Rhode Island 2025 Regular Session

Rhode Island Senate Bill S0249 Compare Versions

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

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7	7	LC001005
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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. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO EDUCATION -- TEACHER'S RETIREMENT
16	16	Introduced By: Senators Sosnowski, Ciccone, DiPalma, Murray, Gu, Valverde, and Gallo
17	17	Date Introduced: February 13, 2025
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. Sections 16-16-26 and 16-16-40 of the General Laws in Chapter 16-16 1
23	23	entitled "Teachers’ Retirement [See Title 16 Chapter 97 — The Rhode Island Board of Education 2
24	24	Act]" are hereby amended to read as follows: 3
25	25	16-16-26. Spouse’s, former spouse divorced, or domestic partner’s benefits. 4
26	26	(a) Spouse’s, former spouse divorced, and domestic partner’s benefits are payable 5
27	27	following the decease of a member as provided in §§ 16-16-25 — 16-16-38. 6
28	28	(b) The spouse, former spouse divorced, or domestic partner shall be entitled to benefits 7
29	29	upon attaining the age of sixty (60) years. 8
30	30	(c) The spouse, former spouse divorced, or domestic partner was living with the deceased 9
31	31	member at the time of the member’s death. A spouse, former spouse divorced, or domestic partner 10
32	32	is deemed to have been living with the deceased member if they were both members of the same 11
33	33	household on the date of the deceased member’s death, or the spouse, former spouse divorced, or 12
34	34	domestic partner was receiving contributions from the deceased member toward support on that 13
35	35	date, or the deceased member had been ordered by a court to contribute to the spouse’s, former 14
36	36	spouse divorced, or domestic partner’s support. 15
37	37	(d) Remarriage of the spouse, former spouse divorced, or domestic partner or establishment 16
38	38	of a domestic partnership shall render the person ineligible to receive current or future benefits 17
39	39	under this section. 18
40	40	(e) The spouse or domestic partner of a member, as defined in this section, shall be entitled 19
41	41
42	42
43	43	LC001005 - Page 2 of 24
44	44	to monthly benefits payable in accordance with the following table: 1
45	45	Spouse's or Domestic 2
46	46	Highest Annual Partner's Monthly 3
47	47	Salary Minimum Benefit 4
48	48	$17,000 or less $825 $1,025 5
49	49	$17,001 to $25,000 $963 $1,200 6
50	50	$25,001 to $33,000 $1,100 $1,375 7
51	51	$33,001 to $40,000 $1,238 $1,550 8
52	52	$40,001 and over $1,375 $1,725 9
53	53	(f) The former spouse divorced shall be entitled to monthly benefits, payable in accordance 10
54	54	with the table provided in subsection (e) of this section, only if there are no dependent children, 11
55	55	parents, or other spouse or domestic partner entitled to benefits. 12
56	56	(g) A yearly adjustment of the base benefit, and a yearly cost-of-living adjustment for 13
57	57	spouse’s, former spouse divorced, or domestic partner’s benefits shall be based on the annual social 14
58	58	security adjustment. 15
59	59	16-16-40. Additional benefits payable to retired teachers. 16
60	60	(a) All teachers and all beneficiaries of teachers receiving any service retirement or 17
61	61	ordinary or accidental disability retirement allowance pursuant to the provisions of this chapter and 18
62	62	chapter 17 of this title, on or before December 31, 1967, shall receive a cost of living retirement 19
63	63	adjustment equal to one and one-half percent (1.5%) per year of the original retirement allowance, 20
64	64	not compounded, for each year the retirement allowance has been in effect. For purposes of 21
65	65	computation credit shall be given for a full calendar year regardless of the effective date of the 22
66	66	retirement allowance. This cost of living retirement adjustment shall be added to the amount of the 23
67	67	service retirement allowance as of January 1, 1970, and payment shall begin as of July 1, 1970. An 24
68	68	additional cost of living retirement adjustment shall be added to the original retirement allowance 25
69	69	equal to three percent (3%) of the original retirement allowance on the first day of January, 1971, 26
70	70	and each year thereafter through December 31, 1980. 27
71	71	(b) All teachers and beneficiaries of teachers receiving any service retirement or ordinary 28
72	72	disability retirement allowance pursuant to the provisions of this title who retired on or after January 29
73	73	1, 1968, shall, on the first day of January, next following the third (3rd) year on retirement, receive 30
74	74	a cost of living adjustment, in addition to their retirement allowance, an amount equal to three 31
75	75	percent (3%) of the original retirement allowance. In each succeeding year thereafter, on the first 32
76	76	day of January, the retirement allowance shall be increased an additional three percent (3%) of the 33
77	77	original retirement allowance, not compounded, to be continued through December 31, 1980. 34
78	78
79	79
80	80	LC001005 - Page 3 of 24
81	81	(c)(1) Beginning on January 1, 1981, for all teachers and beneficiaries of teachers receiving 1
82	82	any service retirement and all teachers and all beneficiaries of teachers who have completed at least 2
83	83	ten (10) years of contributory service on or before July 1, 2005, pursuant to the provisions of this 3
84	84	chapter, and for all teachers and beneficiaries of teachers who receive a disability retirement 4
85	85	allowance pursuant to §§ 16-16-14 — 16-16-17, the cost of living adjustment shall be computed 5
86	86	and paid at the rate of three percent (3%) of the original retirement allowance or the retirement 6
87	87	allowance as computed in accordance with § 16-16-40.1, compounded annually from the year for 7
88	88	which the cost of living adjustment was determined to be payable by the retirement board pursuant 8
89	89	to the provisions of subsection (a) or (b) of this section. Such cost of living adjustments are available 9
90	90	to teachers who retire before October 1, 2009, or are eligible to retire as of September 30, 2009. 10
91	91	(2) The provisions of this subsection shall be deemed to apply prospectively only and no 11
92	92	retroactive payment shall be made. 12
93	93	(3) The retirement allowance of all teachers and all beneficiaries of teachers who have not 13
94	94	completed at least ten (10) years of contributory service on or before July 1, 2005, or were not 14
95	95	eligible to retire as of September 30, 2009, shall, on the month following the third anniversary date 15
96	96	of the retirement, and on the month following the anniversary date of each succeeding year be 16
97	97	adjusted and computed by multiplying the retirement allowance by three percent (3%) or the 17
98	98	percentage of increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published 18
99	99	by the United States Department of Labor Statistics, determined as of September 30 of the prior 19
100	100	calendar year, whichever is less; the cost of living adjustment shall be compounded annually from 20
101	101	the year for which the cost of living adjustment was determined payable by the retirement board; 21
102	102	provided, that no adjustment shall cause any retirement allowance to be decreased from the 22
103	103	retirement allowance provided immediately before such adjustment. 23
104	104	(d) For teachers not eligible to retire in accordance with this chapter as of September 30, 24
105	105	2009, and not eligible upon passage of this article, and for their beneficiaries, the cost of living 25
106	106	adjustment described in subsection (c)(3) of this section shall only apply to the first thirty-five 26
107	107	thousand dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon 27
108	108	the third (3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65), 28
109	109	whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the 29
110	110	percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published 30
111	111	by the United States Department of Labor Statistics determined as of September 30 of the prior 31
112	112	calendar year or three percent (3%), whichever is less. The first thirty-five thousand dollars 32
113	113	($35,000), as indexed, of retirement allowance shall be multiplied by the percentage of increase in 33
114	114	the Consumer Price Index for All Urban Consumers (CPI-U) as published by the United States 34
115	115
116	116
117	117	LC001005 - Page 4 of 24
118	118	Department of Labor Statistics determined as of September 30 of the prior calendar year or three 1
119	119	percent (3%), whichever is less, on the month following the anniversary date of each succeeding 2
