2012 -- H 7156

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LC00233

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM --

CONTRIBUTIONS AND BENEFITS

     Introduced By: Representatives Edwards, Azzinaro, DaSilva, Brien, and Lally

     Date Introduced: January 18, 2012

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 36-8-1 of the General Laws in Chapter 36-8 entitled "Retirement

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System-Administration" is hereby amended to read as follows:

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     36-8-1. Definition of terms. -- The following words and phrases as used in chapters 8 to

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10 of this title unless a different meaning is plainly required by the context, shall have the

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following meanings:

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      (1) "Accumulated contributions" shall mean the sum of all the amounts deducted from

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the compensation of a member and credited to his or her individual pension account.

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      (2) "Active member" shall mean any employee of the state of Rhode Island as defined in

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this section for whom the retirement system is currently receiving regular contributions pursuant

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to sections 36-10-1 and 36-10-1.1.

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      (3) "Actuarial equivalent" shall mean an allowance or benefit of equal value to any other

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allowance or benefit when computed upon the basis of the actuarial tables in use by the system.

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      (4) "Annuity reserve" shall mean the present value of all payments to be made on

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account of any annuity, benefit, or retirement allowance granted under the provisions of chapter

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10 of this title computed upon the basis of such mortality tables as shall be adopted from time to

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time by the retirement board with regular interest.

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      (5) (a) "Average compensation" for members eligible to retire as of September 30, 2009

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shall mean the average of the highest three (3) consecutive years of compensation, within the total

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service when the average compensation was the highest. For members eligible to retire on or after

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October 1, 2009, "Average compensation" shall mean the average of the highest five (5)

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consecutive years of compensation within the total service when the average compensation was

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the highest. Notwithstanding the aforementioned, for all present and former employees, active

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and retired members, and beneficiaries receiving any retirement, disability or death allowance or

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benefit of any kind, the annual benefit adjustment provided in any calendar year under this

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section shall not exceed one hundred five percent (105%) of the highest annual compensation

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paid prior to retirement.

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      (b) For members who become eligible to retire on or after July 1, 2012, if more than one

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half (1/2) of the member's total years of service consist of years of service during which the

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member devoted less than thirty (30) business hours per week to the service of the state, but the

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member's average compensation consists of three (3) or more years during which the member

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devoted more than thirty (30) business hours per week to the service of the state, such member's

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average compensation shall mean the average of the highest ten (10) consecutive years of

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compensation within the total service when the average compensation was the highest.

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Notwithstanding the aforementioned, for all present and former employees, active and retired

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members, and beneficiaries receiving any retirement, disability or death allowance or benefit of

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any kind, the annual benefit adjustment provided in any calendar year under this section shall not

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exceed one hundred five percent (105%) of the highest annual compensation paid prior to

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retirement.

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      (6) "Beneficiary" shall mean any person in receipt of a pension, an annuity, a retirement

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allowance, or other benefit as provided by chapter 10 of this title.

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      (7) "Casual employee" shall mean those persons hired for a temporary period, a period of

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emergency or an occasional period.

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      (8) "Compensation" as used in chapters 8 -- 10 of this title, chapters 16 and 17 of title 16,

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and chapter 21 of title 45 shall mean salary or wages earned and paid for the performance of

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duties for covered employment, including regular longevity or incentive plans approved by the

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board, but shall not include payments made for overtime or any other reason other than

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performance of duties, including but not limited to the types of payments listed below:

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      (i) Payments contingent on the employee having terminated or died;

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      (ii) Payments made at termination for unused sick leave, vacation leave, or

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compensatory time;

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      (iii) Payments contingent on the employee terminating employment at a specified time in

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the future to secure voluntary retirement or to secure release of an unexpired contract of

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employment;

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      (iv) Individual salary adjustments which are granted primarily in anticipation of the

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employee's retirement;

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      (v) Additional payments for performing temporary or extra duties beyond the normal or

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regular work day or work year.

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      (9) "Employee" shall mean any officer or employee of the state of Rhode Island whose

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business time is devoted exclusively to the services of the state, but shall not include one whose

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duties are of a casual or seasonal nature. The retirement board shall determine who are employees

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within the meaning of this chapter. The governor of the state, the lieutenant governor, the

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secretary of state, the attorney general, the general treasurer, and the members of the general

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assembly, ex officio, shall not be deemed to be employees within the meaning of that term unless

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and until they elect to become members of the system as provided in section36-9-6, but in no case

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shall it deem as an employee, for the purposes of this chapter, any individual who devotes less

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than twenty (20) business hours per week to the service of the state, and who receives less than

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the equivalent of minimum wage compensation on an hourly basis for his or her services, except

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as provided in section36-9-24. Any commissioner of a municipal housing authority or any

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member of a part-time state, municipal or local board, commission, committee or other public

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authority shall not be deemed to be an employee within the meaning of this chapter.

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      (10) "Full actuarial costs" or "full actuarial value" shall mean the lump sum payable by a

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member claiming service credit for certain employment for which that payment is required which

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is determined according to the age of the member and the employee's annual rate of compensation

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at the time he or she applies for service credit and which is expressed as a rate percent of the

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employee's annual rate of compensation to be multiplied by the number of years for which he or

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she claims service credit as prescribed in a schedule adopted by the retirement board from time to

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time on the basis of computation by the actuary. Except as provided in sections 16-16-7.1, 36-5-3,

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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) and 28-

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30-18.1(b).

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      (i) all All service credit purchases requested after June 16, 2009 and prior to July 1,

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2012, shall be at full actuarial value and

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      (ii) all All service credit purchases requested after June 30, 2012 shall be at full actuarial

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value which shall be determined using the system's assumed investment rate of return minus one

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percent (1%).

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      The rules applicable to a service credit purchase shall be the rules of the retirement

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system in effect at the time the purchase application is submitted to the retirement system.

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      (11) "Inactive member" shall mean a member who has withdrawn from service as an

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employee but who has not received a refund of contributions.

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      (12) "Members" shall mean any person included in the membership of the retirement

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system as provided in sections 36-9-1 -- 36-9-7.

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      (13) "Prior service" shall mean service as a member rendered before July 1, 1936,

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certified on his or her prior service certificate and allowable as provided in section 36-9-28.

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      (14) "Regular interest" shall mean interest at the assumed investment rate of return,

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compounded annually, as may be prescribed from time to time by the retirement board.

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      (15) "Retirement allowance" shall mean annual payments for life made after retirement

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under and in accordance with chapters 8 to 10 of this title. All allowances shall be paid in equal

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monthly installments beginning as of the effective date thereof; provided, that a smaller pro rata

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amount may be paid for part of a month where separation from service occurs during the month

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in which the application was filed, and when the allowance ceases before the last day of the

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month.

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      (16) "Retirement board" or "board" shall mean the board provided in section 36-8-3 to

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administer the retirement system.

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      (17) "Retirement system" shall mean the employees' retirement system of the state of

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Rhode Island as defined in section 36-8-2.

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      (18) "Service" shall mean service as an employee of the state of Rhode Island as

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described in subdivision (9) of this section.

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      (19) "Social Security retirement age" shall mean a member's full retirement age as

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determined in accordance with the federal Old Age, Survivors and Disability Insurance Act, not

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to exceed age sixty-seven (67).

