	retirement system, or any beneficiary of such member, that has retired on or before July 1, 2022. 8
200	200	(3) The allowances provided under this subsection shall be payable as soon as 9
201	201	administratively reasonable following the effective date of this subsection. 10
202	202	(4) The allowances provided under this subsection shall be payable to eligible members or 11
203	203	beneficiaries receiving a benefit as of the payment date and shall not be considered cost of living 12
204	204	adjustments under the prior provisions of this section. 13
205	205	(5) The provisions of this subsection shall be paid from the state's general fund, subject to 14
206	206	an appropriation by the general assembly. 15
207	207	SECTION 2. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement 16
208	208	System — Contributions and Benefits" is hereby amended to read as follows: 17
209	209	36-10-35. Additional benefits payable to retired employees. 18
210	210	(a) All state employees and all beneficiaries of state employees receiving any service 19
211	211	retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of 20
212	212	this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal 21
213	213	to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, 22
214	214	for each calendar year the retirement allowance has been in effect. For the purposes of computation, 23
215	215	credit shall be given for a full calendar year regardless of the effective date of the retirement 24
216	216	allowance. This cost of living adjustment shall be added to the amount of the retirement allowance 25
217	217	as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the 26
218	218	original retirement allowance in each succeeding year during the month of January, and provided 27
219	219	further, that this additional cost of living increase shall be three percent (3%) for the year beginning 28
220	220	January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the 29
221	221	above provisions, no employee receiving any service retirement allowance pursuant to the 30
222	222	provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive 31
223	223	any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over 32
224	224	the service retirement allowance where the employee retired prior to January 1, 1958. 33
225	225	(b) All state employees and all beneficiaries of state employees retired on or after January 34
226	226
227	227
228	228	LC002651 - Page 7 of 17
229	229	1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement 1
230	230	allowance pursuant to the provisions of this title shall, on the first day of January next following 2
231	231	the third anniversary date of the retirement, receive a cost of living retirement adjustment, in 3
232	232	addition to his or her retirement allowance, in an amount equal to three percent (3%) of the original 4
233	233	retirement allowance. In each succeeding year thereafter through December 31, 1980, during the 5
234	234	month of January, the retirement allowance shall be increased an additional three percent (3%) of 6
235	235	the original retirement allowance, not compounded, to be continued during the lifetime of the 7
236	236	employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar 8
237	237	year regardless of the effective date of the service retirement allowance. 9
238	238	(c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state 10
239	239	employees receiving any service retirement and all state employees, and all beneficiaries of state 11
240	240	employees, who have completed at least ten (10) years of contributory service on or before July 1, 12
241	241	2005, pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries 13
242	242	of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36-14
243	243	10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of 15
244	244	the original retirement allowance or the retirement allowance as computed in accordance with § 16
245	245	36-10-35.1, compounded annually from the year for which the cost of living adjustment was 17
246	246	determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) 18
247	247	of this section. Such cost of living adjustments are available to members who retire before October 19
248	248	1, 2009, or are eligible to retire as of September 30, 2009. 20
249	249	(2) The provisions of this subsection shall be deemed to apply prospectively only and no 21
250	250	retroactive payment shall be made. 22
251	251	(3) The retirement allowance of all state employees and all beneficiaries of state employees 23
252	252	who have not completed at least ten (10) years of contributory service on or before July 1, 2005, or 24
253	253	were not eligible to retire as of September 30, 2009, shall, on the month following the third 25
254	254	anniversary date of retirement, and on the month following the anniversary date of each succeeding 26
255	255	year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or 27
256	256	the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as 28
257	257	published by the United States Department of Labor Statistics determined as of September 30 of 29
258	258	the prior calendar year, whichever is less; the cost of living adjustment shall be compounded 30
259	259	annually from the year for which the cost of living adjustment was determined payable by the 31
260	260	retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased 32