120	120	year. For teachers eligible to retire as of September 30, 2009, or eligible upon passage of this article, 3
121	121	and for their beneficiaries, the provisions of this subsection (d) shall not apply. 4
122	122	(e) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 5
123	123	(f) This subsection (f) shall be effective for the period July 1, 2012, through June 30, 2015. 6
124	124	(1) Notwithstanding the prior paragraphs of this section, and subject to subsection (f)(2) 7
125	125	below, for all present and former teachers, active and retired teachers, and beneficiaries receiving 8
126	126	any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment 9
127	127	provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) 10
128	128	is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the 11
129	129	“subtrahend”) from the Five-Year Average Investment Return of the retirement system determined 12
130	130	as of the last day of the plan year preceding the calendar year in which the adjustment is granted, 13
131	131	said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) 14
132	132	is equal to the lesser of the teacher’s retirement allowance or the first twenty-five thousand dollars 15
133	133	($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) amount to be 16
134	134	indexed annually in the same percentage as determined under (f)(1)(A) above. The “Five-Year 17
135	135	Average Investment Return” shall mean the average of the investment returns of the most recent 18
136	136	five (5) plan years as determined by the retirement board. Subject to subsection (f)(2) below, the 19
137	137	benefit adjustment provided by this subsection (f)(1) shall commence upon the third (3rd) 20
138	138	anniversary of the date of retirement or the date on which the retiree reaches their Social Security 21
139	139	retirement age, whichever is later. In the event the retirement board adjusts the actuarially assumed 22
140	140	rate of return for the system, either upward or downward, the subtrahend shall be adjusted either 23
141	141	upward or downward in the same amount. 24
142	142	(2) Except as provided in subsection (f)(3), the benefit adjustments under this section for 25
143	143	any plan year shall be suspended in their entirety unless the funded ratio of the employees’ 26
144	144	retirement system of Rhode Island, the judicial retirement benefits trust, and the state police 27
145	145	retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 28
146	146	percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan 29
147	147	year. 30
148	148	In determining whether a funding level under this subsection (f)(2) has been achieved, the 31
149	149	actuary shall calculate the funding percentage after taking into account the reinstatement of any 32
150	150	current or future benefit adjustment provided under this section. 33
151	151	(3) Notwithstanding subsection (f)(2), in each fifth plan year commencing after June 30, 34
152	152
153	153
154	154	LC001005 - Page 5 of 24
155	155	2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 1
156	156	plan years, a benefit adjustment shall be calculated and made in accordance with subsection (f)(1) 2
157	157	above until the funded ratio of the employees’ retirement system of Rhode Island, the judicial 3
158	158	retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s 4
159	159	actuary on an aggregate basis, exceeds eighty percent (80%). 5
160	160	(4) Notwithstanding any other provisions of this chapter, the provisions of this subsection 6
161	161	(f) shall become effective July 1, 2012, and shall apply to any benefit adjustments not granted on 7
162	162	or prior to June 30, 2012. 8
163	163	(g) This subsection (g) shall become effective July 1, 2015. 9
164	164	(1)(A) As soon as administratively reasonable following the enactment into law of this 10
165	165	subsection (g)(1)(A), a one-time benefit adjustment shall be provided to teachers and/or 11
166	166	beneficiaries of teachers who retired on or before June 30, 2012, in the amount of two percent (2%) 12
167	167	of the lesser of either the teacher’s retirement allowance or the first twenty-five thousand dollars 13
168	168	($25,000) of the teacher’s retirement allowance. This one-time benefit adjustment shall be provided 14
169	169	without regard to the retiree’s age or number of years since retirement. 15
170	170	(B) Notwithstanding the prior subsections of this section, for all present and former 16
171	171	teachers, active and retired teachers, and beneficiaries receiving any retirement, disability, or death 17
172	172	allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year under 18
173	173	this section for adjustments on and after January 1, 2016, and subject to subsection (g)(2) below, 19
174	174	shall be equal to (I) multiplied by (II): 20
175	175	(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 21
176	176	(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 22
177	177	(the “subtrahend”) from the five-year average investment return of the retirement system 23
178	178	determined as of the last day of the plan year preceding the calendar year in which the adjustment 24
179	179	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 25
180	180	(0%). The “five-year average investment return” shall mean the average of the investment returns 26
181	181	of the most recent five (5) plan years as determined by the retirement board. In the event the 27
182	182	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 28
183	183	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 29
184	184	(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 30
185	185	Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor 31
186	186	Statistics determined as of September 30 of the prior calendar year. 32
187	187	In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less 33
188	188	than (0%) percent. 34
189	189
190	190
191	191	LC001005 - Page 6 of 24
192	192	(II) is equal to the lesser of either the teacher’s retirement allowance or the first twenty-1
193	193	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 2
194	194	to be indexed annually in the same percentage as determined under subsection (g)(1)(B)(I) above. 3
195	195	The benefit adjustments provided by this subsection (g)(1)(B) shall be provided to all 4
196	196	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 5
197	197	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 6
198	198	date of retirement or the date on which the retiree reaches his or her Social Security retirement age, 7
199	199	whichever is later. 8
200	200	(2) Except for teachers and/or beneficiaries of teachers who retired on or before June 30, 9
201	201	2012, the benefit adjustments under subsection (g)(1)(B) for any plan year shall be reduced to 10
202	202	twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’ 11
203	203	retirement system of Rhode Island, the judicial retirement benefits trust, and the state police 12
204	204	retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 13
205	205	percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan 14
206	206	year. Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode Island, 15
207	207	the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the 16
208	208	system’s actuary on an aggregate basis, of exceeding eighty percent (80%) for the benefit 17
209	209	adjustment to be reinstated for all teachers for such plan year shall be replaced with seventy-five 18
210	210	percent (75%). For plan year 2025, eligible retirees who retired after July 1, 2012, shall receive a 19
211	211	one-time full COLA of two and eighty-nine one hundredths percent (2.89%). 20
212	212	In determining whether a funding level under this subsection (g)(2) has been achieved, the 21
213	213	actuary shall calculate the funding percentage after taking into account the reinstatement of any 22
214	214	current or future benefit adjustment provided under this section. 23
215	215	(3) Effective for teachers and/or beneficiaries of teachers who retired after June 30, 2012, 24
216	216	or on or before June 30, 2015, the dollar amount in subsection (g)(1)(B)(II) of twenty-five thousand 25
217	217	eight hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and 26
218	218	twenty-six dollars ($31,026) until the funded ratio of the employees’ retirement system of Rhode 27
219	219	Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated 28
220	220	by the system’s actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1, 29
221	221	2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement 30
222	222	benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on 31
223	223	an aggregate basis, of exceeding eighty percent (80%) shall be replaced with seventy-five percent 32
224	224	(75%). 33