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      (20) "Total service" shall mean prior service as defined above, plus service rendered as a

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member on or after July 1, 1936.

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     SECTION 2. Sections 36-10-10, 36-10-10.2 and 36-10-35 of the General Laws in

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Chapter 36-10 entitled “Retirement System- Contributions and Benefits” are hereby amended to

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read as follows:

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     36-10-10. Amount of service retirement allowance. -- (a) (1) (i) For employees eligible

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to retire on or before September 30, 2009, upon retirement for service under section 36-10-9, a

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member whose membership commenced before July 1, 2005 and who has completed at least ten

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(10) years of contributory service on or before July 1, 2005 shall receive a retirement allowance

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which shall be determined in accordance with schedule A below for service prior to July 1, 2012:

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     Schedule A

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     Years of Service Percentage Allowance

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     1st through 10th inclusive 1.7%

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     11th through 20th inclusive 1.9%

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     21st through 34th inclusive 3.0%

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     35th 2.0%

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     (ii) For employees eligible to retire on or after October 1, 2009, who were not eligible to

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retire on or before September 30, 2009, upon retirement from service under section 36-10-9, a

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member whose membership commenced before July 1, 2005 and who has completed at least ten

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(10) years of contributory service on or before July 1, 2005 shall receive a retirement allowance

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which shall be determined in accordance with schedule A above for service on before September

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30, 2009, and shall be determined in accordance with schedule B in subsection (a)(2) below for

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service on or after October 1, 2009 and prior to July 1, 2012. (2) Upon retirement for service

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under section 36-10-9, a member whose membership commenced after July 1, 2005, or who has

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not completed at least ten (10) years of contributory service as of July 1, 2005, shall, receive a

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retirement allowance which shall be determined in accordance with Schedule B below for service

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prior to July 1, 2012:

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     Schedule B

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     Years of Service Percentage Allowance

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     1st through 10th inclusive 1.60%

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     11th through 20th inclusive 1.80%

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     21st through 25th inclusive 2.0%

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     26th through 30th inclusive 2.25%

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     31st through 37th inclusive 2.50%

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     38th 2.25%

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      (b) The retirement allowance of any member whose membership commenced before July

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1, 2005 and who has completed at least ten (10) years of contributory service on or before July 1,

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2005 shall be in an amount equal to the percentage allowance specified in subsection (a)(1) of his

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or her average highest three (3) consecutive years of compensation multiplied by the number of

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years of total service, but in no case to exceed eighty percent (80%) of the compensation payable

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at completion of thirty-five (35) years of service; provided, however, for employees retiring on or

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after October 1, 2009 who were not eligible to retire as of September 30, 2009 the calculation

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shall be based on the average highest five (5) consecutive years of compensation. Any member

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who has in excess of thirty-five (35) years on or before June 2, 1985, shall not be entitled to any

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refund, and any member with thirty-five (35) years or more on or after June 2, 1985, shall

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contribute from July 1, 1985, until his or her retirement. The retirement allowance of any

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member whose membership commenced after July 1, 2005 or who had not completed at least ten

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(10) years of contributory service as of July 1, 2005, shall, be in an amount equal to the

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percentage allowance specified in Schedule B of his or her average highest three (3) consecutive

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years of compensation multiplied by the number of years of total service, but in no case to exceed

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seventy-five percent (75%) of the compensation payable at the completion of thirty-eight (38)

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years of service; provided, however, for employees retiring on or after October 1, 2009 who were

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not eligible to retire as of September 30, 2009 the calculation shall be based on the average

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highest five (5) consecutive years of compensation.

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      (c) Any member with thirty-eight (38) years or more of service prior to December 31,

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1985, shall not be required to make additional contributions. Contributions made between

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December 31, 1985, and July 1, 1987, by members with thirty-eight (38) or more years of service

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prior to December 31, 1985, shall be refunded by the retirement board to the persons, their heirs,

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administrators, or legal representatives.

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      (d) For service prior to July 1, 2012, the retirement allowance of a member shall be

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determined in accordance with subsections (a)(1) and (a)(2) above. For service on and after July

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1, 2012, a member's retirement allowance shall be equal to one percent (1%) of the member's

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average compensation multiplied by the member's years of service on and after July 1 2012. In no

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event shall a member's retirement allowance exceed the maximum limitations set forth in

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paragraph (b) above.

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     (e) Notwithstanding the aforementioned, for all present and former employees, active and

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retired members, and beneficiaries receiving any retirement, disability or death allowance or

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benefit of any kind, the annual benefit adjustment provided in any calendar year under this

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section shall not exceed one hundred five percent (105%) of the highest annual compensation

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paid prior to retirement.

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     36-10-10.2. Amount of service retirement allowance -- Correctional officers. -- (a)

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Upon retirement for service under section 36-10-9.2, a member with twenty-five (25) or more

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years of service as of June 30, 2012 shall receive a retirement allowance of an amount determined

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under (i) below. All other members shall receive a retirement allowance of an amount equal to the

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sum of (i) below for service prior to July 1, 2012, plus (ii) below for service on and after July 1,

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2012. (i) Two percent (2%) of his or her average compensation multiplied by his or her first

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thirty (30) years of total service within the department of corrections; any and all years of

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remaining service shall be issued to the member at a retirement allowance of an amount equal to

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his or her average compensation multiplied by the percentage allowance determined in

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accordance with Schedule A below:

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     Schedule A

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     Years of Service
Percentage Allowance

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     1 through 30 inclusive
2%

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     31st
6%

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     32nd
5%

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     33rd
4%

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     34th
3%

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     35th
2%

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     (ii) Two percent (2%) of his or her average compensation multiplied by his or her years

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of service on and after July 1, 2012 within the department of corrections.

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      (b) In no case shall a retirement percentage allowance exceed the greater of the member's

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retirement percentage allowance on June 30, 2012 or seventy-five percent (75%). Any member

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who has in excess of thirty-five (35) years on or before July 1, 1987, shall not be entitled to any

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refund. Any member with thirty-five (35) years or more on or after July 1, 1987, shall contribute

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from July 1, 1987, until his or her retirement, provided, however, that any member with thirty-

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eight (38) years of service prior to July 1, 1987, shall not be required to contribute.

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     (c) Notwithstanding the aforementioned, for all present and former employees, active and

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retired members, and beneficiaries receiving any retirement, disability or death allowance or

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benefit of any kind, the annual benefit adjustment provided in any calendar year under this

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section shall not exceed one hundred five percent (105%) of the highest annual compensation

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paid prior to retirement.

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     36-10-35. Additional benefits payable to retired employees. -- (a) All state employees

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and all beneficiaries of state employees receiving any service retirement or ordinary or accidental

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disability retirement allowance pursuant to the provisions of this title on or before December 31,

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1967, shall receive a cost of living retirement adjustment equal to one and one-half percent

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(1.5%) per year of the original retirement allowance, not compounded, for each calendar year the

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retirement allowance has been in effect. For the purposes of computation, credit shall be given for

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a full calendar year regardless of the effective date of the retirement allowance. This cost of living

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adjustment shall be added to the amount of the retirement allowance as of January 1, 1968, and an

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additional one and one-half percent (1.5%) shall be added to the original retirement allowance in

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each succeeding year during the month of January, and provided further, that this additional cost

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of living increase shall be three percent (3%) for the year beginning January 1, 1971, and each

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year thereafter, through December 31, 1980. Notwithstanding any of the above provisions, no

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employee receiving any service retirement allowance pursuant to the provisions of this title on or

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before December 31, 1967, or the employee's beneficiary, shall receive any additional benefit

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hereunder in an amount less than two hundred dollars ($200) per year over the service retirement

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allowance where the employee retired prior to January 1, 1958.