261	261	from the retirement allowance provided immediately before such adjustment. 33
262	262	(d) For state employees not eligible to retire in accordance with this chapter as of 34
263	263
264	264
265	265	LC002651 - Page 8 of 17
266	266	September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the 1
267	267	cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first 2
268	268	thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall 3
269	269	commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches 4
270	270	age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase 5
271	271	annually by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-6
272	272	U) as published by the United States Department of Labor Statistics determined as of September 7
273	273	30 of the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand 8
274	274	dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of 9
275	275	increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United 10
276	276	States Department of Labor Statistics determined as of September 30 of the prior calendar year or 11
277	277	three percent (3%), whichever is less, on the month following the anniversary date of each 12
278	278	succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon 13
279	279	passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not 14
280	280	apply. 15
281	281	(e) All legislators and all beneficiaries of legislators who are receiving a retirement 16
282	282	allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall, 17
283	283	commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a 18
284	284	retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. 19
285	285	In each succeeding year thereafter during the month of January, the retirement allowance shall be 20
286	286	increased an additional three percent (3%) of the original retirement allowance, compounded 21
287	287	annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of 22
288	288	computation, credit shall be given for a full calendar year regardless of the effective date of the 23
289	289	service retirement allowance. 24
290	290	(f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 25
291	291	(g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015. 26
292	292	(1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (g)(2) 27
293	293	below, for all present and former employees, active and retired members, and beneficiaries 28
294	294	receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit 29
295	295	adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) 30
296	296	where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 31
297	297	(the “subtrahend”) from the Five-Year Average Investment Return of the retirement system 32
298	298	determined as of the last day of the plan year preceding the calendar year in which the adjustment 33
299	299	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 34
300	300
301	301
302	302	LC002651 - Page 9 of 17
303	303	(0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five 1
304	304	thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) 2
305	305	amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The 3
306	306	“Five-Year Average Investment Return” shall mean the average of the investment returns of the 4
307	307	most recent five (5) plan years as determined by the retirement board. Subject to paragraph (g)(2) 5
308	308	below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd) 6
309	309	anniversary of the date of retirement or the date on which the retiree reaches his or her Social 7
310	310	Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 8
311	311	assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 9
312	312	either upward or downward in the same amount. 10
313	313	(2) Except as provided in paragraph (g)(3), the benefit adjustments under this section for 11
314	314	any plan year shall be suspended in their entirety unless the Funded Ratio of the Employees’ 12
315	315	Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 13
316	316	Retirement Benefits Trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 14
317	317	percent (80%) in which event the benefit adjustment will be reinstated for all members for such 15
318	318	plan year. 16
319	319	In determining whether a funding level under this paragraph (g)(2) has been achieved, the 17
320	320	actuary shall calculate the funding percentage after taking into account the reinstatement of any 18
321	321	current or future benefit adjustment provided under this section. 19
322	322	(3) Notwithstanding paragraph (g)(2), in each fifth plan year commencing after June 30, 20
323	323	2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 21
324	324	plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (g)(1) 22
325	325	above until the Funded Ratio of the Employees’ Retirement System of Rhode Island, the Judicial 23
326	326	Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by the 24
327	327	system’s actuary on an aggregate basis, exceeds eighty percent (80%). 25
328	328	(4) Notwithstanding any other provision of this chapter, the provisions of this paragraph 26
329	329	(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or 27
330	330	prior to June 30, 2012. 28
331	331	(h) This subsection (h) shall become effective July 1, 2015. 29
332	332	(1)(A) As soon as administratively reasonable following the enactment into law of this 30