225	225	(4) Effective for teachers and/or beneficiaries of teachers who have retired on or before 34
226	226
227	227
228	228	LC001005 - Page 7 of 24
229	229	July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 1
230	230	days following the enactment of the legislation implementing this provision, and a second one-time 2
231	231	stipend of five hundred dollars ($500) in the same month of the following year. These stipends 3
232	232	shall be payable to all retired teachers or beneficiaries receiving a benefit as of the applicable 4
233	233	payment date and shall not be considered cost of living adjustments under the prior provisions of 5
234	234	this section. 6
235	235	SECTION 2. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement 7
236	236	System — Contributions and Benefits" is hereby amended to read as follows: 8
237	237	36-10-35. Additional benefits payable to retired employees. 9
238	238	(a) All state employees and all beneficiaries of state employees receiving any service 10
239	239	retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of 11
240	240	this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal 12
241	241	to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, 13
242	242	for each calendar year the retirement allowance has been in effect. For the purposes of computation, 14
243	243	credit shall be given for a full calendar year regardless of the effective date of the retirement 15
244	244	allowance. This cost of living adjustment shall be added to the amount of the retirement allowance 16
245	245	as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the 17
246	246	original retirement allowance in each succeeding year during the month of January, and provided 18
247	247	further, that this additional cost of living increase shall be three percent (3%) for the year beginning 19
248	248	January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the 20
249	249	above provisions, no employee receiving any service retirement allowance pursuant to the 21
250	250	provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive 22
251	251	any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over 23
252	252	the service retirement allowance where the employee retired prior to January 1, 1958. 24
253	253	(b) All state employees and all beneficiaries of state employees retired on or after January 25
254	254	1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement 26
255	255	allowance pursuant to the provisions of this title shall, on the first day of January next following 27
256	256	the third anniversary date of the retirement, receive a cost of living retirement adjustment, in 28
257	257	addition to their retirement allowance, in an amount equal to three percent (3%) of the original 29
258	258	retirement allowance. In each succeeding year thereafter through December 31, 1980, during the 30
259	259	month of January, the retirement allowance shall be increased an additional three percent (3%) of 31
260	260	the original retirement allowance, not compounded, to be continued during the lifetime of the 32
261	261	employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar 33
262	262	year regardless of the effective date of the service retirement allowance. 34
263	263
264	264
265	265	LC001005 - Page 8 of 24
266	266	(c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state 1
267	267	employees receiving any service retirement and all state employees, and all beneficiaries of state 2
268	268	employees, who have completed at least ten (10) years of contributory service on or before July 1, 3
269	269	2005, pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries 4
270	270	of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36-5
271	271	10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of 6
272	272	the original retirement allowance or the retirement allowance as computed in accordance with § 7
273	273	36-10-35.1, compounded annually from the year for which the cost of living adjustment was 8
274	274	determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) 9
275	275	of this section. Such cost of living adjustments are available to members who retire before October 10
276	276	1, 2009, or are eligible to retire as of September 30, 2009. 11
277	277	(2) The provisions of this subsection shall be deemed to apply prospectively only and no 12
278	278	retroactive payment shall be made. 13
279	279	(3) The retirement allowance of all state employees and all beneficiaries of state employees 14
280	280	who have not completed at least ten (10) years of contributory service on or before July 1, 2005, or 15
281	281	were not eligible to retire as of September 30, 2009, shall, on the month following the third 16
282	282	anniversary date of retirement, and on the month following the anniversary date of each succeeding 17
283	283	year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or 18
284	284	the percentage of increase in the Consumer Price Index for All Urban Consumers (CPI-U) as 19
285	285	published by the United States Department of Labor Statistics determined as of September 30 of 20
286	286	the prior calendar year, whichever is less; the cost of living adjustment shall be compounded 21
287	287	annually from the year for which the cost of living adjustment was determined payable by the 22
288	288	retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased 23
289	289	from the retirement allowance provided immediately before such adjustment. 24
290	290	(d) For state employees not eligible to retire in accordance with this chapter as of 25
291	291	September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the 26
292	292	cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first 27
293	293	thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall 28
294	294	commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches 29
295	295	age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase 30
296	296	annually by the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-31
297	297	U) as published by the United States Department of Labor Statistics determined as of September 32
298	298	30 of the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand 33
299	299	dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of 34
300	300
301	301
302	302	LC001005 - Page 9 of 24
303	303	increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published by the United 1
304	304	States Department of Labor Statistics determined as of September 30 of the prior calendar year or 2
305	305	three percent (3%), whichever is less, on the month following the anniversary date of each 3
306	306	succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon 4
307	307	passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not 5
308	308	apply. 6
309	309	(e) All legislators and all beneficiaries of legislators who are receiving a retirement 7
310	310	allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall, 8
311	311	commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a 9
312	312	retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. 10
313	313	In each succeeding year thereafter during the month of January, the retirement allowance shall be 11
314	314	increased an additional three percent (3%) of the original retirement allowance, compounded 12
315	315	annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of 13
316	316	computation, credit shall be given for a full calendar year regardless of the effective date of the 14
317	317	service retirement allowance. 15
318	318	(f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. 16
319	319	(g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015. 17
320	320	(1) Notwithstanding the prior paragraphs of this section, and subject to subsection (g)(2) 18
321	321	below, for all present and former employees, active and retired members, and beneficiaries 19
322	322	receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit 20
323	323	adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) 21
324	324	where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 22
325	325	(the “subtrahend”) from the Five-Year Average Investment Return of the retirement system 23
326	326	determined as of the last day of the plan year preceding the calendar year in which the adjustment 24
327	327	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 25
328	328	(0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five 26
329	329	thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) 27
330	330	amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The 28
331	331	“Five-Year Average Investment Return” shall mean the average of the investment returns of the 29
332	332	most recent five (5) plan years as determined by the retirement board. Subject to subsection (g)(2) 30
