2025 -- H 5766
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LC002086
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S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2025
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A N A C T
RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM
BENEFITS -- CONTRIBUTIONS AND BENEFITS
Introduced By: Representatives O'Brien, Dawson, Finkelman, Caldwell, McEntee,
Shanley, Read, Azzinaro, Slater, and DeSimone
Date Introduced: February 26, 2025
Referred To: House Finance
It is enacted by the General Assembly as follows:
SECTION 1. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement 1
System — Contributions and Benefits" is hereby amended to read as follows: 2
36-10-35. Additional benefits payable to retired employees. 3
(a) All state employees and all beneficiaries of state employees receiving any service 4
retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of 5
this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal 6
to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, 7
for each calendar year the retirement allowance has been in effect. For the purposes of computation, 8
credit shall be given for a full calendar year regardless of the effective date of the retirement 9
allowance. This cost of living adjustment shall be added to the amount of the retirement allowance 10
as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the 11
original retirement allowance in each succeeding year during the month of January, and provided 12
further, that this additional cost of living increase shall be three percent (3%) for the year beginning 13
January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the 14
above provisions, no employee receiving any service retirement allowance pursuant to the 15
provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive 16
any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over 17
the service retirement allowance where the employee retired prior to January 1, 1958. 18
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(b) All state employees and all beneficiaries of state employees retired on or after January 1
1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement 2
allowance pursuant to the provisions of this title shall, on the first day of January next following 3
the third anniversary date of the retirement, receive a cost of living retirement adjustment, in 4
addition to their retirement allowance, in an amount equal to three percent (3%) of the original 5
retirement allowance. In each succeeding year thereafter through December 31, 1980, during the 6
month of January, the retirement allowance shall be increased an additional three percent (3%) of 7
the original retirement allowance, not compounded, to be continued during the lifetime of the 8
employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar 9
year regardless of the effective date of the service retirement allowance. 10
(c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state 11
employees receiving any service retirement and all state employees, and all beneficiaries of state 12
employees, who have completed at least ten (10) years of contributory service on or before July 1, 13
2005, pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries 14
of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36-15
10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of 16
the original retirement allowance or the retirement allowance as computed in accordance with § 17
36-10-35.1, compounded annually from the year for which the cost of living adjustment was 18
determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) 19
of this section. Such cost of living adjustments are available to members who retire before October 20
1, 2009, or are eligible to retire as of September 30, 2009. 21
(2) The provisions of this subsection shall be deemed to apply prospectively only and no 22
retroactive payment shall be made. 23
(3) The retirement allowance of all state employees and all beneficiaries of state employees 24
who have not completed at least ten (10) years of contributory service on or before July 1, 2005, or 25
were not eligible to retire as of September 30, 2009, shall, on the month following the third 26
anniversary date of retirement, and on the month following the anniversary date of each succeeding 27
year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or 28
the percentage of increase in the Consumer Price Index for All Urban Consumers (CPI-U) as 29
published by the United States Department of Labor Statistics determined as of September 30 of 30
the prior calendar year, whichever is less; the cost of living adjustment shall be compounded 31
annually from the year for which the cost of living adjustment was determined payable by the 32
retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased 33
from the retirement allowance provided immediately before such adjustment. 34
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(d) For state employees not eligible to retire in accordance with this chapter as of 1
September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the 2
cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first 3
thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall 4
commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches 5
age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase 6
annually by the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-7
U) as published by the United States Department of Labor Statistics determined as of September 8
30 of the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand 9
dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of 10
increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published by the United 11
States Department of Labor Statistics determined as of September 30 of the prior calendar year or 12
three percent (3%), whichever is less, on the month following the anniversary date of each 13
succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon 14
passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not 15
apply. 16
(e) All legislators and all beneficiaries of legislators who are receiving a retirement 17
allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall, 18
commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a 19
retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. 20
In each succeeding year thereafter during the month of January, the retirement allowance shall be 21
increased an additional three percent (3%) of the original retirement allowance, compounded 22
annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of 23
computation, credit shall be given for a full calendar year regardless of the effective date of the 24
service retirement allowance. 25
(f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 26
(g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015. 27
(1) Notwithstanding the prior paragraphs of this section, and subject to subsection (g)(2) 28
below, for all present and former employees, active and retired members, and beneficiaries 29
receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit 30
adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) 31
where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 32
(the “subtrahend”) from the Five-Year Average Investment Return of the retirement system 33
determined as of the last day of the plan year preceding the calendar year in which the adjustment 34
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is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 1
(0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five 2
thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) 3
amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The 4
“Five-Year Average Investment Return” shall mean the average of the investment returns of the 5
most recent five (5) plan years as determined by the retirement board. Subject to subsection (g)(2) 6
below, the benefit adjustment provided by this subsection (g)(1) shall commence upon the third 7
(3rd) anniversary of the date of retirement or the date on which the retiree reaches their Social 8
Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 9
assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 10
either upward or downward in the same amount. 11
(2) Except as provided in subsection (g)(3), the benefit adjustments under this section for 12
any plan year shall be suspended in their entirety unless the funded ratio of the employees’ 13
retirement system of Rhode Island, the judicial retirement benefits trust, and the state police 14
retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 15
percent (80%) in which event the benefit adjustment will be reinstated for all members for such 16
plan year. 17
In determining whether a funding level under this subsection (g)(2) has been achieved, the 18
actuary shall calculate the funding percentage after taking into account the reinstatement of any 19
current or future benefit adjustment provided under this section. 20
(3) Notwithstanding subsection (g)(2), in each fifth plan year commencing after June 30, 21
2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 22
plan years, a benefit adjustment shall be calculated and made in accordance with subsection (g)(1) 23
above until the funded ratio of the employees’ retirement system of Rhode Island, the judicial 24
retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s 25
actuary on an aggregate basis, exceeds eighty percent (80%). 26
(4) Notwithstanding any other provision of this chapter, the provisions of this subsection 27
(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or 28
prior to June 30, 2012. 29
(h) This subsection (h) shall become effective July 1, 2015. 30
(1)(A) As soon as administratively reasonable following the enactment into law of this 31
subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or 32
beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent 33
(2%) of the lesser of either the member’s retirement allowance or the first twenty-five thousand 34
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dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be 1
provided without regard to the retiree’s age or number of years since retirement. 2
(B) Notwithstanding the prior subsections of this section, for all present and former 3
employees, active and retired members, and beneficiaries receiving any retirement, disability or 4
death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 5
under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2) 6
below, shall be equal to (I) multiplied by (II): 7
(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 8
(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 9
(the “subtrahend”) from the five-year average investment return of the retirement system 10
determined as of the last day of the plan year preceding the calendar year in which the adjustment 11
is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 12
(0%). The “five-year average investment return” shall mean the average of the investment returns 13
of the most recent five (5) plan years as determined by the retirement board. In the event the 14
retirement board adjusts the actuarially assumed rate of return for the system, either upward or 15
downward, the subtrahend shall be adjusted either upward or downward in the same amount. 16
(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 17
Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor 18
Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) 19
plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%). 20
(II) is equal to the lesser of either the member’s retirement allowance or the first twenty-21
five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 22
to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above. 23
The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all 24
retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 25
and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 26
date of retirement or the date on which the retiree reaches their Social Security retirement age, 27
whichever is later. 28
(2) Except for members and/or beneficiaries of members who retired on or before June 30, 29
2012, the benefit adjustments under subsection (h)(1)(B) for any plan year shall be reduced to 30
twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’ 31
retirement system of Rhode Island, the judicial retirement benefits trust, and the state police 32
retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 33
percent (80%) in which event the benefit adjustment will be reinstated for all members for such 34
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plan year. Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode 1
Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated 2
by the system’s actuary on an aggregate basis, of exceeding eighty percent (80%) for the benefit 3
adjustment to be reinstated for all members for such plan year shall be replaced with seventy-five 4
percent (75%). 5
In determining whether a funding level under this subsection (h)(2) has been achieved, the 6
actuary shall calculate the funding percentage after taking into account the reinstatement of any 7
current or future benefit adjustment provided under this section. 8
(3) Effective for members and/or beneficiaries of members who retired after June 30, 2012, 9
or on or before June 30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand 10
eight hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and 11
twenty-six dollars ($31,026) until the funded ratio of the employees’ retirement system of Rhode 12
Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated 13
by the system’s actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1, 14
2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement 15
benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on 16
an aggregate basis, of exceeding eighty percent (80%) shall be replaced with seventy-five percent 17
(75%). 18
(4) Notwithstanding any provision to the contrary, if the annual investment return of the 19
retirement system exceeds ten percent (10%) then a yearly cost of living adjustment for retirees and 20
beneficiaries shall be reinstated in an amount of three percent (3%) of the original retirement 21
allowance, for that investment year. 22
(i) Effective for members and/or beneficiaries of members who have retired on or before 23
July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 24
days following the enactment of the legislation implementing this provision, and a second one-time 25
stipend of five hundred dollars ($500) in the same month of the following year. These stipends 26
shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 27
payment date and shall not be considered cost of living adjustments under the prior provisions of 28
this section. 29
SECTION 2. This act shall take effect upon passage. 30
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM
BENEFITS -- CONTRIBUTIONS AND BENEFITS
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This act would reinstate the cost of living adjustments for retirees, when the annual 1
investment return of the retirement system, exceeds ten percent (10%). 2
This act would take effect upon passage. 3
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LC002086
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