333	333	subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or 31
334	334	beneficiaries of members who retired on or before June 30, 2012, in the amount of 2% of the lesser 32
335	335	of either the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 33
336	336	the member’s retirement allowance. This one-time benefit adjustment shall be provided without 34
337	337
338	338
339	339	LC002651 - Page 10 of 17
340	340	regard to the retiree’s age or number of years since retirement. 1
341	341	(B) Notwithstanding the prior subsections of this section, for all present and former 2
342	342	employees, active and retired members, and beneficiaries receiving any retirement, disability or 3
343	343	death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 4
344	344	under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2) 5
345	345	below, shall be equal to (I) multiplied by (II): 6
346	346	(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 7
347	347	(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 8
348	348	(the “subtrahend”) from the five-year average investment return of the retirement system 9
349	349	determined as of the last day of the plan year preceding the calendar year in which the adjustment 10
350	350	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 11
351	351	(0%). The “five-year average investment return” shall mean the average of the investment returns 12
352	352	of the most recent five (5) plan years as determined by the retirement board. In the event the 13
353	353	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 14
354	354	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 15
355	355	(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 16
356	356	Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 17
357	357	Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) 18
358	358	plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%). 19
359	359	(II) Is equal to the lesser of either the member’s retirement allowance or the first twenty-20
360	360	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 21
361	361	to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above. 22
362	362	The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all 23
363	363	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 24
364	364	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 25
365	365	date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 26
366	366	whichever is later. 27
367	367	(2) Except as provided in subsection (h)(3) of this section, the benefit adjustments under 28
368	368	subsection (h)(1)(B) for any plan year shall be suspended in their entirety unless the funded ratio 29
369	369	of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust and the 30
370	370	state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, 31
371	371	exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 32
372	372	members for such plan year. 33
373	373	In determining whether a funding level under this subsection (h)(2) has been achieved, the 34
374	374
375	375
376	376	LC002651 - Page 11 of 17
377	377	actuary shall calculate the funding percentage after taking into account the reinstatement of any 1
378	378	current or future benefit adjustment provided under this section. 2
379	379	(3) Notwithstanding subsection (h)(2), in each fourth plan year commencing after June 30, 3
380	380	2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 4
381	381	plan years: 5
382	382	(i) A benefit adjustment shall be calculated and made in accordance with subsection 6
383	383	(h)(1)(B) above; and 7
384	384	(ii) Effective for members and/or beneficiaries of members who retired on or before June 8
385	385	30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand eight hundred and 9
386	386	fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six dollars 10
387	387	($31,026) until the funded ratio of the employees’ retirement system of Rhode Island, the judicial 11
388	388	retirement benefits trust and the state police retirement benefits trust, calculated by the system’s 12
389	389	actuary on an aggregate basis, exceeds eighty percent (80%). 13
390	390	(i) Effective for members and/or beneficiaries of members who have retired on or before 14
391	391	July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 15
392	392	days following the enactment of the legislation implementing this provision, and a second one-time 16
393	393	stipend of five hundred dollars ($500) in the same month of the following year. These stipends 17
394	394	shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 18
395	395	payment date and shall not be considered cost of living adjustments under the prior provisions of 19
396	396	this section. 20
397	397	(j) An additional one-time allowance shall be paid to eligible members of the retirement 21
398	398	system, or any beneficiary of such member, in accordance with the provisions of this subsection. 22
399	399	(1) Effective for eligible members and/or beneficiaries of members a one-time allowance 23
400	400	of five hundred dollars ($500). 24
401	401	(2) For purposes of this subsection an "eligible member" is a retired member of the 25
402	402	retirement system, or any beneficiary of such member, that has retired on or before July 1, 2022. 26
403	403	(3) The allowances provided under this subsection shall be payable as soon as 27