333	333	below, the benefit adjustment provided by this subsection (g)(1) shall commence upon the third 31
334	334	(3rd) anniversary of the date of retirement or the date on which the retiree reaches their Social 32
335	335	Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 33
336	336	assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 34
337	337
338	338
339	339	LC001005 - Page 10 of 24
340	340	either upward or downward in the same amount. 1
341	341	(2) Except as provided in subsection (g)(3), the benefit adjustments under this section for 2
342	342	any plan year shall be suspended in their entirety unless the funded ratio of the employees’ 3
343	343	retirement system of Rhode Island, the judicial retirement benefits trust, and the state police 4
344	344	retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 5
345	345	percent (80%) in which event the benefit adjustment will be reinstated for all members for such 6
346	346	plan year. 7
347	347	In determining whether a funding level under this subsection (g)(2) has been achieved, the 8
348	348	actuary shall calculate the funding percentage after taking into account the reinstatement of any 9
349	349	current or future benefit adjustment provided under this section. 10
350	350	(3) Notwithstanding subsection (g)(2), in each fifth plan year commencing after June 30, 11
351	351	2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 12
352	352	plan years, a benefit adjustment shall be calculated and made in accordance with subsection (g)(1) 13
353	353	above until the funded ratio of the employees’ retirement system of Rhode Island, the judicial 14
354	354	retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s 15
355	355	actuary on an aggregate basis, exceeds eighty percent (80%). 16
356	356	(4) Notwithstanding any other provision of this chapter, the provisions of this subsection 17
357	357	(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or 18
358	358	prior to June 30, 2012. 19
359	359	(h) This subsection (h) shall become effective July 1, 2015. 20
360	360	(1)(A) As soon as administratively reasonable following the enactment into law of this 21
361	361	subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or 22
362	362	beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent 23
363	363	(2%) of the lesser of either the member’s retirement allowance or the first twenty-five thousand 24
364	364	dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be 25
365	365	provided without regard to the retiree’s age or number of years since retirement. 26
366	366	(B) Notwithstanding the prior subsections of this section, for all present and former 27
367	367	employees, active and retired members, and beneficiaries receiving any retirement, disability or 28
368	368	death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 29
369	369	under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2) 30
370	370	below, shall be equal to (I) multiplied by (II): 31
371	371	(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 32
372	372	(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 33
373	373	(the “subtrahend”) from the five-year average investment return of the retirement system 34
374	374
375	375
376	376	LC001005 - Page 11 of 24
377	377	determined as of the last day of the plan year preceding the calendar year in which the adjustment 1
378	378	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 2
379	379	(0%). The “five-year average investment return” shall mean the average of the investment returns 3
380	380	of the most recent five (5) plan years as determined by the retirement board. In the event the 4
381	381	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 5
382	382	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 6
383	383	(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 7
384	384	Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor 8
385	385	Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) 9
386	386	plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%). 10
387	387	(II) is equal to the lesser of either the member’s retirement allowance or the first twenty-11
388	388	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 12
389	389	to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above. 13
390	390	The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all 14
391	391	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 15
392	392	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 16
393	393	date of retirement or the date on which the retiree reaches their Social Security retirement age, 17
394	394	whichever is later. 18
395	395	(2) Except for members and/or beneficiaries of members who retired on or before June 30, 19
396	396	2012, the benefit adjustments under subsection (h)(1)(B) for any plan year shall be reduced to 20
397	397	twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’ 21
398	398	retirement system of Rhode Island, the judicial retirement benefits trust, and the state police 22
399	399	retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty 23
400	400	percent (80%) in which event the benefit adjustment will be reinstated for all members for such 24
401	401	plan year. Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode 25
402	402	Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated 26
403	403	by the system’s actuary on an aggregate basis, of exceeding eighty percent (80%) for the benefit 27
404	404	adjustment to be reinstated for all members for such plan year shall be replaced with seventy-five 28
405	405	percent (75%). For plan year 2025, eligible retirees who retired after July 1, 2012, shall receive a 29
406	406	one-time full COLA of two and eighty-nine one hundredths percent (2.89%). 30
407	407	In determining whether a funding level under this subsection (h)(2) has been achieved, the 31
408	408	actuary shall calculate the funding percentage after taking into account the reinstatement of any 32
409	409	current or future benefit adjustment provided under this section. 33
410	410	(3) Effective for members and/or beneficiaries of members who retired after June 30, 2012, 34
411	411
412	412
413	413	LC001005 - Page 12 of 24
414	414	or on or before June 30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand 1
415	415	eight hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and 2
416	416	twenty-six dollars ($31,026) until the funded ratio of the employees’ retirement system of Rhode 3
417	417	Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated 4
418	418	by the system’s actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1, 5
419	419	2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement 6
420	420	benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on 7
421	421	an aggregate basis, of exceeding eighty percent (80%) shall be replaced with seventy-five percent 8
422	422	(75%). 9
423	423	(i) Effective for members and/or beneficiaries of members who have retired on or before 10
424	424	July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 11
425	425	days following the enactment of the legislation implementing this provision, and a second one-time 12
426	426	stipend of five hundred dollars ($500) in the same month of the following year. These stipends 13
427	427	shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 14
428	428	payment date and shall not be considered cost of living adjustments under the prior provisions of 15
429	429	this section. 16
430	430	SECTION 3. Section 44-30-12 of the General Laws in Chapter 44-30 entitled "Personal 17
431	431	Income Tax" is hereby amended to read as follows: 18
432	432	44-30-12. Rhode Island income of a resident individual. [Effective January 1, 2025.] 19
433	433	(a) General. The Rhode Island income of a resident individual means the individual’s 20
434	434	adjusted gross income for federal income tax purposes, with the modifications specified in this 21
435	435	section. 22
436	436	(b) Modifications increasing federal adjusted gross income. There shall be added to 23
437	437	federal adjusted gross income: 24
438	438	(1) Interest income on obligations of any state, or its political subdivisions, other than 25
439	439	Rhode Island or its political subdivisions; 26
440	440	(2) Interest or dividend income on obligations or securities of any authority, commission, 27
441	441	or instrumentality of the United States, but not of Rhode Island or its political subdivisions, to the 28
442	442	extent exempted by the laws of the United States from federal income tax but not from state income 29
443	443	taxes; 30
444	444	(3) The modification described in § 44-30-25(g); 31
445	445	(4)(i) The amount defined below of a nonqualified withdrawal made from an account in 32
446	446	the tuition savings program pursuant to § 16-57-6.1. For purposes of this section, a nonqualified 33
