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| ARTICLE 12 |
RELATING TO STATE POLICE PENSIONS
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| SECTION 1. Section 42-28-22.1 of the General Laws in Chapter 42-28 entitled “State |
| Police” is hereby amended to read as follows: |
| 42-28-22.1 Retirement contribution. -- (a) Legislative findings. The general assembly |
| finds that: |
| (1) A trust was created for retirement purposes for members of the state police who were |
| hired after July 1, 1987; however, as of January 1, 2015, there was an unfunded liability of |
| approximately $200 million attributable to the retirement benefits for members of the state police |
| hired on or before July 1, 1987, and no trust had been created for them. |
| (2) Unless a trust is established, these members’ benefits will continue to be funded on a |
| pay-as-you-go basis and would not be recognized as a liability on the state’s financial statements |
| under generally accepted accounting purposes. |
| (3) An investigation of Google, Inc., conducted by the Rhode Island U.S. attorney’s |
| office and the Rhode Island task force of the U.S. food and drug administration’s office of |
| criminal investigations, the department of the attorney general, and state and local police netted |
| settlement amounts of approximately $230 million to the state, of which $45.0 million has been |
| allocated for use by the state police. |
| (4) The allocation of Google settlement monies to the state police presents a unique |
| opportunity to reduce the amount of the unfunded liability attributable to the retirement benefits |
| for members of the state police hired on or before July 1, 1987. |
| (5) It is in the best interests of the members of the state police and the taxpayers of this |
| state to reduce the amount of the unfunded liability attributable to retirement benefits for these |
| police officers by creating a separate trust and to fund those benefits on an actuarial basis. |
| (a)(b) Each member of the state police initially hired after July 1, 1987 shall have |
| deducted from "compensation" as defined in § 36-8-1(8) beginning July 1, 1989, an amount equal |
| to a rate percent of such compensation of eight and three quarters percent (8.75%). The receipts |
| collected from members of the state police shall be deposited in a restricted revenue account |
| entitled "state police retirement benefits". The proceeds deposited in this account shall be held in |
| trust for the purpose of paying retirement benefits under this section to participating members of |
| the state police or their beneficiaries. The retirement board shall establish rules and regulations to |
| govern the provisions of this section. |
| (b)(c) A member of the state police initially hired after July 1, 1987 who withdraws from |
| service or ceases to be a member for any reason other than death or retirement, will, at the |
| member's request, be paid on demand a refund consisting of the accumulated contributions |
| standing to his or her credit in his or her individual account in the state police retirement benefits |
| account. Any member receiving a refund shall thereby forfeit and relinquish all accrued rights as |
| a member of the system together with credits for total service previously granted to the member; |
| provided, however, that if any member who has received a refund shall subsequently reenter the |
| service and again become a member of the system, he or she shall have the privilege of restoring |
| all moneys previously received or disbursed to his or her credit as refund of contributions, plus |
| regular interest for the period from the date of refund to the date of restoration. |
| (c)(d) Upon the repayment of the refund as herein provided in subsection (c) above, the |
| member shall again receive credit for the amount of total service which he or she had previously |
| forfeited by the acceptance of the refund. |
| (e) The state shall deposit contributions for members of the state police initially hired on |
| or before July 1, 1987, from time to time (as provided in § 42-28-22.2) to be held in trust. The |
| proceeds of this trust shall pay retirement benefits under this section to participating members of |
| the state police or their beneficiaries. The retirement board shall establish rules and regulations to |
| govern the provisions of this section. |
| SECTION 2. Section 42-28-22.2 of the General Laws in Chapter 42-28 entitled “State |
| Police” is hereby amended to read as follows: |
| 42-28-22.2 State contributions. -- The state of Rhode Island shall make its contribution |