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      (b) All state employees and all beneficiaries of state employees retired on or after

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January 1, 1968, who are receiving any service retirement or ordinary or accidental disability

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retirement allowance pursuant to the provisions of this title shall, on the first day of January next

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following the third anniversary date of the retirement, receive a cost of living retirement

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adjustment, in addition to his or her retirement allowance, in an amount equal to three percent

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(3%) of the original retirement allowance. In each succeeding year thereafter through December

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31, 1980, during the month of January, the retirement allowance shall be increased an additional

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three percent (3%) of the original retirement allowance, not compounded, to be continued during

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the lifetime of the employee or beneficiary. For the purposes of computation, credit shall be given

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for a full calendar year regardless of the effective date of the service retirement allowance.

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      (c) (1) Beginning on January 1, 1981, for all state employees and beneficiaries of the

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state employees receiving any service retirement and all state employees, and all beneficiaries of

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state employees, who have completed at least ten (10) years of contributory service on or before

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July 1, 2005 pursuant to the provisions of this chapter, and for all state employees, and all

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beneficiaries of state employees who receive a disability retirement allowance pursuant to

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sections 36-10-12 -- 36-10-15, the cost of living adjustment shall be computed and paid at the rate

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of three percent (3%) of the original retirement allowance or the retirement allowance as

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computed in accordance with section 36-10-35.1, compounded annually from the year for which

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the cost of living adjustment was determined to be payable by the retirement board pursuant to

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the provisions of subsection (a) or (b) of this section. Such cost of living adjustments are

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available to members who retire before October 1, 2009 or are eligible to retire as of September

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30, 2009.

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      (2) The provisions of this subsection shall be deemed to apply prospectively only and no

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retroactive payment shall be made.

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      (3) The retirement allowance of all state employees and all beneficiaries of state

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employees who have not completed at least ten (10) years of contributory service on or before

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July 1, 2005 or were not eligible to retire as of September 30, 2009, shall, on the month following

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the third anniversary date of retirement, and on the month following the anniversary date of each

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succeeding year be adjusted and computed by multiplying the retirement allowance by three

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percent (3%) or the percentage of increase in the Consumer Price Index for all Urban Consumers

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(CPI-U) as published by the United States Department of Labor Statistics determined as of

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September 30 of the prior calendar year, whichever is less; the cost of living adjustment shall be

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compounded annually from the year for which the cost of living adjustment was determined

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payable by the retirement board; provided, that no adjustment shall cause any retirement

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allowance to be decreased from the retirement allowance provided immediately before such

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adjustment.

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      (d) For state employees not eligible to retire in accordance with this chapter as of

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September 30, 2009 and not eligible upon passage of this article, and for their beneficiaries, the

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cost of living adjustment described in subsection (3) above shall only apply to the first thirty-five

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thousand dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon

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the third (3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five

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(65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by

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the percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U) as

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published by the United States Department of Labor Statistics determined as of September 30 of

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the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand

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dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of

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increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the

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United States Department of Labor Statistics determined as of September 30 of the prior calendar

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year or three percent (3%), whichever is less, on the month following the anniversary date of each

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succeeding year. For state employees eligible to retire as of September 30, 2009 or eligible upon

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passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not

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apply.

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      (e) All legislators and all beneficiaries of legislators who are receiving a retirement

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allowance pursuant to the provisions of section 36-10-9.1 for a period of three (3) or more years,

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shall, commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to

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a retirement allowance, in an amount equal to three percent (3%) of the original retirement

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allowance. In each succeeding year thereafter during the month of January, the retirement

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allowance shall be increased an additional three percent (3%) of the original retirement

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allowance, compounded annually, to be continued during the lifetime of the legislator or

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beneficiary. For the purposes of computation, credit shall be given for a full calendar year

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regardless of the effective date of the service retirement allowance.

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      (f) The provisions of sections 45-13-7 -- 45-13-10 shall not apply to this section.

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      (g) (1) Notwithstanding the prior paragraphs of this section, and subject to paragraphs

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(g)(2) below, for all present and former employees, active and retired members, and beneficiaries

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receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit

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adjustment provided in any calendar year under this section shall be equal to (A) multiplied by

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(B) where (A) is equal to the percentage determined by subtracting five and one-half percent

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(5.5%) (the "subtrahend") from the Five-Year Average Investment Return of the retirement

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system determined as of the last day of the plan year preceding the calendar year in which the

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adjustment is granted, said percentage not to exceed four percent (4%) and not to be less than

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zero percent (0%), and (B) is equal to the lesser of the member's retirement allowance or the first

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twenty-five thousand dollars ($25,000) of retirement allowance, such twenty-five thousand

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dollars ($25,000) amount to be indexed annually in the same percentage as determined under

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(g)(1)(A) above. The "Five-Year Average Investment Return" shall mean the average of the

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investment returns of the most recent five (5) plan years as determined by the retirement board.

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Subject to paragraph paragraphs (g)(2) and (5) below, the benefit adjustment provided by this

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paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date

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on which the retiree reaches his or her Social Security retirement age, whichever is later. In the

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event the retirement board adjusts the actuarially assumed rate of return for the system, either

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upward or downward, the subtrahend shall be adjusted either upward or downward in the same

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amount.

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      (2) Except as provided in paragraph (g)(3), the benefit adjustments under this section for

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any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

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Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

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State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

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exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all

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members for such plan year.

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      In determining whether a funding level under this paragraph (g)(2) has been achieved,

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the actuary shall calculate the funding percentage after taking into account the reinstatement of

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any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

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mean the ratio of the actuarial value of assets to the actuarial accrued liability.

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      (3) Notwithstanding paragraph (g)(2), in each fifth plan year commencing after June 30,

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2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five

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plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (g)(1)

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above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, the

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Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by

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the system's actuary on an aggregate basis, exceeds eighty percent (80%).

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      (4) Notwithstanding any other provision of this chapter, the provisions of this paragraph

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(g) of section 36-10-35 shall become effective July 1, 2012 and shall apply to any benefit

11-1

adjustment not granted on or prior to June 30, 2012.

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     (5) Notwithstanding the aforementioned, for all present and former employees, active and

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retired members, and beneficiaries receiving any retirement, disability or death allowance or

11-4

benefit of any kind, the annual benefit adjustment provided in any calendar year under this

11-5

section shall not exceed one hundred five percent (105%) of the highest annual compensation

11-6

paid prior to retirement.

11-7

     SECTION 3. Sections 16-16-13 and 16-16-40 of the General Laws in chapter 16-16

11-8

entitled “Teachers’ Retirement” are hereby amended to read as follows:

11-9

     16-16-13. Amount of service retirement allowance. -- (a) (1) (i) For teachers eligible to

11-10

retire on or before September 30, 2009, upon retirement from service under section 16-16-12 a

11-11

teacher whose membership commenced before July 1, 2005 and who has completed at least ten

11-12

(10) years of contributory service on or before July 1, 2005, shall, receive a retirement allowance

11-13

which shall be determined in accordance with schedule A for service prior to July 1, 2012.