447	447	withdrawal is: 34
448	448
449	449
450	450	LC001005 - Page 13 of 24
451	451	(A) A transfer or rollover to a qualified tuition program under Section 529 of the Internal 1
452	452	Revenue Code, 26 U.S.C. § 529, other than to the tuition savings program referred to in § 16-57-2
453	453	6.1; and 3
454	454	(B) A withdrawal or distribution that is: 4
455	455	(I) Not applied on a timely basis to pay “qualified higher education expenses” as defined 5
456	456	in § 16-57-3(12) of the beneficiary of the account from which the withdrawal is made; 6
457	457	(II) Not made for a reason referred to in § 16-57-6.1(e); or 7
458	458	(III) Not made in other circumstances for which an exclusion from tax made applicable by 8
459	459	Section 529 of the Internal Revenue Code, 26 U.S.C. § 529, pertains if the transfer, rollover, 9
460	460	withdrawal, or distribution is made within two (2) taxable years following the taxable year for 10
461	461	which a contributions modification pursuant to subsection (c)(4) of this section is taken based on 11
462	462	contributions to any tuition savings program account by the person who is the participant of the 12
463	463	account at the time of the contribution, whether or not the person is the participant of the account 13
464	464	at the time of the transfer, rollover, withdrawal, or distribution; 14
465	465	(ii) In the event of a nonqualified withdrawal under subsection (b)(4)(i)(A) or (b)(4)(i)(B) 15
466	466	of this section, there shall be added to the federal adjusted gross income of that person for the 16
467	467	taxable year of the withdrawal an amount equal to the lesser of: 17
468	468	(A) The amount equal to the nonqualified withdrawal reduced by the sum of any 18
469	469	administrative fee or penalty imposed under the tuition savings program in connection with the 19
470	470	nonqualified withdrawal plus the earnings portion thereof, if any, includible in computing the 20
471	471	person’s federal adjusted gross income for the taxable year; and 21
472	472	(B) The amount of the person’s contribution modification pursuant to subsection (c)(4) of 22
473	473	this section for the person’s taxable year of the withdrawal and the two (2) prior taxable years less 23
474	474	the amount of any nonqualified withdrawal for the two (2) prior taxable years included in 24
475	475	computing the person’s Rhode Island income by application of this subsection for those years. Any 25
476	476	amount added to federal adjusted gross income pursuant to this subdivision shall constitute Rhode 26
477	477	Island income for residents, nonresidents, and part-year residents; 27
478	478	(5) The modification described in § 44-30-25.1(d)(3)(i); 28
479	479	(6) The amount equal to any unemployment compensation received but not included in 29
480	480	federal adjusted gross income; 30
481	481	(7) The amount equal to the deduction allowed for sales tax paid for a purchase of a 31
482	482	qualified motor vehicle as defined by the Internal Revenue Code § 164(a)(6); and 32
483	483	(8) For any taxable year beginning on or after January 1, 2020, the amount of any Paycheck 33
484	484	Protection Program loan forgiven for federal income tax purposes as authorized by the Coronavirus 34
485	485
486	486
487	487	LC001005 - Page 14 of 24
488	488	Aid, Relief, and Economic Security Act and/or the Consolidated Appropriations Act, 2021 and/or 1
489	489	any other subsequent federal stimulus relief packages enacted by law, to the extent that the amount 2
490	490	of the loan forgiven exceeds $250,000, including an individual’s distributive share of the amount 3
491	491	of a pass-through entity’s loan forgiveness in excess of $250,000. 4
492	492	(c) Modifications reducing federal adjusted gross income. There shall be subtracted 5
493	493	from federal adjusted gross income: 6
494	494	(1) Any interest income on obligations of the United States and its possessions to the extent 7
495	495	includible in gross income for federal income tax purposes, and any interest or dividend income on 8
496	496	obligations, or securities of any authority, commission, or instrumentality of the United States to 9
497	497	the extent includible in gross income for federal income tax purposes but exempt from state income 10
498	498	taxes under the laws of the United States; provided, that the amount to be subtracted shall in any 11
499	499	case be reduced by any interest on indebtedness incurred or continued to purchase or carry 12
500	500	obligations or securities the income of which is exempt from Rhode Island personal income tax, to 13
501	501	the extent the interest has been deducted in determining federal adjusted gross income or taxable 14
502	502	income; 15
503	503	(2) A modification described in § 44-30-25(f) or § 44-30-1.1(c)(1); 16
504	504	(3) The amount of any withdrawal or distribution from the “tuition savings program” 17
505	505	referred to in § 16-57-6.1 that is included in federal adjusted gross income, other than a withdrawal 18
506	506	or distribution or portion of a withdrawal or distribution that is a nonqualified withdrawal; 19
507	507	(4) Contributions made to an account under the tuition savings program, including the 20
508	508	“contributions carryover” pursuant to subsection (c)(4)(iv) of this section, if any, subject to the 21
509	509	following limitations, restrictions, and qualifications: 22
510	510	(i) The aggregate subtraction pursuant to this subdivision for any taxable year of the 23
511	511	taxpayer shall not exceed five hundred dollars ($500) or one thousand dollars ($1,000) if a joint 24
512	512	return; 25
513	513	(ii) The following shall not be considered contributions: 26
514	514	(A) Contributions made by any person to an account who is not a participant of the account 27
515	515	at the time the contribution is made; 28
516	516	(B) Transfers or rollovers to an account from any other tuition savings program account or 29
517	517	from any other “qualified tuition program” under section 529 of the Internal Revenue Code, 26 30
518	518	U.S.C. § 529; or 31
519	519	(C) A change of the beneficiary of the account; 32
520	520	(iii) The subtraction pursuant to this subdivision shall not reduce the taxpayer’s federal 33
521	521	adjusted gross income to less than zero (0); 34
522	522
523	523
524	524	LC001005 - Page 15 of 24
525	525	(iv) The contributions carryover to a taxable year for purpose of this subdivision is the 1
526	526	excess, if any, of the total amount of contributions actually made by the taxpayer to the tuition 2
527	527	savings program for all preceding taxable years for which this subsection is effective over the sum 3
528	528	of: 4
529	529	(A) The total of the subtractions under this subdivision allowable to the taxpayer for all 5
530	530	such preceding taxable years; and 6
531	531	(B) That part of any remaining contribution carryover at the end of the taxable year which 7
532	532	exceeds the amount of any nonqualified withdrawals during the year and the prior two (2) taxable 8
533	533	years not included in the addition provided for in this subdivision for those years. Any such part 9
534	534	shall be disregarded in computing the contributions carryover for any subsequent taxable year; 10
535	535	(v) For any taxable year for which a contributions carryover is applicable, the taxpayer 11
536	536	shall include a computation of the carryover with the taxpayer’s Rhode Island personal income tax 12
537	537	return for that year, and if for any taxable year on which the carryover is based the taxpayer filed a 13
538	538	joint Rhode Island personal income tax return but filed a return on a basis other than jointly for a 14
539	539	subsequent taxable year, the computation shall reflect how the carryover is being allocated between 15
540	540	the prior joint filers; 16
541	541	(5) The modification described in § 44-30-25.1(d)(1); 17
542	542	(6) Amounts deemed taxable income to the taxpayer due to payment or provision of 18
543	543	insurance benefits to a dependent, including a domestic partner pursuant to chapter 12 of title 36 or 19
544	544	other coverage plan; 20
545	545	(7) Modification for organ transplantation. 21
546	546	(i) An individual may subtract up to ten thousand dollars ($10,000) from federal adjusted 22
547	547	gross income if the individual, while living, donates one or more of their human organs to another 23
548	548	human being for human organ transplantation, except that for purposes of this subsection, “human 24
549	549	organ” means all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow. A subtract 25
550	550	modification that is claimed hereunder may be claimed in the taxable year in which the human 26
551	551	organ transplantation occurs. 27
552	552	(ii) An individual may claim that subtract modification hereunder only once, and the 28