| for the maintaining of the system established by § 42-28-22.1 and providing the annuities, |
| benefits, and retirement allowances in accordance with the provisions of this chapter by (a) |
| annually appropriating an amount which will pay a rate percent of the compensation paid after |
| July 1, 1989 to members of the state police hired after July 1, 1987 and (b) appropriating an |
| amount which will amortize the unfunded liability associated with the benefits payable to |
| members of the state police hired on or before July 1, 1987. This rate percent The dollar amount |
| specified in subsection (b) above shall be computed on an actuarial basis using an eighteen (18) |
| year amortization schedule commencing on July 1, 2015, taking into account an initial |
| supplemental contribution from the state, and certified in accordance with the procedures set forth |
| in §§ 36-8-13 and 36-10-2 under rules and regulations promulgated by the retirement board |
| pursuant to § 36-8-3. |
| SECTION 3. Section 36-8-1 of the General Laws in Chapter 36-8 entitled “Retirement |
| System – Administration” is hereby amended to read as follows: |
| 36-8-1 Definition of terms. – The following words and phrases as used in chapters 8 to |
| 10 of this title unless a different meaning is plainly required by the context, shall have the |
| following meanings: |
| (1) "Accumulated contributions" shall mean the sum of all the amounts deducted from |
| the compensation of a member and credited to his or her individual pension account. |
| (2) "Active member" shall mean any employee of the state of Rhode Island as defined in |
| this section for whom the retirement system is currently receiving regular contributions pursuant |
| to §§ 36-10-1 and 36-10-1.1. |
| (3) "Actuarial equivalent" shall mean an allowance or benefit of equal value to any other |
| allowance or benefit when computed upon the basis of the actuarial tables in use by the system. |
| (4) "Annuity reserve" shall mean the present value of all payments to be made on account |
| of any annuity, benefit, or retirement allowance granted under the provisions of chapter 10 of this |
| title computed upon the basis of such mortality tables as shall be adopted from time to time by the |
| retirement board with regular interest. |
| (5)(a) "Average compensation" for members eligible to retire as of September 30, 2009 |
| shall mean the average of the highest three (3) consecutive years of compensation, within the total |
| service when the average compensation was the highest. For members eligible to retire on or after |
| October 1, 2009, "Average compensation" shall mean the average of the highest five (5) |
| consecutive years of compensation within the total service when the average compensation was |
| the highest. |
| (b) For members who become eligible to retire on or after July 1, 2012, if more than one |
| half (1/2) of the member's total years of service consist of years of service during which the |
| member devoted less than thirty (30) business hours per week to the service of the state, but the |
| member's average compensation consists of three (3) or more years during which the member |
| devoted more than thirty (30) business hours per week to the service of the state, such member's |
| average compensation shall mean the average of the highest ten (10) consecutive years of |
| compensation within the total service when the average compensation was the highest. |
| (6) "Beneficiary" shall mean any person in receipt of a pension, an annuity, a retirement |
| allowance, or other benefit as provided by chapter 10 of this title. |
| (7) "Casual employee" shall mean those persons hired for a temporary period, a period of |
| emergency or an occasional period. |
| (8) "Compensation" as used in chapters 8 – 10 of this title, chapters 16 and 17 of title 16, |
| and chapter 21 of title 45 shall mean salary or wages earned and paid for the performance of |
| duties for covered employment, including regular longevity or incentive plans approved by the |
| board, but shall not include payments made for overtime or any other reason other than |
| performance of duties, including but not limited to the types of payments listed below: |
| (i) Payments contingent on the employee having terminated or died; |
| (ii) Payments made at termination for unused sick leave, vacation leave, or compensatory |
| time; |
| (iii) Payments contingent on the employee terminating employment at a specified time in |
| the future to secure voluntary retirement or to secure release of an unexpired contract of |
| employment; |
| (iv) Individual salary adjustments which are granted primarily in anticipation of the |