11-14

     SCHEDULE A

11-15

     YEARS OF SERVICE
PERCENTAGE ALLOWANCE

11-16

     1st through 10th inclusive
1.7%

11-17

     11th through 20th inclusive
1.9%

11-18

     21st through 34th inclusive
3.0%

11-19

     35th
2.0%

11-20

     (ii) For teachers eligible to retire on or after October 1, 2009 who were not eligible to

11-21

retire on or before September 30, 2009, upon retirement for service under section 16-16-12, a

11-22

teacher whose membership commenced before July 1, 2005 and who has completed at least ten

11-23

(10) years of contributory service on or before July 1, 2005 shall receive a retirement allowance

11-24

which shall be determined in accordance with schedule A above for service on before September

11-25

30, 2009, and shall be determined in accordance with schedule B in subsection (a)(2) below for

11-26

service on or after October 1, 2009 and prior to July 1, 2012: (2) Upon retirement from service

11-27

under section 16-16-12 a teacher whose membership commenced after July 1, 2005 or who has

11-28

not completed at least ten (10) years of contributory service as of July 1, 2005 shall receive a

11-29

retirement allowance which shall be determined in accordance with Schedule B for service prior

11-30

to July 1, 2012.

11-31

     SCHEDULE B

11-32

     YEARS OF SERVICE
PERCENTAGE ALLOWANCE

11-33

     1st through 10th inclusive
1.60%

12-34

     11th through 20th inclusive
1.80%

12-35

     21st through 25th inclusive
2.0%

12-36

     26th through 30th inclusive
2.25%

12-37

     31st through 37th inclusive
2.50%

12-38

     38th
2.25%

12-39

      (b) The retirement allowance of any teacher whose membership commenced before July

12-40

1, 2005 and who has completed at least ten (10) years of contributory service on or before July 1,

12-41

2005 shall be in an amount equal to the percentage allowance specified in subsection (a)(1) of his

12-42

or her average highest three (3) consecutive years of compensation multiplied by the number of

12-43

years of total service, but in no case to exceed eighty percent (80%) of the compensation, payable

12-44

at completion of thirty-five (35) years of service; provided, however, for teachers retiring on or

12-45

after October 1, 2009 who were not eligible to retire as of September 30, 2009 the calculation

12-46

shall be based on the average highest five (5) consecutive years of compensation. The retirement

12-47

allowance of any teacher whose membership commenced after July 1, 2005 or who has not

12-48

completed at least ten (10) years of contributory service as of July 1, 2005 shall be in an amount

12-49

equal to the percentage allowance specified in Schedule B of his or her average highest three (3)

12-50

consecutive years of compensation multiplied by the number of years of total service, but in no

12-51

case to exceed seventy-five percent (75%) of the compensation, payable at completion of thirty-

12-52

eight (38) years of service; provided, however, for teachers retiring on or after October 1, 2009

12-53

who were not eligible to retire as of September 30, 2009 the calculation shall be based on the

12-54

average highest five (5) consecutive years of compensation. Any teacher who has in excess of

12-55

thirty-five (35) years on or before June 2, 1985 shall not be entitled to any refund, and any teacher

12-56

with thirty-five (35) years or more on or after June 2, 1985 shall contribute from July 1, 1985

12-57

until his or her retirement. (c) For service prior to July 2012, the retirement allowance of a teacher

12-58

shall be determined in accordance with subsections (a)(1) and (a)(2) above. For service on and

12-59

after July 1, 2012, a teacher's retirement allowance shall be equal to one percent (1%) of the

12-60

teacher's average compensation multiplied by the teacher's years of service on and after July 1,

12-61

2012. In no event shall a teacher's retirement allowance exceed the maximum limitations set forth

12-62

in subsection (b) above.

12-63

     (c) Notwithstanding the aforementioned, for all present and former teachers, active and

12-64

retired members, and beneficiaries receiving any retirement, disability or death allowance or

12-65

benefit of any kind, the annual benefit adjustment provided in any calendar year under this

12-66

section shall not exceed one hundred five percent (105%) of the highest annual compensation

12-67

paid prior to retirement.

13-68

     16-16-40. Additional benefits payable to retired teachers. -- (a) All teachers and all

13-69

beneficiaries of teachers receiving any service retirement or ordinary or accidental disability

13-70

retirement allowance pursuant to the provisions of this chapter and chapter 17 of this title, on or

13-71

before December 31, 1967, shall receive a cost of living retirement adjustment equal to one and

13-72

one-half percent (1.5%) per year of the original retirement allowance, not compounded, for each

13-73

year the retirement allowance has been in effect. For purposes of computation credit shall be

13-74

given for a full calendar year regardless of the effective date of the retirement allowance. This

13-75

cost of living retirement adjustment shall be added to the amount of the service retirement

13-76

allowance as of January 1, 1970, and payment shall begin as of July 1, 1970. An additional cost

13-77

of living retirement adjustment shall be added to the original retirement allowance equal to three

13-78

percent (3%) of the original retirement allowance on the first day of January, 1971, and each year

13-79

thereafter through December 31, 1980.

13-80

      (b) All teachers and beneficiaries of teachers receiving any service retirement or ordinary

13-81

disability retirement allowance pursuant to the provisions of this title who retired on or after

13-82

January 1, 1968, shall, on the first day of January, next following the third (3rd) year on

13-83

retirement, receive a cost of living adjustment, in addition to his or her retirement allowance, an

13-84

amount equal to three percent (3%) of the original retirement allowance. In each succeeding year

13-85

thereafter, on the first day of January, the retirement allowance shall be increased an additional

13-86

three percent (3%) of the original retirement allowance, not compounded, to be continued through

13-87

December 31, 1980.

13-88

      (c) (1) Beginning on January 1, 1981, for all teachers and beneficiaries of teachers

13-89

receiving any service retirement and all teachers and all beneficiaries of teachers who have

13-90

completed at least ten (10) years of contributory service on or before July 1, 2005, pursuant to the

13-91

provisions of this chapter, and for all teachers and beneficiaries of teachers who receive a

13-92

disability retirement allowance pursuant to sections 16-16-14 -- 16-16-17, the cost of living

13-93

adjustment shall be computed and paid at the rate of three percent (3%) of the original retirement

13-94

allowance or the retirement allowance as computed in accordance with section 16-16-40.1,

13-95

compounded annually from the year for which the cost of living adjustment was determined to be

13-96

payable by the retirement board pursuant to the provisions of subsection (a) or (b) of this section.

13-97

Such cost of living adjustments are available to teachers who retire before October 1, 2009 or are

13-98

eligible to retire as of September 30, 2009.

13-99

      (2) The provisions of this subsection shall be deemed to apply prospectively only and no

13-100

retroactive payment shall be made.