404	404	administratively reasonable following the effective date of this subsection. 28
405	405	(4) The allowances provided under this subsection shall be payable to eligible members or 29
406	406	beneficiaries receiving a benefit as of the payment date and shall not be considered cost of living 30
407	407	adjustments under the prior provisions of this section. 31
408	408	(5) The provisions of this subsection shall be paid from the state's general fund, subject to 32
409	409	an appropriation by the general assembly. 33
410	410	SECTION 3. Section 45-21-52 of the General Laws in Chapter 45-21 entitled "Retirement 34
411	411
412	412
413	413	LC002651 - Page 12 of 17
414	414	of Municipal Employees" is hereby amended to read as follows: 1
415	415	45-21-52. Automatic increase in service retirement allowance. 2
416	416	(a) The local legislative bodies of the cities and towns may extend to their respective 3
417	417	employees automatic adjustment increases in their service retirement allowances, by a resolution 4
418	418	accepting any of the plans described in this section: 5
419	419	(1) Plan A. All employees and beneficiaries of those employees receiving a service 6
420	420	retirement or disability retirement allowance under the provisions of this chapter on December 31 7
421	421	of the year their city or town accepts this section, receive a cost of living adjustment equal to one 8
422	422	and one-half percent (1
423	423	1
424	424	/2%) per year of the original retirement allowance, not compounded, for 9
425	425	each calendar year the retirement allowance has been in effect. This cost of living adjustment is 10
426	426	added to the amount of the retirement allowance as of January 1 following acceptance of this 11
427	427	provision, and an additional one and one-half percent (1
428	428	1
429	429	/2%) is added to the original retirement 12
430	430	allowance in each succeeding year during the month of January, and provided, further, that this 13
431	431	additional cost of living increase is three percent (3%) for the year beginning January 1 of the year 14
432	432	the plan is accepted and each succeeding year. 15
433	433	(2) Plan B. All employees and beneficiaries of those employees receiving a retirement 16
434	434	allowance under the provisions of this chapter on December 31 of the year their municipality 17
435	435	accepts this section, receive a cost of living adjustment equal to three percent (3%) of their original 18
436	436	retirement allowance. This adjustment is added to the amount of the retirement allowance as of 19
437	437	January 1 following acceptance of this provision, and an additional three percent (3%) of the 20
438	438	original retirement allowance, not compounded, is payable in each succeeding year in the month 21
439	439	of January. 22
440	440	(3) Plan C. All employees and beneficiaries of those employees who retire on or after 23
441	441	January 1 of the year following acceptance of this section, on the first day of January next following 24
442	442	the date of the retirement, receive a cost of living adjustment in an amount equal to three percent 25
443	443	(3%) of the original retirement allowance. 26
444	444	(b) In each succeeding year in the month of January, the retirement allowance is increased 27
445	445	an additional three percent (3%) of the original retirement allowance, not compounded. 28
446	446	(c) This subsection (c) shall be effective for the period July 1, 2012, through June 30, 2015. 29
447	447	(1) Notwithstanding any other paragraphs of this section, and subject to paragraph (c)(2) 30
448	448	below, for all present and former employees, active and retired members, and beneficiaries 31
449	449	receiving any retirement, disability or death allowance or benefit of any kind by reason of adoption 32
450	450	of this section by their employer, the annual benefit adjustment provided in any calendar year under 33
451	451	this section shall be equal to (A) multiplied by (B) where (A) is equal to the percentage determined 34
452	452
453	453
454	454	LC002651 - Page 13 of 17
455	455	by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the Five-Year Average 1
456	456	Investment Return of the retirement system determined as of the last day of the plan year preceding 2
457	457	the calendar year in which the adjustment is granted, said percentage not to exceed four percent 3
458	458	(4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of the member’s 4
459	459	retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement allowance, 5
460	460	such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same percentage 6
461	461	as determined under (c)(1)(A) above. The “Five-Year Average Investment Return” shall mean the 7
462	462	average of the investment returns of the most recent five (5) plan years as determined by the 8
463	463	retirement board. Subject to paragraph (c)(2) below, the benefit adjustment provided by this 9
464	464	paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date on 10
465	465	which the retiree reaches his or her Social Security retirement age, whichever is later; or for 11
466	466	municipal police and fire retiring under the provisions of chapter 45-21.2, the benefit adjustment 12
467	467	provided by this paragraph shall commence on the later of the third (3rd) anniversary of the date of 13