553	553	subtract modification may be claimed for only the following unreimbursed expenses that are 29
554	554	incurred by the claimant and related to the claimant’s organ donation: 30
555	555	(A) Travel expenses. 31
556	556	(B) Lodging expenses. 32
557	557	(C) Lost wages. 33
558	558	(iii) The subtract modification hereunder may not be claimed by a part-time resident or a 34
559	559
560	560
561	561	LC001005 - Page 16 of 24
562	562	nonresident of this state; 1
563	563	(8) Modification for taxable Social Security income. 2
564	564	(i) For tax years beginning on or after January 1, 2016: 3
565	565	(A) For a person who has attained the age used for calculating full or unreduced Social 4
566	566	Security retirement benefits who files a return as an unmarried individual, head of household, or 5
567	567	married filing separate whose federal adjusted gross income for the taxable year is less than eighty 6
568	568	thousand dollars ($80,000); or 7
569	569	(B) A married individual filing jointly or individual filing qualifying widow(er) who has 8
570	570	attained the age used for calculating full or unreduced Social Security retirement benefits whose 9
571	571	joint federal adjusted gross income for the taxable year is less than one hundred thousand dollars 10
572	572	($100,000), an amount equal to the Social Security benefits includible in federal adjusted gross 11
573	573	income. 12
574	574	(ii) Adjustment for inflation. The dollar amount contained in subsections (c)(8)(i)(A) and 13
575	575	(c)(8)(i)(B) of this section shall be increased annually by an amount equal to: 14
576	576	(A) Such dollar amount contained in subsections (c)(8)(i)(A) and (c)(8)(i)(B) of this section 15
577	577	adjusted for inflation using a base tax year of 2000, multiplied by; 16
578	578	(B) The cost-of-living adjustment with a base year of 2000. 17
579	579	(iii) For the purposes of this section the cost-of-living adjustment for any calendar year is 18
580	580	the percentage (if any) by which the consumer price index for the preceding calendar year exceeds 19
581	581	the consumer price index for the base year. The consumer price index for any calendar year is the 20
582	582	average of the consumer price index as of the close of the twelve-month (12) period ending on 21
583	583	August 31, of such calendar year. 22
584	584	(iv) For the purpose of this section the term “consumer price index” means the last 23
585	585	consumer price index for all urban consumers published by the department of labor. For the purpose 24
586	586	of this section the revision of the consumer price index which is most consistent with the consumer 25
587	587	price index for calendar year 1986 shall be used. 26
588	588	(v) If any increase determined under this section is not a multiple of fifty dollars ($50.00), 27
589	589	such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a 28
590	590	married individual filing separate return, if any increase determined under this section is not a 29
591	591	multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple 30
592	592	of twenty-five dollars ($25.00); 31
593	593	(9) Modification of taxable retirement income from certain pension plans or 32
594	594	annuities. 33
595	595	(i) For tax years beginning on or after January 1, 2017, until the tax year beginning January 34
596	596
597	597
598	598	LC001005 - Page 17 of 24
599	599	1, 2022, a modification shall be allowed for up to fifteen thousand dollars ($15,000), and for tax 1
600	600	years beginning on or after January 1, 2023, until the tax year beginning January 1, 2024, a 2
601	601	modification shall be allowed for up to twenty thousand dollars ($20,000), and for tax years 3
602	602	beginning on or after January 1, 2025, a modification shall be allowed for up to fifty thousand 4
603	603	dollars ($50,000), of taxable pension and/or annuity income that is included in federal adjusted 5
604	604	gross income for the taxable year: 6
605	605	(A) For a person who has attained the age used for calculating full or unreduced Social 7
606	606	Security retirement benefits who files a return as an unmarried individual, head of household, or 8
607	607	married filing separate whose federal adjusted gross income for such taxable year is less than the 9
608	608	amount used for the modification contained in subsection (c)(8)(i)(A) of this section an amount not 10
609	609	to exceed $15,000 for tax years beginning on or after January 1, 2017, until the tax year beginning 11
610	610	January 1, 2022, and an amount not to exceed twenty thousand dollars ($20,000) for tax years 12
611	611	beginning on or after January 1, 2023, until the tax year beginning January 1, 2024, and an amount 13
612	612	not to exceed fifty thousand dollars ($50,000) for tax years beginning on or after January 1, 2025, 14
613	613	of taxable pension and/or annuity income includible in federal adjusted gross income; or 15
614	614	(B) For a married individual filing jointly or individual filing qualifying widow(er) who 16
615	615	has attained the age used for calculating full or unreduced Social Security retirement benefits whose 17
616	616	joint federal adjusted gross income for such taxable year is less than the amount used for the 18
617	617	modification contained in subsection (c)(8)(i)(B) of this section an amount not to exceed $15,000 19
618	618	for tax years beginning on or after January 1, 2017, until the tax year beginning January 1, 2022, 20
619	619	and an amount not to exceed twenty thousand dollars ($20,000) for tax years beginning on or after 21
620	620	January 1, 2023, until the tax year beginning January 1, 2024, and an amount not to exceed fifty 22
621	621	thousand dollars ($50,000) for tax years beginning on or after January 1, 2025, of taxable pension 23
622	622	and/or annuity income includible in federal adjusted gross income. 24
623	623	(ii) Adjustment for inflation. The dollar amount contained by reference in subsections 25
624	624	(c)(9)(i)(A) and (c)(9)(i)(B) of this section shall be increased annually for tax years beginning on 26
625	625	or after January 1, 2018, by an amount equal to: 27
626	626	(A) Such dollar amount contained by reference in subsections (c)(9)(i)(A) and (c)(9)(i)(B) 28
627	627	of this section adjusted for inflation using a base tax year of 2000, multiplied by; 29
628	628	(B) The cost-of-living adjustment with a base year of 2000. 30
629	629	(iii) For the purposes of this section, the cost-of-living adjustment for any calendar year is 31
630	630	the percentage (if any) by which the consumer price index for the preceding calendar year exceeds 32
631	631	the consumer price index for the base year. The consumer price index for any calendar year is the 33
632	632	average of the consumer price index as of the close of the twelve-month (12) period ending on 34
633	633
634	634
635	635	LC001005 - Page 18 of 24
636	636	August 31, of such calendar year. 1
637	637	(iv) For the purpose of this section, the term “consumer price index” means the last 2
638	638	consumer price index for all urban consumers published by the department of labor. For the purpose 3
639	639	of this section, the revision of the consumer price index which is most consistent with the consumer 4
640	640	price index for calendar year 1986 shall be used. 5
641	641	(v) If any increase determined under this section is not a multiple of fifty dollars ($50.00), 6
642	642	such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a 7
643	643	married individual filing a separate return, if any increase determined under this section is not a 8
644	644	multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple 9
645	645	of twenty-five dollars ($25.00). 10
646	646	(vi) For tax years beginning on or after January 1, 2022, the dollar amount contained by 11
647	647	reference in subsection (c)(9)(i)(A) shall be adjusted to equal the dollar amount contained in 12
648	648	subsection (c)(8)(i)(A), as adjusted for inflation, and the dollar amount contained by reference in 13
649	649	subsection(c)(9)(i)(B) shall be adjusted to equal the dollar amount contained in subsection 14
650	650	(c)(8)(i)(B), as adjusted for inflation; 15
651	651	(10) Modification for Rhode Island investment in opportunity zones. For purposes of 16
652	652	a taxpayer’s state tax liability, in the case of any investment in a Rhode Island opportunity zone by 17
653	653	the taxpayer for at least seven (7) years, a modification to income shall be allowed for the 18
654	654	incremental difference between the benefit allowed under 26 U.S.C. § 1400Z-2(b)(2)(B)(iv) and 19
655	655	the federal benefit allowed under 26 U.S.C. § 1400Z-2(c); 20
656	656	(11) Modification for military service pensions. 21
657	657	(i) For purposes of a taxpayer’s state tax liability, a modification to income shall be allowed 22