13-101

      (3) The retirement allowance of all teachers and all beneficiaries of teachers who have

13-102

not completed at least ten (10) years of contributory service on or before July 1, 2005 or were not

14-1

eligible to retire as of September 30, 2009, shall, on the month following the third anniversary

14-2

date of the retirement, and on the month following the anniversary date of each succeeding year

14-3

be adjusted and computed by multiplying the retirement allowance by three percent (3%) or the

14-4

percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as

14-5

published by the United States Department of Labor Statistics, determined as of September 30 of

14-6

the prior calendar year, whichever is less; the cost of living adjustment shall be compounded

14-7

annually from the year for which the cost of living adjustment was determined payable by the

14-8

retirement board; provided, that no adjustment shall cause any retirement allowance to be

14-9

decreased from the retirement allowance provided immediately before such adjustment.

14-10

      (d) For teachers not eligible to retire in accordance with this chapter as of September 30,

14-11

2009 and not eligible upon passage of this article, and for their beneficiaries, the cost of living

14-12

adjustment described in subsection (3) above shall only apply to the first thirty-five thousand

14-13

dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon the third

14-14

(3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65),

14-15

whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the

14-16

percentage increase in the Consumer Price Index for all Urban Consumer (CPI-U) as published

14-17

by the United States Department of Labor Statistics determined as of September 30 of the prior

14-18

calendar year or three percent (3%), whichever is less. The first thirty-five thousand dollars

14-19

($35,000), as indexed, of retirement allowance shall be multiplied by the percentage of increase

14-20

in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States

14-21

Department of Labor Statistics determined as of September 30 of the prior calendar year or three

14-22

percent (3%), whichever is less, on the month following the anniversary date of each succeeding

14-23

year. For teachers eligible to retire as of September 30, 2009 or eligible upon passage of this

14-24

article, and for their beneficiaries, the provisions of this subsection (d) shall not apply.

14-25

      (e) (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph

14-26

paragraphs (e)(2) and (5) below, for all present and former teachers, active and retired teachers,

14-27

and beneficiaries receiving any retirement, disability or death allowance or benefit of any kind,

14-28

the annual benefit adjustment provided in any calendar year under this section shall be equal to

14-29

(A) multiplied by (B) where (A) is equal to the percentage determined by subtracting five and

14-30

one-half percent (5.5%) (the "subtrahend") from the Five-Year Average Investment Return of the

14-31

retirement system determined as of the last day of the plan year preceding the calendar year in

14-32

which the adjustment is granted, said percentage not to exceed four percent (4%) and not to be

14-33

less than zero percent (0%), and (B) is equal to the lesser of the teacher's retirement allowance or

14-34

the first twenty-five thousand dollars ($25,000) of retirement allowance, such twenty-five

15-1

thousand dollars ($25,000) amount to be indexed annually in the same percentage as determined

15-2

under paragraph (e)(1)(A) above. The "Five-Year Average Investment Return" shall mean the

15-3

average of the investment returns of the most recent five (5) plan years as determined by the

15-4

retirement board. Subject to paragraph (e)(2) below, the benefit adjustment provided by this

15-5

paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date

15-6

on which the retiree reaches his or her Social Security retirement age, whichever is later. In the

15-7

event the retirement board adjusts the actuarially assumed rate of return for the system, either

15-8

upward or downward, the subtrahend shall be adjusted either upward or downward in the same

15-9

amount.

15-10

      (2) Except as provided in paragraph (e)(3), the benefit adjustments under this section for

15-11

any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

15-12

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

15-13

State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

15-14

exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all

15-15

teachers for such plan year.

15-16

      In determining whether a funding level under this paragraph (e)(2) has been achieved,

15-17

the actuary shall calculate the funding percentage after taking into account the reinstatement of

15-18

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

15-19

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

15-20

      (3) Notwithstanding paragraph (e)(2), in each fifth plan year commencing after June 30,

15-21

2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five

15-22

plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (e)(l)

15-23

above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, the

15-24

Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by

15-25

the system's actuary on an aggregate basis, exceeds eighty percent (80%).

15-26

      (4) Notwithstanding any other provisions of this chapter, the provisions of this paragraph

15-27

(e) of section 16-16-40 shall become effective July 1, 2012, and shall apply to any benefit

15-28

adjustments not granted on or prior to June 30, 2012.

15-29

     (5) Notwithstanding the aforementioned, for all present and former teachers, active and

15-30

retired members, and beneficiaries receiving any retirement, disability or death allowance or

15-31

benefit of any kind, the annual benefit adjustment provided in any calendar year under this

15-32

section shall not exceed one hundred five percent (105%) of the highest annual compensation

15-33

paid prior to retirement.

16-34

     SECTION 4. Section 45-21-52 of the General Laws in Chapter 45-21 entitled

16-35

“Retirement of Municipal Employees’ is hereby amended to read as follows:

16-36

     45-21-52. Automatic increase in service retirement allowance. -- (a) The local

16-37

legislative bodies of the cities and towns may extend to their respective employees automatic

16-38

adjustment increases in their service retirement allowances, by a resolution accepting any of the

16-39

plans described in this section:

16-40

      (1) Plan A. - All employees and beneficiaries of those employees receiving a service

16-41

retirement or disability retirement allowance under the provisions of this chapter on December 31

16-42

of the year their city or town accepts this section, receive a cost of living adjustment equal to one

16-43

and one-half percent (1 1/2%) per year of the original retirement allowance, not compounded, for

16-44

each calendar year the retirement allowance has been in effect. This cost of living adjustment is

16-45

added to the amount of the retirement allowance as of January 1 following acceptance of this

16-46

provision, and an additional one and one-half percent (1 1/2%) is added to the original retirement

16-47

allowance in each succeeding year during the month of January, and provided, further, that this

16-48

additional cost of living increase is three percent (3%) for the year beginning January 1 of the

16-49

year the plan is accepted and each succeeding year.

16-50

      (2) Plan B. - All employees and beneficiaries of those employees receiving a retirement

16-51

allowance under the provisions of this chapter on December 31 of the year their municipality

16-52

accepts this section, receive a cost of living adjustment equal to three percent (3%) of their

16-53

original retirement allowance. This adjustment is added to the amount of the retirement allowance

16-54

as of January 1 following acceptance of this provision, and an additional three percent (3%) of the

16-55

original retirement allowance, not compounded, is payable in each succeeding year in the month

16-56

of January.

16-57

      (3) Plan C. - All employees and beneficiaries of those employees who retire on or after

16-58

January 1 of the year following acceptance of this section, on the first day of January next

16-59

following the date of the retirement, receive a cost of living adjustment in an amount equal to

16-60

three percent (3%) of the original retirement allowance.

16-61

      (b) In each succeeding year in the month of January, the retirement allowance is

16-62

increased an additional three percent (3%) of the original retirement allowance, not compounded.

