2019 -- H 6236 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TOWNS AND CITIES - RETIREMENT OF MUNICIPAL EMPLOYEES AND

CLOSED MUNICIPAL RETIREMENT PLANS

     Introduced By: Representatives Maldonado, and McLaughlin

     Date Introduced: June 20, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 45-21-8 and 45-21-16.2 of the General Laws in Chapter 45-21

entitled "Retirement of Municipal Employees" are hereby amended to read as follows:

     45-21-8. Membership in system.

     Membership in the retirement system does not begin before the effective date of

participation in the system as provided in §§§ 45-21-4, 45-21.4-2 or 45-21.4-3 and consists of the

following:

     (a) Any employee of a participating municipality as defined in this chapter, who becomes

an employee on and after the effective date of participation, shall, under contract of his or her

employment, become a member of the retirement system; provided, that the employee is not

receiving any pension or retirement allowance from any other pension or retirement system

supported wholly or in part by a participating municipality, and is not a contributor to any other

pension or retirement system of a participating municipality. Any employee who is elected to an

office in the service of a municipality after the effective date and prior to July 1, 2012, has the

option of becoming a member of the system, which option must be exercised within sixty (60)

days following the date the employee assumes the duties of his or her office, otherwise that

person is not entitled to participate under the provisions of this section;

     (b) Any employee or elected official of a participating municipality in service prior to the

effective date of participation, who is not a member of any other pension or retirement system

supported wholly or in part by a participating municipality, and who does not notify the

retirement board in writing before the expiration of sixty (60) days from the effective date of

participation that he or she does not wish to join the system, shall automatically become a

member; and

     (c) Any employee of a participating municipality in service prior to the effective date of

participation, who is a member of any other pension or retirement system supported wholly or in

part by a participating municipality on the effective date of participation of their municipality,

who then or thereafter makes written application to join this system, and waives and renounces all

accrued rights and benefits of any other pension or retirement system supported wholly or in part

by a participating municipality, becomes a member of this retirement system and shall not be

required to make contribution under any other pension or retirement system of a participating

municipality, anything to the contrary notwithstanding.

     (d) Notwithstanding the provisions of this section, present firefighters employed by the

town of Johnston shall establish a pension plan separate from the state of Rhode Island retirement

system. If the town of Johnston is thirty (30) days or more late on employer or employee

contributions to the pension plan, the auditor general is authorized to redirect any Johnston funds

to cover the shortfall or to deduct that amount from any moneys due the town from the state for

any purpose other than for education. Disability determinations of present firefighters shall be

made by the state retirement board, subject to the provisions of § 45-21-19, at the town of

Johnston's expense. All new firefighters hired by the town of Johnston shall become members of

the state retirement system.

     (e) Notwithstanding the provisions of this section, any city of Cranston employees who

are presently members of Teamsters Local Union No. 251, hired between the dates of July 1,

2005, and June 30, 2010, inclusive, and who are currently members of the retirement system

established by this chapter may opt out of said retirement system and choose to enroll in a defined

contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the city of Cranston.

     (f) Notwithstanding the provisions of this section, any city of Cranston employees who

are presently members of the Laborers International Union of North America Local 1322 hired

between the dates of July 1, 2008, and June 30, 2013, inclusive, and who are currently members

of the retirement system established by this chapter may opt out of said retirement system and

choose to enroll in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof)

established by the city of Cranston.

     (g) Notwithstanding the provisions of this section, any city of Cranston employees who

will be members of Teamsters Local Union No. 251, hired after June 30, 2010, shall be enrolled

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in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the city of

Cranston and shall not be a member of the retirement system established by this chapter.

     (h) Notwithstanding the provisions of this section, any city of Cranston employees who

are presently members of the Laborers International Union of North America Local 1322 hired

after April 23, 2013, shall be enrolled in a defined contribution plan (i.e., 403(b) plan or

equivalent thereof) established by the city of Cranston and shall not be a member of the

retirement system established by this chapter.

     (i) Notwithstanding the provisions of this section, any city of Cranston employees

defined in (e) and (f) of this section shall be precluded from purchase of service credit for time

served on or after July 1, 2010, while participating in the defined contribution plan (i.e., a 403(b)

plan or equivalent thereof) established by the city of Cranston should the member cease

employment with the city of Cranston or Teamsters Local Union No. 251 and re-enter the system

with another participating employer who has accepted the provisions as defined, in § 45-21-4.