658	658	as follows: 23
659	659	(A) For the tax years beginning on January 1, 2023, a taxpayer may subtract from federal 24
660	660	adjusted gross income the taxpayer’s military service pension benefits included in federal adjusted 25
661	661	gross income; 26
662	662	(ii) As used in this subsection, the term “military service” shall have the same meaning as 27
663	663	set forth in 20 C.F.R. § 212.2; 28
664	664	(iii) At no time shall the modification allowed under this subsection alone or in conjunction 29
665	665	with subsection (c)(9) exceed the amount of the military service pension received in the tax year 30
666	666	for which the modification is claimed; 31
667	667	(12) Any rebate issued to the taxpayer pursuant to § 44-30-103 to the extent included in 32
668	668	gross income for federal tax purposes; and 33
669	669	(13) For tax years beginning on or after January 1, 2025, in the case of a taxpayer that is 34
670	670
671	671
672	672	LC001005 - Page 19 of 24
673	673	licensed in accordance with chapters 28.6 and/or 28.11 of title 21, the amount equal to any 1
674	674	expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed under 2
675	675	26 U.S.C. § 280E; and 3
676	676	(14) The amount received from public pension benefits administered by the Employees 4
677	677	Retirement System of Rhode Island. 5
678	678	(d) Modification for Rhode Island fiduciary adjustment. There shall be added to, or 6
679	679	subtracted from, federal adjusted gross income (as the case may be) the taxpayer’s share, as 7
680	680	beneficiary of an estate or trust, of the Rhode Island fiduciary adjustment determined under § 44-8
681	681	30-17. 9
682	682	(e) Partners. The amounts of modifications required to be made under this section by a 10
683	683	partner, which relate to items of income or deduction of a partnership, shall be determined under § 11
684	684	44-30-15. 12
685	685	SECTION 4. Section 45-21-52 of the General Laws in Chapter 45-21 entitled "Retirement 13
686	686	of Municipal Employees" is hereby amended to read as follows: 14
687	687	45-21-52. Automatic increase in service retirement allowance. 15
688	688	(a) The local legislative bodies of the cities and towns may extend to their respective 16
689	689	employees automatic adjustment increases in their service retirement allowances, by a resolution 17
690	690	accepting any of the plans described in this section: 18
691	691	(1) Plan A. All employees and beneficiaries of those employees receiving a service 19
692	692	retirement or disability retirement allowance under the provisions of this chapter on December 31 20
693	693	of the year their city or town accepts this section, receive a cost of living adjustment equal to one 21
694	694	and one-half percent (1.5%) per year of the original retirement allowance, not compounded, for 22
695	695	each calendar year the retirement allowance has been in effect. This cost of living adjustment is 23
696	696	added to the amount of the retirement allowance as of January 1 following acceptance of this 24
697	697	provision, and an additional one and one-half percent (1.5%) is added to the original retirement 25
698	698	allowance in each succeeding year during the month of January, and provided, further, that this 26
699	699	additional cost of living increase is three percent (3%) for the year beginning January 1 of the year 27
700	700	the plan is accepted and each succeeding year. 28
701	701	(2) Plan B. All employees and beneficiaries of those employees receiving a retirement 29
702	702	allowance under the provisions of this chapter on December 31 of the year their municipality 30
703	703	accepts this section, receive a cost of living adjustment equal to three percent (3%) of their original 31
704	704	retirement allowance. This adjustment is added to the amount of the retirement allowance as of 32
705	705	January 1 following acceptance of this provision, and an additional three percent (3%) of the 33
706	706	original retirement allowance, not compounded, is payable in each succeeding year in the month 34
707	707
708	708
709	709	LC001005 - Page 20 of 24
710	710	of January. 1
711	711	(3) Plan C. All employees and beneficiaries of those employees who retire on or after 2
712	712	January 1 of the year following acceptance of this section, on the first day of January next following 3
713	713	the date of the retirement, receive a cost of living adjustment in an amount equal to three percent 4
714	714	(3%) of the original retirement allowance. 5
715	715	(b) In each succeeding year in the month of January, the retirement allowance is increased 6
716	716	an additional three percent (3%) of the original retirement allowance, not compounded. 7
717	717	(c) This subsection (c) shall be effective for the period July 1, 2012, through June 30, 2015. 8
718	718	(1) Notwithstanding any other subsections of this section, and subject to subsection (c)(2) 9
719	719	below, for all present and former employees, active and retired members, and beneficiaries 10
720	720	receiving any retirement, disability or death allowance or benefit of any kind by reason of adoption 11
721	721	of this section by their employer, the annual benefit adjustment provided in any calendar year under 12
722	722	this section shall be equal to (A) multiplied by (B) where (A) is equal to the percentage determined 13
723	723	by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the Five-Year Average 14
724	724	Investment Return of the retirement system determined as of the last day of the plan year preceding 15
725	725	the calendar year in which the adjustment is granted, said percentage not to exceed four percent 16
726	726	(4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of the member’s 17
727	727	retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement allowance, 18
728	728	such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same percentage 19
729	729	as determined under (c)(1)(A) above. The “Five-Year Average Investment Return” shall mean the 20
730	730	average of the investment returns of the most recent five (5) plan years as determined by the 21
731	731	retirement board. Subject to subsection (c)(2) below, the benefit adjustment provided by this 22
732	732	subsection (c)(1) shall commence upon the third (3rd) anniversary of the date of retirement or the 23
733	733	date on which the retiree reaches their Social Security retirement age, whichever is later; or for 24
734	734	municipal police and fire retiring under the provisions of chapter 21.2 of this title, the benefit 25
735	735	adjustment provided by this subsection (c)(1) shall commence on the later of the third (3rd) 26
736	736	anniversary of the date of retirement or the date on which the retiree reaches age fifty-five (55). In 27
737	737	the event the retirement board adjusts the actuarially assumed rate of return for the system, either 28
738	738	upward or downward, the subtrahend shall be adjusted either upward or downward in the same 29
739	739	amount. 30
740	740	(2) Except as provided in subsection (c)(3) the benefit adjustments provided under this 31
741	741	section for any plan year shall be reduced to twenty-five percent (25%) of the benefit adjustment 32
742	742	for each municipal plan within the municipal employees’ retirement system unless the municipal 33
743	743	plan is determined to be funded at a Funded Ratio equal to or greater than eighty percent (80%) as 34
744	744
745	745
746	746	LC001005 - Page 21 of 24
747	747	of the end of the immediately preceding plan year in accordance with the retirement system’s 1
748	748	actuarial valuation report as prepared by the system’s actuary, in which event the benefit adjustment 2
749	749	will be reinstated for all members for such plan year. 3
750	750	In determining whether a funding level under this subsection (c)(2) has been achieved, the 4
751	751	actuary shall calculate the funding percentage after taking into account the reinstatement of any 5
752	752	current or future benefit adjustment provided under this section. 6
753	753	(3) Notwithstanding subsection (c)(2), for each municipal plan that has a Funded Ratio of 7
754	754	less than eighty percent (80%) as of June 30, 2012, in each fifth plan year commencing after June 8
755	755	30, 2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of 9
756	756	five (5) plan years, a benefit adjustment shall be calculated and made in accordance with subsection 10
757	757	(c)(1) above until the municipal plan’s Funded Ratio exceeds eighty percent (80%). 11
758	758	(d) This subsection (d) shall become effective July 1, 2015. 12
759	759	(1)(A) As soon as administratively reasonable following the enactment into law of this 13
760	760	subsection (d)(1)(A), a one-time benefit adjustment shall be provided to members and/or 14