16-63

      (c) (1) Notwithstanding any other paragraphs of this section, and subject to paragraph

16-64

paragraphs (c)(2) and (4) below, for all present and former employees, active and retired

16-65

members, and beneficiaries receiving any retirement, disability or death allowance or benefit of

16-66

any kind by reason of adoption of this section by their employer, the annual benefit adjustment

16-67

provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A)

16-68

is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the

17-1

"subtrahend") from the Five-Year Average Investment Return of the retirement system

17-2

determined as of the last day of the plan year preceding the calendar year in which the adjustment

17-3

is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent

17-4

(0%), and (B) is equal to the lesser of the member's retirement allowance or the first twenty-five

17-5

thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000)

17-6

amount to be indexed annually in the same percentage as determined under (c)(1)(A) above. The

17-7

"Five-Year Average Investment Return" shall mean the average of the investment returns of the

17-8

most recent five (5) plan years as determined by the retirement board. Subject to paragraph (c)(2)

17-9

below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd)

17-10

anniversary of the date of retirement or the date on which the retiree reaches his or her Social

17-11

Security retirement age, whichever is later; or for municipal police and fire retiring under the

17-12

provisions of chapter 45-21.2, the benefit adjustment provided by this paragraph shall commence

17-13

on the later of the third (3rd) anniversary of the date of retirement or the date on which the retiree

17-14

reaches age fifty-five (55). In the event the retirement board adjusts the actuarially assumed rate

17-15

of return for the system, either upward or downward, the subtrahend shall be adjusted either

17-16

upward or downward in the same amount.

17-17

      (2) Except as provided in paragraph (c)(3) the benefit adjustments provided under this

17-18

section for any plan year shall be suspended in their entirety for each municipal plan within the

17-19

municipal employees retirement system unless the municipal plan is determined to be funded at a

17-20

GASB Funded Ratio equal to or greater than eighty percent (80%) as of the end of the

17-21

immediately preceding plan year in accordance with the retirement system's actuarial valuation

17-22

report as prepared by the system's actuary, in which event the benefit adjustment will be

17-23

reinstated for all members for such plan year.

17-24

      In determining whether a funding level under this paragraph (c)(2) has been achieved,

17-25

the actuary shall calculate the funding percentage after taking into account the reinstatement of

17-26

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

17-27

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

17-28

      (3) Notwithstanding paragraph (c)(2), for each municipal plan that has a GASB Funded

17-29

Ratio of less than eighty percent (80%) as of June 30, 2012, in each fifth plan year commencing

17-30

after June 30, 2012 commencing with the plan year ending June 30, 2017, and subsequently at

17-31

intervals of five (5) plan years, a benefit adjustment shall be calculated and made in accordance

17-32

with paragraph (c)(1) above until the municipal plan's GASB Funded Ratio exceeds eighty

17-33

percent (80%).

18-34

     (4) Notwithstanding the aforementioned, for all present and former municipal employees,

18-35

active and retired members, and beneficiaries receiving any retirement, disability or death

18-36

allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year

18-37

under this section shall not exceed one hundred five percent (105%) of the highest annual

18-38

compensation paid prior to retirement.

18-39

      (d) Upon acceptance of any of the plans in this section, each employee shall on January 1

18-40

next succeeding the acceptance, contribute by means of salary deductions, pursuant to section 45-

18-41

21-41, one percent (1%) of the employee's compensation concurrently with and in addition to

18-42

contributions otherwise being made to the retirement system.

18-43

      (e) The city or town shall make any additional contributions to the system, pursuant to

18-44

the terms of section 45-21-42, for the payment of any benefits provided by this section.

18-45

      (f) The East Greenwich town council shall be allowed to accept Plan C of section 45-21-

18-46

52(a)(3) for all employees of the town of East Greenwich who either, pursuant to contract

18-47

negotiations, bargain for Plan C, or who are non-union employees who are provided with Plan C

18-48

and who shall all collectively be referred to as the "Municipal-COLA Group" and shall be

18-49

separate from all other employees of the town and school department, union or non-union, who

18-50

are in the same pension group but have not been granted Plan C benefits. Upon acceptance by the

18-51

town council, benefits in accordance with this section shall be available to all such employees

18-52

who retire on or after January 1, 2003.

18-53

     SECTION 5. Section 45-21.2-2 of the General Laws in Chapter 45-21.2 entitled

18-54

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

18-55

as follows:

18-56

     45-21.2-2. Definitions. -- As used in this chapter, the words defined in section 45-21-2

18-57

have the same meanings stated in that section except that "employee" means any regular and

18-58

permanent police official or officer and any regular and permanent fire fighter. The retirement

18-59

board shall determine who are employees within the meaning of this chapter; and "final

18-60

compensation" means for members who retire on or prior to June 30, 2012, the average annual

18-61

compensation, pay or salary of a member for services rendered during the period of three (3)

18-62

consecutive years within the total service of the member when that average was highest. Effective

18-63

on and after July 1, 2012, "final compensation" means the average annual compensation of a

18-64

member for services rendered during the period of the highest five (5) consecutive years within

18-65

the total service of the member, and compensation shall be defined in accordance with section 36-

18-66

8-1(8). Notwithstanding the prior sentence, in no event shall a member's final compensation be

18-67

less than the member's final compensation on or before June 30, 2012. Notwithstanding the

18-68

aforementioned, for all present and former members of the police force and fire department,

19-1

active and retired members, and beneficiaries receiving any retirement, disability or death

19-2

allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year

19-3

under this section shall not exceed one hundred five percent (105%) of the highest annual

19-4

compensation paid prior to retirement.

19-5

     SECTION 6. Chapter 45-21.2 of the General Laws entitled “Optional Retirement for

19-6

Members of Police Force and Fire Fighters” is hereby amended by adding thereto the following

19-7

section:

19-8

     45-21.2-26. Maximum Retirement allowance. -- Notwithstanding the aforementioned,

19-9

for all present and former members of the police force and fire department, active and retired

19-10

members, and beneficiaries receiving any retirement, disability or death allowance or benefit of

19-11

any kind, the annual benefit adjustment provided in any calendar year under this section shall not

19-12

exceed one hundred five percent (105%) of the highest annual compensation paid prior to

19-13

retirement.

19-14

     SECTION 7. Section 42-28-22 in Chapter 42-28 entitled “State Police” is hereby

19-15

amended to read as follows:

19-16

     42-28-22. Retirement of members. -- (a) Whenever any member of the state police

19-17

hired prior to July 1, 2007 has served for twenty (20) years, he or she may retire therefrom or he

19-18

or she may be retired by the superintendent with the approval of the governor, and in either event

19-19

a sum equal to one-half (1/2) of the whole salary for the position from which he or she retired

19-20

determined on the date he or she receives his or her first retirement payment shall be paid him or

19-21

her during life.

19-22

      (b) For purposes of this section, the term "whole salary" means:

19-23

      (1) For each member who retired prior to July 1, 1966, "whole salary" means the base

19-24

salary for the position from which he or she retired as the base salary for that position was

19-25

determined on July 31, 1972;

19-26

      (2) For each member who retired between July 1, 1966 and June 30, 1973, "whole

19-27

salary" means the base salary for the position from which he or she retired as the base salary,

19-28

implemented by the longevity increment, for that position was determined on July 31, 1972 or on

19-29

the date of his or her retirement, whichever is greater;

19-30

      (3) For each member who retired or who retires after July 1, 1973 "whole salary" means

19-31

the base salary, implemented by the longevity increment, holiday pay, and clothing allowance, for

19-32

the position from which he or she retired or retires.

19-33

      (c) (1) Any member who retired prior to July 1, 1977 shall receive a benefits payment

19-34

adjustment equal to three percent (3%) of his or her original retirement, as determined in

20-1

subsection (b) of this section, in addition to his or her original retirement allowance. In each

20-2

succeeding year thereafter during the month of January, the retirement allowance shall be

20-3

increased an additional three percent (3%) of the original retirement allowance, not compounded,

20-4

to be continued until January 1, 1991. For the purposes of the computation, credit shall be given

20-5

for a full calendar year regardless of the effective date of the service retirement allowance. For

20-6

purposes of this subsection, the benefits payment adjustment shall be computed from January 1,

20-7

1971 or the date of retirement, whichever is later in time.

