§ 36-10.2-7. Funding improvement strategy procedure.
(1) In any case in which a plan is in endangered status for a plan year, except for a plan year where a plan is already in a funding improvement period and meeting its scheduled funding targets for the three (3) consecutive prior plan years, a funding improvement strategy shall be implemented not later than June 30 following the date the plan was certified as being in endangered status under § 36-10.2-6. The plan actuary shall submit preliminary funding improvement strategies including a default strategy as described in subparagraphs (3) and (4) to the board for review not later than January 1 following the date the plan was certified as being in endangered status under § 36-10.2-6.
(2) The funding improvement strategy shall be formulated to achieve, based on reasonably anticipated experience and reasonable actuarial assumptions, the following requirements:
(a) The plan’s funded percentage shall improve in accordance with paragraph (i) or paragraph (ii), applying the paragraph that produces the greater funded percentage increase for the plan in a ten (10) year period.
(i) As of the close of a ten (10) year funding improvement period, the plan’s funded percentage shall equal or exceed the sum of:
(I) The plan’s funded percentage as of the beginning of the plan year that the actuary initially certified the plan as endangered; plus
(II) Fifty percent (50%) of the difference between eighty percent (80%) and the plan’s funded percentage under paragraph (I); or
(ii) The plan’s funded percentage shall improve at the rate of at least one percent (1%) annually until the plan’s funded percentage equals or exceeds eighty percent (80%).
(b) In the event that the state or a local municipality, as the employer of a plan, determines that, based on reasonable actuarial assumptions and upon exhaustion of all reasonable measures, the plan cannot reasonably be expected to meet the guidelines of subdivisions (i) and (ii), then the employer’s legislative governing body shall provide a report to the retirement board, no later than March 1 following the date the plan was certified as being in endangered status under § 36-10.2-6, explaining why the plan is not reasonably expected to meet the guidelines of subdivisions (i) or (ii) and provide a reasonable funding improvement strategy to emerge from endangered status.
(3) Not later than January 1 following the date the plan was certified as being in endangered status under § 36-10.2-6, the actuary shall provide to the board, and in the case of MERS plan shall also provide to the impacted local municipality’s legislative governing body, at least five (5) funding improvement strategies but no more than ten (10) funding improvement strategies showing revised benefit structures, revised contribution structures, or both, which, if adopted, may reasonably be expected to enable the plan to meet the applicable requirements found in subparagraph (2).
(4) In addition to any funding improvement strategies provided by the board in subparagraph (3), the board shall include a default funding improvement strategy (“Default A”) that shall show increases in employer and employee contributions under the plan necessary to achieve the applicable requirements found in subsection (2), assuming no amendments to reduce future benefit accruals under the plan.
(5) Not later than April 1 following the date the plan was certified as being in endangered status under § 36-10.2-6, the board shall submit the “Default A” strategy as described in subparagraph (4) and one additional funding improvement strategy, as selected by the board, to the general assembly.
(6) Not later than June 30 following the date the plan was certified as being in endangered status under § 36-10.2-6, the general assembly shall select and enact into law one of the two (2) submitted funding improvement strategies. If no funding improvement strategy is approved by the general assembly by June 30, the “Default A” strategy as described in subparagraph (4) shall be enacted into law effective July 1 following the date the plan was certified as being in endangered status under § 36-10.2-6. “Default A” shall remain in effect until either the actuary certifies under § 36-10.2-6 for a plan year that the plan is no longer in endangered status or the general assembly selects a funding improvement strategy consistent with the provisions of this chapter.
(7) Notwithstanding any other law to the contrary, any reports and funding strategies submitted to the board pursuant to this section shall be public records.
History of Section.
P.L. 2011, ch. 408, § 8; P.L. 2011, ch. 409, § 8.