468	468	retirement or the date on which the retiree reaches age fifty-five (55). In the event the retirement 14
469	469	board adjusts the actuarially assumed rate of return for the system, either upward or downward, the 15
470	470	subtrahend shall be adjusted either upward or downward in the same amount. 16
471	471	(2) Except as provided in paragraph (c)(3) the benefit adjustments provided under this 17
472	472	section for any plan year shall be suspended in their entirety for each municipal plan within the 18
473	473	municipal employees retirement system unless the municipal plan is determined to be funded at a 19
474	474	Funded Ratio equal to or greater than eighty percent (80%) as of the end of the immediately 20
475	475	preceding plan year in accordance with the retirement system’s actuarial valuation report as 21
476	476	prepared by the system’s actuary, in which event the benefit adjustment will be reinstated for all 22
477	477	members for such plan year. 23
478	478	In determining whether a funding level under this paragraph (c)(2) has been achieved, the 24
479	479	actuary shall calculate the funding percentage after taking into account the reinstatement of any 25
480	480	current or future benefit adjustment provided under this section. 26
481	481	(3) Notwithstanding paragraph (c)(2), for each municipal plan that has a Funded Ratio of 27
482	482	less than eighty percent (80%) as of June 30, 2012, in each fifth plan year commencing after June 28
483	483	30, 2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of 29
484	484	five (5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph 30
485	485	(c)(1) above until the municipal plan’s Funded Ratio exceeds eighty percent (80%). 31
486	486	(d) This subsection (d) shall become effective July 1, 2015. 32
487	487	(1)(A) As soon as administratively reasonable following the enactment into law of this 33
488	488	subsection (d)(1)(A), a one-time benefit adjustment shall be provided to members and/or 34
489	489
490	490
491	491	LC002651 - Page 14 of 17
492	492	beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent 1
493	493	(2%) of the lesser of either the employee’s retirement allowance or the first twenty-five thousand 2
494	494	dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be 3
495	495	provided without regard to the retiree’s age or number of years since retirement. 4
496	496	(B) Notwithstanding the prior subsections of this section, for all present and former 5
497	497	employees, active and retired employees, and beneficiaries receiving any retirement, disability or 6
498	498	death allowance or benefit of any kind by reason of adoption of this section by their employer, the 7
499	499	annual benefit adjustment provided in any calendar year under this section for adjustments on and 8
500	500	after January 1, 2016, and subject to paragraph (d)(2) below, shall be equal to (I) multiplied by (II): 9
501	501	(I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 10
502	502	(i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) 11
503	503	(the “subtrahend”) from the five-year average investment return of the retirement system 12
504	504	determined as of the last day of the plan year preceding the calendar year in which the adjustment 13
505	505	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 14
506	506	(0%). The “five-year average investment return” shall mean the average of the investment returns 15
507	507	of the most recent five (5) plan years as determined by the retirement board. In the event the 16
508	508	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 17
509	509	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 18
510	510	(ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 19
511	511	Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 20
512	512	Statistics determined as of September 30 of the prior calendar year. 21
513	513	In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less 22
514	514	than zero percent (0%). 23
515	515	(II) Is equal to the lesser of either the member’s retirement allowance or the first twenty-24
516	516	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 25
517	517	to be indexed annually in the same percentage as determined under subsection (d)(1)(B)(I) above. 26
518	518	The benefit adjustments provided by this subsection (d)(1)(B) shall be provided to all 27
519	519	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 28
520	520	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 29
521	521	date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 30
522	522	whichever is later; or for municipal police and fire retiring under the provisions of § 45-21.2-31
523	523	5(b)(1)(A), the benefit adjustment provided by this paragraph shall commence on the later of the 32
524	524	third anniversary of the date of retirement or the date on which the retiree reaches age fifty-five 33
525	525	(55); or for municipal police and fire retiring under the provisions of § 45-21.2-5(b)(1)(B), the 34
526	526
527	527
528	528	LC002651 - Page 15 of 17
529	529	benefit adjustment provided by this paragraph shall commence on the later of the third anniversary 1
530	530	of the date of retirement or the date on which the retiree reaches age fifty (50). 2
531	531	(2) Except as provided in subsection (d)(3), the benefit adjustments under subsection 3