20-8

      (2) Any member of the state police who retires pursuant to the provisions of this chapter

20-9

on or after January 1, 1977, shall on the first day of January, next following the third anniversary

20-10

date of the retirement receive a benefits payment adjustment, in addition to his or her retirement

20-11

allowance, in an amount equal to three percent (3%) of the original retirement allowance. In each

20-12

succeeding year thereafter during the month of January, the retirement allowance shall be

20-13

increased an additional three percent (3%) of the original retirement allowance, not compounded,

20-14

to be continued until January 1, 1991. For the purposes of the computation, credit shall be given

20-15

for a full calendar year regardless of the effective date of the service retirement allowance.

20-16

      (3) Any retired member of the state police who is receiving a benefit payment

20-17

adjustment pursuant to subdivisions (1) and (2) of this section shall beginning January 1, 1991

20-18

and ending June 30, 2012, receive a benefits payment adjustment equal to fifteen hundred dollars

20-19

($1,500).

20-20

      (d) The benefits payment adjustment as provided in this section shall apply to and be in

20-21

addition to the retirement benefits under the provisions of section 42-28-5, and to the injury and

20-22

death benefits under the provisions of section 42-28-21.

20-23

      (e) (1) Any member who retires after July 1, 1972 and is eligible to retire prior to July 1,

20-24

2012 and who has served beyond twenty (20) years shall be allowed an additional amount equal

20-25

to three percent (3%) for each completed year served after twenty (20) years, but in no event shall

20-26

the original retirement allowance exceed sixty-five percent (65%) of his or her whole salary as

20-27

defined in subsection (b) hereof or sixty-five percent (65%) of his or her salary as defined in

20-28

subsection (b) hereof in his or her twenty-fifth (25th) year whichever is less.

20-29

      (2) Each member who retired prior to July 1, 1975, shall be entitled to all retirement

20-30

benefits as set forth above or shall be paid benefits as set forth in subdivision (b)(1) with "whole

20-31

salary" meaning the base salary for the position from which he or she retired as the base salary for

20-32

the position was determined on July 1, 1975, whichever is greater.

20-33

      (f) (1) Any member who retires, has served as a member for twenty (20) years or more,

20-34

and who served for a period of six (6) months or more of active duty in the armed service of the

21-1

United States or in the merchant marine service of the United States as defined in section 2 of

21-2

chapter 1721 of the Public Laws, 1946, may purchase credit for such service up to a maximum of

21-3

two (2) years; provided that any member who has served at least six (6) months or more in any

21-4

one year shall be allowed to purchase one year for such service and any member who has served a

21-5

fraction of less than six (6) months in his or her total service shall be allowed to purchase six (6)

21-6

months' credit for such service.

21-7

      (2) The cost to purchase these credits shall be ten percent (10%) of the member's first

21-8

year salary as a state policeman multiplied by the number of years and/or fraction thereof of such

21-9

armed service up to a maximum of two (2) years. The purchase price shall be paid into the

21-10

general fund. For members hired on or after July 1, 1989, the purchase price shall be paid into a

21-11

restricted revenue account entitled "state police retirement benefits" and shall be held in trust.

21-12

      (3) There will be no interest charge provided the member makes such purchase during

21-13

his or her twentieth (20th) year or within five (5) years from May 18, 1981, whichever is later,

21-14

but will be charged regular rate of interest as defined in section 36-8-1 as amended to date of

21-15

purchase from the date of his or her twentieth (20th) year of state service or five (5) years from

21-16

May 18, 1981, whichever is later.

21-17

      (4) In no event shall the original retirement allowance exceed sixty-five percent (65%) of

21-18

his or her whole salary as defined in subsection (b) hereof or sixty-five percent (65%) of his or

21-19

her salary as defined in subsection (b) hereof in his or her twenty-fifth (25th) year, whichever is

21-20

less.

21-21

      (g) The provisions of this section shall not apply to civilian employees in the Rhode

21-22

Island state police; and, further, from and after April 28, 1937, chapters 8 -- 10, inclusive, of title

21-23

36 shall not be construed to apply to the members of the Rhode Island state police, except as

21-24

provided by sections 36-8-3, 36-10-1.1, 42-28-22.1, and 42-28-22.2, and section 36-8-1(5) and

21-25

(8)(a) effective July 1, 2012.

21-26

      (h) Any member of the state police other than the superintendent of state police, who is

21-27

hired prior to July 1, 2007 and who has served for twenty-five (25) years or who has attained the

21-28

age of sixty-two (62) years, whichever shall first occur, shall retire therefrom.

21-29

      (i) (1) Any member of the state police, other than the superintendent, who is hired on or

21-30

after July 1, 2007 and who has served for twenty-five (25) years, may retire therefrom or he or

21-31

she may be retired by the superintendent with the approval of the governor, and shall be entitled

21-32

to a retirement allowance of fifty percent (50%) of his or her "whole salary" as defined in

21-33

subsection (b) hereof.

22-34

      (2) Any member of the state police who is hired on or after July 1, 2007 may serve up to

22-35

a maximum of thirty (30) years, and shall be allowed an additional amount equal to three percent

22-36

(3.0%) for each completed year served after twenty-five (25) years, but in no event shall the

22-37

original retirement allowance exceed sixty-five percent (65%) of his or her "whole salary" as

22-38

defined in subsection (b) hereof.

22-39

      (j) Effective July 1, 2012, any other provision of this section notwithstanding:

22-40

      (1) Any member of the state police, other than the superintendent of state police, who is

22-41

not eligible to retire on or prior to June 30, 2012 may retire at any time subsequent to the date the

22-42

member's retirement allowance equals or exceeds fifty percent (50%) of average compensation as

22-43

defined in section 36-8-1(5)(a), provided that a member shall retire upon the first to occur of:

22-44

      (i) The date the member's retirement allowance equals sixty-five percent (65%); or

22-45

      (ii) The later of the attainment of age sixty-two (62) or completion of five (5) years of

22-46

service; provided however, any current member as of June 30, 2012 who has not accrued fifty

22-47

percent (50%) upon attaining the age of sixty-two (62) shall retire upon accruing fifty percent

22-48

(50%); and upon retirement a member shall receive a retirement allowance which shall equal:

22-49

      (A) For members hired prior to July 1, 2007 the sum of (i), (ii) and (iii) where

22-50

      (i) Is calculated as the member's years of total service before July 1, 2012 multiplied by

22-51

two and one half percent (2.5%) of average compensation for a member's first twenty (20) total

22-52

years,

22-53

      (ii) Is calculated as the member's years of total service before July 1, 2012 in excess of

22-54

twenty (20) years not to exceed twenty-five (25) years multiplied by three percent (3%) of

22-55

average compensation, and

22-56

      (iii) Is the member's years of total service on or after July 1, 2012 multiplied by two

22-57

percent (2%) of average compensation as defined in section 36-8-1(5)(a).