761	761	beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent 15
762	762	(2%) of the lesser of either the employee’s retirement allowance or the first twenty-five thousand 16
763	763	dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be 17
764	764	provided without regard to the retiree’s age or number of years since retirement. 18
765	765	(B) Notwithstanding the prior subsections of this section, for all present and former 19
766	766	employees, active and retired employees, and beneficiaries receiving any retirement, disability or 20
767	767	death allowance or benefit of any kind by reason of adoption of this section by their employer, the 21
768	768	annual benefit adjustment provided in any calendar year under this section for adjustments on and 22
769	769	after January 1, 2016, and subject to subsection (d)(2) below, shall be equal to (I) multiplied by 23
770	770	(II): 24
771	771	(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 25
772	772	(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 26
773	773	(the “subtrahend”) from the five-year average investment return of the retirement system 27
774	774	determined as of the last day of the plan year preceding the calendar year in which the adjustment 28
775	775	is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 29
776	776	(0%). The “five-year average investment return” shall mean the average of the investment returns 30
777	777	of the most recent five (5) plan years as determined by the retirement board. In the event the 31
778	778	retirement board adjusts the actuarially assumed rate of return for the system, either upward or 32
779	779	downward, the subtrahend shall be adjusted either upward or downward in the same amount. 33
780	780	(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 34
781	781
782	782
783	783	LC001005 - Page 22 of 24
784	784	Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor 1
785	785	Statistics determined as of September 30 of the prior calendar year. 2
786	786	In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less 3
787	787	than zero percent (0%). 4
788	788	(II) is equal to the lesser of either the member’s retirement allowance or the first twenty-5
789	789	five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 6
790	790	to be indexed annually in the same percentage as determined under (d)(1)(B)(I) above. 7
791	791	The benefit adjustments provided by this subsection (d)(1)(B) shall be provided to all 8
792	792	retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, 9
793	793	and for all other retirees the benefit adjustments shall commence upon the third anniversary of the 10
794	794	date of retirement or the date on which the retiree reaches their Social Security retirement age, 11
795	795	whichever is later; or for municipal police and fire retiring under the provisions of § 45-21.2-12
796	796	5(b)(1)(A), the benefit adjustment provided by this subsection (d)(1)(B) shall commence on the 13
797	797	later of the third anniversary of the date of retirement or the date on which the retiree reaches age 14
798	798	fifty-five (55); or for municipal police and fire retiring under the provisions of § 45-21.2-5(b)(1)(B), 15
799	799	the benefit adjustment provided by this subsection (d)(1)(B) shall commence on the later of the 16
800	800	third anniversary of the date of retirement or the date on which the retiree reaches age fifty (50). 17
801	801	(2) Except for municipal employees and/or beneficiaries of municipal employees who 18
802	802	retired on or before June 30, 2012, the benefit adjustments under subsection (d)(1)(B) for any plan 19
803	803	year shall be reduced to twenty-five percent (25%) of the benefit adjustment for each municipal 20
804	804	plan within the municipal employees’ retirement system unless the municipal plan is determined to 21
805	805	be funded at a funded ratio equal to or greater than eighty percent (80%) as of the end of the 22
806	806	immediately preceding plan year in accordance with the retirement system’s actuarial valuation 23
807	807	report as prepared by the system’s actuary, in which event the benefit adjustment will be reinstated 24
808	808	for all members for such plan year. Effective July 1, 2024, the funded ratio for each municipal plan 25
809	809	within the municipal employees’ retirement system, calculated by the system’s actuary, of equal to 26
810	810	or greater than eighty percent (80%) for the benefit adjustment to be reinstated for all members for 27
811	811	such plan year shall be replaced with seventy-five percent (75%). For plan year 2025, eligible 28
812	812	retirees who retired after July 1, 2012, shall receive a one-time full COLA of two and eighty-nine 29
813	813	one hundredths percent (2.89%). 30
814	814	In determining whether a funding level under this subsection (d)(2) has been achieved, the 31
815	815	actuary shall calculate the funding percentage after taking into account the reinstatement of any 32
816	816	current or future benefit adjustment provided under this section. 33
817	817	(3) Effective for members and/or beneficiaries of members who retired after June 30, 2012, 34
818	818
819	819
820	820	LC001005 - Page 23 of 24
821	821	or on or before June 30, 2015, the dollar amount in (d)(1)(B)(II) of twenty-five thousand eight 1
822	822	hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 2
823	823	dollars ($31,026) until the municipal plan’s funded ratio exceeds eighty percent (80%). Effective 3
824	824	July 1, 2024, the funded ratio for each municipal plan within the municipal employees’ retirement 4
825	825	system, calculated by the system’s actuary, of exceeding eighty percent (80%) for the benefit 5
826	826	adjustment to be reinstated for all members for such plan year shall be replaced with seventy-five 6
827	827	percent (75%). 7
828	828	(e) Upon acceptance of any of the plans in this section, each employee shall on January 1 8
829	829	next succeeding the acceptance, contribute by means of salary deductions, pursuant to § 45-21-41, 9
830	830	one percent (1%) of the employee’s compensation concurrently with and in addition to 10
831	831	contributions otherwise being made to the retirement system. 11
832	832	(f) The city or town shall make any additional contributions to the system, pursuant to the 12
833	833	terms of § 45-21-42, for the payment of any benefits provided by this section. 13
834	834	(g) The East Greenwich town council shall be allowed to accept Plan C of subsection (a)(3) 14
835	835	of this section for all employees of the town of East Greenwich who either, pursuant to contract 15
836	836	negotiations, bargain for Plan C, or who are non-union employees who are provided with Plan C 16
837	837	and who shall all collectively be referred to as the “Municipal-COLA Group” and shall be separate 17
838	838	from all other employees of the town and school department, union or non-union, who are in the 18
839	839	same pension group but have not been granted Plan C benefits. Upon acceptance by the town 19
840	840	council, benefits in accordance with this section shall be available to all such employees who retire 20
841	841	on or after January 1, 2003. 21
842	842	(h) Effective for members and/or beneficiaries of members who have retired on or before 22
843	843	July 1, 2015, and without regard to whether the retired member or beneficiary is receiving a benefit 23
844	844	adjustment under this section, a one-time stipend of five hundred dollars ($500) shall be payable 24
845	845	within sixty (60) days following the enactment of the legislation implementing this provision, and 25
846	846	a second one-time stipend of five hundred dollars ($500) in the same month of the following year. 26
847	847	These stipends shall not be considered cost of living adjustments under the prior provisions of this 27
848	848	section. 28
849	849	SECTION 5. This act shall take effect upon passage. 29
850	850	========
851	851	LC001005
852	852	========
853	853
854	854
855	855	LC001005 - Page 24 of 24
856	856	EXPLANATION
857	857	BY THE LEGISLATIVE COUNCIL
858	858	OF
859	859	A N A C T
860	860	RELATING TO EDUCATION -- TEACHER'S RETIREMENT
861	861	***
862	862	This act would increase the monthly minimum benefit for a spouse, domestic partner or 1
863	863	former spouse and grant, to eligible retirees who retired after July 1, 2012, and provide a one-time 2
864	864	full COLA of two and eighty-nine one hundredths percent (2.89%). This act would further provide 3
865	865	a modification reducing federal adjusted gross income for the amount received of public pension 4
866	866	benefits administered by the Employees Retirement System of Rhode Island. 5
867	867	This act would take effect upon passage. 6
868	868	========
869	869	LC001005
870	870	========
871	871