532	532	(d)(1)(B) for any plan year shall be suspended in their entirety for each municipal plan within the 4
533	533	municipal employees retirement system unless the municipal plan is determined to be funded at a 5
534	534	funded ratio equal to or greater than eighty percent (80%) as of the end of the immediately 6
535	535	preceding plan year in accordance with the retirement system’s actuarial valuation report as 7
536	536	prepared by the system’s actuary, in which event the benefit adjustment will be reinstated for all 8
537	537	members for such plan year. 9
538	538	In determining whether a funding level under this subsection (d)(2) has been achieved, the 10
539	539	actuary shall calculate the funding percentage after taking into account the reinstatement of any 11
540	540	current or future benefit adjustment provided under this section. 12
541	541	(3) Notwithstanding subsection (d)(2), in each fourth plan year commencing after June 30, 13
542	542	2012, commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 14
543	543	plan years: (i) A benefit adjustment shall be calculated and made in accordance with subsection 15
544	544	(d)(1)(B) above; and (ii) Effective for members and/or beneficiaries of members who retired on or 16
545	545	before June 30, 2015, the dollar amount in subsection (d)(1)(B)(II) of twenty-five thousand eight 17
546	546	hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 18
547	547	dollars ($31,026) until the municipal plan’s funded ratio exceeds eighty percent (80%). 19
548	548	(e) Upon acceptance of any of the plans in this section, each employee shall on January 1 20
549	549	next succeeding the acceptance, contribute by means of salary deductions, pursuant to § 45-21-41, 21
550	550	one percent (1%) of the employee’s compensation concurrently with and in addition to 22
551	551	contributions otherwise being made to the retirement system. 23
552	552	(f) The city or town shall make any additional contributions to the system, pursuant to the 24
553	553	terms of § 45-21-42, for the payment of any benefits provided by this section. 25
554	554	(g) The East Greenwich town council shall be allowed to accept Plan C of subsection (a)(3) 26
555	555	of this section for all employees of the town of East Greenwich who either, pursuant to contract 27
556	556	negotiations, bargain for Plan C, or who are non-union employees who are provided with Plan C 28
557	557	and who shall all collectively be referred to as the “Municipal-COLA Group” and shall be separate 29
558	558	from all other employees of the town and school department, union or non-union, who are in the 30
559	559	same pension group but have not been granted Plan C benefits. Upon acceptance by the town 31
560	560	council, benefits in accordance with this section shall be available to all such employees who retire 32
561	561	on or after January 1, 2003. 33
562	562	(h) Effective for members and/or beneficiaries of members who have retired on or before 34
563	563
564	564
565	565	LC002651 - Page 16 of 17
566	566	July 1, 2015, and without regard to whether the retired member or beneficiary is receiving a benefit 1
567	567	adjustment under this section, a one-time stipend of five hundred dollars ($500) shall be payable 2
568	568	within sixty (60) days following the enactment of the legislation implementing this provision, and 3
569	569	a second one-time stipend of five hundred dollars ($500) in the same month of the following year. 4
570	570	These stipends shall not be considered cost of living adjustments under the prior provisions of this 5
571	571	section. 6
572	572	(i) An additional one-time allowance shall be paid to eligible members of the retirement 7
573	573	system, or any beneficiary of such member, in accordance with the provisions of this subsection. 8
574	574	(1) Effective for eligible members and/or beneficiaries of members a one-time allowance 9
575	575	of five hundred dollars ($500). 10
576	576	(2) For purposes of this subsection an "eligible member" is a retired member of the 11
577	577	retirement system, or any beneficiary of such member, that has retired on or before July 1, 2022. 12
578	578	(3) The allowances provided under this subsection shall be payable as soon as 13
579	579	administratively reasonable following the effective date of this subsection. 14
580	580	(4) The allowances provided under this subsection shall be payable to eligible members or 15
581	581	beneficiaries receiving a benefit as of the payment date and shall not be considered cost of living 16
582	582	adjustments under the prior provisions of this section. 17
583	583	(5) The provisions of this subsection shall be paid from the state's general fund, subject to 18
584	584	an appropriation by the general assembly. 19
585	585	SECTION 4. This act shall take effect upon passage. 20
586	586	========
587	587	LC002651
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589	589
590	590
591	591	LC002651 - Page 17 of 17
592	592	EXPLANATION
593	593	BY THE LEGISLATIVE COUNCIL
594	594	OF
595	595	A N A C T
596	596	RELATING TO EDUCATION -- TEACHERS' RETIREMENT
597	597	***
598	598	This act would provide a one-time allowance of five hundred dollars ($500) for eligible 1
599	599	members of the employees' retirement system of Rhode Island. 2
600	600	This act would take effect upon passage. 3
601	601	========
602	602	LC002651
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604	604