     (j) Notwithstanding the provisions of this section, any town of Middletown employees,

who will be members of the Teamsters Local Union No. 251 bargaining unit, hired after June 30,

2012, and any town of Middletown employees who are employed as full-time civilian

dispatchers, hired after June 30, 2012, and any town of Middletown employees who are not

affiliated with any recognized collective bargaining representative or union hired after June 30,

2012, shall be enrolled in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof)

established by the town of Middletown and shall not be members of the retirement system

established by this chapter. Said town of Middletown employees defined herein shall be

precluded from the purchase of service credit for time served on or after July 1, 2012, while

participating in the defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established

by the town of Middletown should the member cease employment with the town of Middletown

or in the Teamsters Local Union No. 251 bargaining unit and re-enter the system with any

participating employer who has accepted the provisions as defined in § 45-21-4.

     (k) Notwithstanding the provisions of this section, any town of Middletown employees,

who will be members of the Middletown Municipal Employees Association NEARI Local 869

bargaining unit hired after June 30, 2012, shall be enrolled in a defined contribution plan (i.e., a

403(b) plan or equivalent thereof) established by the town of Middletown and shall not be

members of the retirement system established by this chapter. Said town of Middletown

employees defined herein shall be precluded from the purchase of service credit for time served

on or after July 1, 2012, while participating in the defined contribution plan (i.e., a 403(b) plan or

equivalent thereof) established by the town of Middletown should the member cease employment

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with the town of Middletown or in the Middletown Municipal Employees Association NEARI

Local 869 bargaining unit and re-enter the system with any participating employer who has

accepted the provisions as defined in § 45-21-4.

     (l) Notwithstanding the provisions of this section, any Cranston public school employees

who will be members of National Association of Government Employees (NAGE), Local RI-153,

hired after June 30, 2012, shall be enrolled in a defined contribution plan (i.e., a 401(a) plan or

equivalent thereof) established by the Cranston school department and shall not be a member of

the retirement system established by this chapter.

     (m) Notwithstanding the provisions of this section, any Cranston public school

employees defined in subsection (h) shall be precluded from the purchase of service credit for

time served on or after July 1, 2012, while participating in the defined contribution plan (i.e., a

401(a) plan or equivalent thereof) established by the Cranston public schools should the member

cease employment with the Cranston public schools or National Association of Government

Employees (NAGE), Local RI-153 and re-enter the system with another participating employer

who has accepted the provisions as defined in § 45-21-4.

     (n) Notwithstanding the provisions of this section, the chief of police for the city of

Cranston who was hired on or about September 2014, shall be enrolled in a defined contribution

plan (i.e., 401(a) plan or any equivalent thereof) established by the city of Cranston, and shall not

be a member of the retirement system established by this chapter.

     45-21-16.2. Electronic funds transfer.

     All members of the municipal employees retirement system retiring under the provisions

of this title on or after July 1, 1998, or joining the system pursuant to §45-21.4-2 or §45-21.4-3,

are required to participate in electronic funds transfer and to supply the municipal employees

retirement system with a bank routing number to effectuate a monthly transfer of benefits.

     SECTION 2. Section 45-21.2-3 of the General Laws in Chapter 45-21.2 entitled

"Optional Retirement for Members of Police Force and Fire Fighters" is hereby amended to read

as follows:

     45-21.2-3. Optional retirement for police and fire fighters.

     In addition to the retirement system established under the provisions of chapter 21 of this

title, any municipality may accept this chapter in the manner stated in § 45-21-4. Withdrawal

from the system is in the same manner as stated in § 45-21-5 subject to the provisions of § 45-

21.4-3.

     SECTION 3. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby

amended by adding thereto the following chapter:

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CHAPTER 21.4

RELATING TO CENTRAL FALLS PENSION PLAN

     45-21.4-1. Legislative findings.