| employee's retirement; |
| (v) Additional payments for performing temporary or extra duties beyond the normal or |
| regular work day or work year. |
| (9) "Employee" shall mean any officer or employee of the state of Rhode Island whose |
| business time is devoted exclusively to the services of the state, but shall not include one whose |
| duties are of a casual or seasonal nature. The retirement board shall determine who are employees |
| within the meaning of this chapter. The governor of the state, the lieutenant governor, the |
| secretary of state, the attorney general, the general treasurer, and the members of the general |
| assembly, ex officio, shall not be deemed to be employees within the meaning of that term unless |
| and until they elect to become members of the system as provided in § 36-9-6, but in no case shall |
| it deem as an employee, for the purposes of this chapter, any individual who devotes less than |
| twenty (20) business hours per week to the service of the state, and who receives less than the |
| equivalent of minimum wage compensation on an hourly basis for his or her services, except as |
| provided in § 36-9-24. Any commissioner of a municipal housing authority or any member of a |
| part-time state, municipal or local board, commission, committee or other public authority shall |
| not be deemed to be an employee within the meaning of this chapter. |
| (10) "Full actuarial costs" or "full actuarial value" shall mean the lump sum payable by a |
| member claiming service credit for certain employment for which that payment is required which |
| is determined according to the age of the member and the employee's annual rate of compensation |
| at the time he or she applies for service credit and which is expressed as a rate percent of the |
| employee's annual rate of compensation to be multiplied by the number of years for which he or |
| she claims service credit as prescribed in a schedule adopted by the retirement board from time to |
| time on the basis of computation by the actuary. Except as provided in §§ 16-16-7.1, 36-5-3, 36- |
| 9-31, 36-10-10.4, 45-21-53, 36-10-8, 45-21-29, 8-3-16(b), 8-8-10.1(b), 42-28-22.1(b)(c) and 28- |
| 30-18.1(b):. |
| (i) all service credit purchases requested after June 16, 2009 and prior to July 1, 2012, |
| shall be at full actuarial value; and |
| (ii) all service credit purchases requested after June 30, 2012 shall be at full actuarial |
| value which shall be determined using the system's assumed investment rate of return minus one |
| percent (1%). |
| The rules applicable to a service credit purchase shall be the rules of the retirement |
| system in effect at the time the purchase application is submitted to the retirement system. |
| (11) "Inactive member" shall mean a member who has withdrawn from service as an |
| employee but who has not received a refund of contributions. |
| (12) "Members" shall mean any person included in the membership of the retirement |
| system as provided in §§ 36-9-1 – 36-9-7. |
| (13) "Prior service" shall mean service as a member rendered before July 1, 1936, |
| certified on his or her prior service certificate and allowable as provided in § 36-9-28. |
| (14) "Regular interest" shall mean interest at the assumed investment rate of return, |
| compounded annually, as may be prescribed from time to time by the retirement board. |
| (15) "Retirement allowance" shall mean annual payments for life made after retirement |
| under and in accordance with chapters 8 to 10 of this title. All allowances shall be paid in equal |
| monthly installments beginning as of the effective date thereof; provided, that a smaller pro rata |
| amount may be paid for part of a month where separation from service occurs during the month |
| in which the application was filed, and when the allowance ceases before the last day of the |
| month. |
| (16) "Retirement board" or "board" shall mean the board provided in § 36-8-3 to |
| administer the retirement system. |
| (17) "Retirement system" shall mean the employees' retirement system of the state of |
| Rhode Island as defined in § 36-8-2. |
| (18) "Service" shall mean service as an employee of the state of Rhode Island as |
| described in subdivision (9) of this section. |
| (19) "Social Security retirement age" shall mean a member's full retirement age as |
| determined in accordance with the federal Old Age, Survivors and Disability Insurance Act, not |
| to exceed age sixty-seven (67). |
| (20) "Total service" shall mean prior service as defined above, plus service rendered as a |
| member on or after July 1, 1936. |
| SECTION 4. This article shall take effect upon passage. |