     The general assembly finds and declares the following:

     (1) All Rhode Islanders deserve retirement security, including those who have spent their

careers serving their communities as first responders and municipal employees; and

     (2) The city of Central Falls has shown great resilience in emerging from bankruptcy and

thriving economically and culturally against great odds; and

     (3) The bankruptcy occurred in part because the pension plan in Central Falls had become

severely underfunded, and as a result many first responders and retirees in the city of Central

Falls experienced significant hardship in the form of benefit reductions; and

     (4) The city of Central Falls, the labor organizations representing its first responders, and

the state of Rhode Island are united in their desire to see the city of Central Falls remain on the

path of fiscal health, and that the predictability and sustainability of the pension system is vital to

maintaining fiscal health for the city of Central Falls and retirement security for its first

responders and retirees.

     (5) The general assembly adopts this act to facilitate the assistance of the municipal

employees' retirement system of the state of Rhode Island in administering the local Central Falls

pension plan

     45-21.4-2. Alternative acceptance by the city of Central Falls of optional retirement

for police and fire fighters.

     (a) The provisions of this section shall apply only to locally administered plans within the

city of Central Falls hereinafter referred collectively as the "Central Falls plan".

     (b) On or after the effective date of this section, Central Falls may accept the provisions

of this chapter, by resolution or an ordinance of its governing body stating the group or groups of

employees to be included as provided in § 45-21-4; provided that, any and all labor organizations

representing active employees of the municipality to be included have assented to such

participation of their respective memberships, through a collective bargaining agreement and

ratification of the decision by a majority vote of those members of any such labor organization

present and voting. A copy of the resolution or ordinance and proof of assent from the applicable

labor organization shall be immediately forwarded to the retirement board for review. A vote of

the retirement board to accept the entry of the group or groups of employees in to the system shall

be required.

     (c) Effective August 31, 2019, the Central Falls plan shall be closed to new members.

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     (d) Members of the Central Falls plan in active service as of August 31, 2019 shall

continue to be subject to the applicable retirement ages and restrictions, and accrue benefits on

total service at the rates of the Central Falls plan pursuant to the collective bargaining agreements

in effect on August 31, 2019 between Central Falls and the labor organizations representing

members of the Central Falls plan.

     (e) Disability determinations shall be made by the retirement board, subject to the

procedures and standards of §§ 45-21.2-7 and 45-21.2-9 as applicable, for members hired prior to

September 1, 2019. If a disability retirement pension is granted, the member shall receive benefits

provided by the Central Falls pension plan pursuant to the collective bargaining agreements in

effect on August 31, 2019.

     (f) Beginning September 1, 2019 members of the Central Falls plan in active service shall

contribute an amount equal to eleven and seven-tenths percent (11.7%) of the salary or

compensation earned or accruing to the member.

     (g) Subject to the provisions of subsection (b) of this section being met, new employees

hired on or after September 1, 2019 shall be subject to all of the provisions of § 45-21.2,

including all applicable disability provisions and benefits provided by §§ 36-10.3-4 and 45-21-52.

     (h) Notwithstanding anything in § 45-21-42.2 to the contrary, the cost to evaluate Central

Falls prospective membership in the retirement system pursuant to this section or § 45-21.4-3,

shall be borne by the retirement board.

     (i) Notwithstanding anything in § 45-21-43.1 to the contrary, determination of the

employer contribution rate of the closed Central Falls pension plan pursuant to this section, shall

be computed using an amortization period for the unfunded actuarial accrued liability as

determined by the board, based upon the recommendation of the plan's actuary. Future actuarial

gains and losses accruing within a plan year will be amortized over individual new twenty (20)

year closed periods consistent with § 45-21-43.1(c).

     (j) Notwithstanding anything in § 45-21-56 to the contrary, if a Central Falls pension plan

pursuant to this section is in critical status as defined in § 45-65-4, and an employee of the

Central Falls pension plan leaves employment and is hired by another participating municipality

that is not in critical status as defined in § 45-65-4, then the retirement system shall transfer the

amount of the member's total accrued liability with the Central Falls pension plan, multiplied by

the funded status of the Central Falls pension plan, to the account of the current employing

municipality.

     (k) Upon the conditions of subsection (b) of this section being met, the city of Central

Falls shall remain liable to the retirement system for the cost of funding a retirement system for

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its employees who are members of the system as provided herein, and the retirement board

maintains the right to enforce payment of any liability as provided in chapter 21 of this title.

     (l) Subject to the provisions of subsection (b) of this section being met, the Central Falls

plan and the provisions of this section shall be administered in the same manner provided in

chapter 21 of this title; credits for prior service and collection of contributions are determined

through reference to that chapter; provided, that where the provisions of that chapter conflict with

this chapter, then the provisions of this chapter control. Liability of contributions is enforced in

the same manner as stated in chapter 21 of this title.

     45-21.4-3. Retiree participation in optional requirement plan.

     (a) The provisions of this section shall apply only to locally administered plans within the

city of Central Falls.

     (b) Notwithstanding any provision of this chapter to the contrary, on or before August 31,

2019, Central Falls may accept the provisions of this chapter by an ordinance of its governing

body stating the group or groups of retired former employees to be included as provided in § 45-

21-4; provided that, a majority of retired former employees have consented in writing to joining

the system or any duly constituted retiree organization that represents said retired former

employees has assented to joining the system. A copy of the ordinance shall be immediately

forwarded to the retirement board for review. A vote of the retirement board to accept the entry of

the group or groups of employees in to the system shall be required.

     For purposes of this section, "retired former employees" means any Central Falls police

officer or fire fighter who has retired prior to September 1, 2019, pursuant to the provisions of the

Central Falls' retirement plan.

     (c) Notwithstanding any other provisions of this section or other applicable law, upon

acceptance into the system, all "Central Falls retirees," as defined in § 45-21-67(a)(2), and their

beneficiaries, and also all other retired former employees and their beneficiaries who are entitled

to benefits under the "settlement agreement" that is identified in § 45-21-67(a)(3), shall retain all

of the benefits accrued and calculated to them as provided in accordance with such settlement

agreement (and, for clarification, irrespective of and notwithstanding any possible expiration of

any "term" in respect to certain provisions of such agreement), including disability and post-

retirement benefits, and their entitlement to all payments provided under § 45-21-67, and none of

the foregoing shall be made unavailable or conditioned, nor be diminished or reduced, by virtue

of entry into the system. Any retired former employee who is not entitled to benefits under the

"settlement agreement" shall retain all of the benefits accrued and calculated in accordance with,

and shall be subject to, all of the provisions, limitations and restrictions contained in the

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collective bargaining agreement at the time of his or her retirement. Retired former employees,

including any "Central Falls retiree", shall not be entitled to any retirement allowance or benefit

from the system otherwise available or calculated pursuant to the provisions of §§ 45-21.2-6, 45-

21.2-13, or 45-21.2-20, 45-21.2-21, or 45-21.2-22.

     (d) Withdrawal of a plan consisting solely of retired former Central Falls police officers

or fire fighters, that had joined the retirement system pursuant to this section, shall be as provided

in § 45-21-5.

     (e) The cost to evaluate Central Falls' prospective membership in the retirement system,

and costs related to obtaining consent of retirees to join the system pursuant to this section shall

be borne by the retirement board.

     (f) Upon the conditions of subsection (b) of this section being met, the city of Central

Falls shall remain liable to the retirement system for the cost of funding a retirement system for

its employees who are members of the system and the retirement board maintains the right to

enforce payment of any liability as provided in chapter 21 of this title.

     (g) Subject to the provisions of subsection (b) of this section being met, the provisions of

this section shall be administered in the same manner provided in chapter 21 of this title;

provided, that where the provisions of that chapter conflict with this chapter, then the provisions

of this chapter control. Liability of the municipality is enforced in the same manner as stated in

chapter 21 of this title.

     45-21.4-4. Transfer of assets.

     (a) Subject to the provisions of §§ 45-21.4-2(b) and 45-21.4-3(b) being met, on

December 31, 2019, the system shall be responsible for administering the Central Falls plan,

including the administration of any supplemental payments as provided in § 45-21-67, and

Central Falls shall transfer to the system the accumulated contributions of each member entering

the system and any other assets of the Central Falls plan.

     (b) Beginning January 1, 2020, all appropriations made pursuant to § 45-21-67 shall be

appropriated to the system and disbursed by the system in accordance with § 45-21-67.

     SECTION 4. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES - RETIREMENT OF MUNICIPAL EMPLOYEES AND

CLOSED MUNICIPAL RETIREMENT PLANS

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     This act would facilitate the locally administered Central Falls retirement plans joining

the municipal employees retirement system of the state, by providing greater flexibility in funding

policies than would otherwise be required, depending upon the needs and circumstances of the

community.

     This act would take effect upon passage.

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