22-58

      (B) For members hired on or after July 1, 2007, the member's retirement allowance shall

22-59

be calculated as the member's years of total contributory service multiplied by two percent (2%)

22-60

of average compensation.

22-61

      (C) Any member of the state police who is eligible to retire on or prior to June 30, 2012

22-62

shall retire with a retirement allowance calculated in accordance with paragraph (a) and (e) above

22-63

except that whole salary shall be defined as final compensation where compensation for purposes

22-64

of this section and section 42-28-22.1 includes base salary, longevity and holiday pay.

22-65

      (D) Notwithstanding the preceding provisions, in no event shall a member's final

22-66

compensation be lower than his or her final compensation determined as of June 30, 2012.

22-67

      (2) In no event shall a member's original retirement allowance under any provisions of

22-68

this section exceed sixty-five percent (65%) of his or her average compensation.

23-1

      (3) For each member who retires on or after July 1, 2012, except as provided in

23-2

paragraph (j)(1)(C) above, compensation and average compensation shall be defined in

23-3

accordance with section 36-8-1(5)(a) and (8), provided that for a member whose regular work

23-4

period exceeds one hundred forty-seven (147) hours over a twenty-four (24) day period at any

23-5

time during the four (4) year period immediately prior to his/her retirement that member shall

23-6

have up to four hundred (400) hours of his/her pay for regularly scheduled work earned during

23-7

this period shall be included as "compensation" and/or "average compensation" for purposes of

23-8

this section and section 42-28-22.1.

23-9

      (4) (i) Notwithstanding the prior paragraphs of this section, and subject to paragraph

23-10

paragraphs (4)(ii) and (7) below, for all present and former members, active and retired members,

23-11

and beneficiaries receiving any retirement, disability or death allowance or benefit of any kind,

23-12

whether for or on behalf of a non-contributory member or contributory member, the annual

23-13

benefit adjustment provided in any calendar year under this section shall be equal to (A)

23-14

multiplied by (B) where (A) is equal to the percentage determined by subtracting five and one-

23-15

half percent (5.5%) (the "subtrahend") from the Five-Year Average Investment Return of the

23-16

retirement system determined as of the last day of the plan year preceding the calendar year in

23-17

which the adjustment is granted, said percentage not to exceed four percent (4%) and not to be

23-18

less than zero percent (0%), and (B) is equal to the lesser of the member's retirement allowance or

23-19

the first twenty-five thousand dollars ($25,000) of retirement allowance, such twenty-five

23-20

thousand dollars ($25,000) amount to be indexed annually in the same percentage as determined

23-21

under (4)(i)(A) above. The "Five-Year Average Investment Return" shall mean the average of the

23-22

investment returns for the most recent five (5) plan years as determined by the retirement board.

23-23

Subject to paragraph (4)(ii) below, the benefit adjustment provided by this paragraph shall

23-24

commence upon the third (3rd) anniversary of the date of retirement or the date on which the

23-25

retiree reaches age fifty-five (55), whichever is later. In the event the retirement board adjusts the

23-26

actuarially assumed rate of return for the system, either upward or downward, the subtrahend

23-27

shall be adjusted either upward or downward in the same amount.

23-28

      (ii) Except as provided in paragraph (4)(iii), the benefit adjustments under this section

23-29

for any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

23-30

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

23-31

State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

23-32

exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all

23-33

members for such plan year.

24-34

      In determining whether a funding level under this paragraph (4)(ii) has been achieved,

24-35

the actuary shall calculate the funding percentage after taking into account the reinstatement of

24-36

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

24-37

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

24-38

      (iii) Notwithstanding paragraph (4)(ii), in each fifth plan year commencing after June 30,

24-39

2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five

24-40

(5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph

24-41

(4)(i) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island,

24-42

the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated

24-43

by the system's actuary on an aggregate basis, exceeds eighty percent (80%).

24-44

      (iv) The provisions of this paragraph (j)(4) of section 42-28-22 shall become effective

24-45

July 1, 2012 and shall apply to any benefit adjustment not granted on or prior to June 30, 2012.

24-46

      (v) The cost-of-living adjustment as provided in this paragraph (j)(4) shall apply to and

24-47

be in addition to the retirement benefits under the provisions of section 42-28-5 and to the injury

24-48

and death benefits under the provisions of section 42-28-21.

24-49

      (5) Any member with contributory service on or after July 1, 2012, who has completed at

24-50

least five (5) years of contributory service but who has not retired in accordance with (j)(1)

24-51

above, shall be eligible to retire upon the attainment of member's Security retirement age as

24-52

defined in 36-8-1(19).

24-53

      (6) In no event shall a member's retirement allowance be less than the member's

24-54

retirement allowance calculated as of June 30, 2012 based on the member's years of total service

24-55

and whole salary as of June 30, 2012.

24-56

     (7) Notwithstanding the aforementioned, for all present and former members of the state

24-57

police, active and retired members, and beneficiaries receiving any retirement, disability or death

24-58

allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year

24-59

under this section shall not exceed one hundred five percent (105%) of the highest annual

24-60

compensation paid prior to retirement.

24-61

      (k) In calculating the retirement benefit for any member, the term base salary as used in

24-62

subdivision (b)(3) or average compensation as used in paragraph (j) shall not be affected by a

24-63

deferral of salary plan or a reduced salary plan implemented to avoid shutdowns or layoffs or to

24-64

effect cost savings. Basic salary shall remain for retirement calculation that which it would have

24-65

been but for the salary deferral or salary reduction due to a plan implemented to avoid shutdowns.

24-66

     SECTION 8. Section 8-3-15 of the General laws in Chapter 8-3 entitled “Justices of

24-67

Supreme, Superior, and Family Courts” is hereby mended to read as follows:

25-68

     8-3-15. Cost of living allowance. -- (a) All justices of the supreme court, superior court,

25-69

family court, or district court, or their surviving spouses or domestic partners, who retire after

25-70

January 1, 1970 and who receive a retirement allowance pursuant to the provisions of this title

25-71

shall, on the first day of January next following the third anniversary date of retirement, receive a

25-72

cost-of-living retirement adjustment in addition to his or her retirement allowance in an amount

25-73

equal to three percent (3%) of the original retirement allowance. In each succeeding year

25-74

thereafter during the month of January, the retirement allowance shall be increased an additional

25-75

three percent (3%) of the original allowance, not compounded, to be continued during the lifetime

25-76

of the justice or his or her surviving spouse or domestic partner. For the purpose of such

25-77

computation, credit shall be given for a full calendar year regardless of the effective date of the

25-78

retirement allowance.

25-79

      (b) Any justice who retired prior to January 31, 1977 shall be deemed for the purpose of

25-80

this section to have retired on January 1, 1977.

25-81

      (c) For justices not eligible to retire as of September 30, 2009 and not eligible upon

25-82

passage of this article, and for their beneficiaries, the cost of living adjustment described in

25-83

subsection (3) above shall only apply to the first thirty-five thousand dollars ($35,000) of

25-84

retirement allowance, indexed annually, and shall commence upon the third (3rd) anniversary of

25-85

the date of retirement or when the retiree reaches age sixty-five (65), whichever is later. The

25-86

thirty- five thousand dollar ($35,000) limit shall increase annually by the percentage increase in

25-87

the Consumer Price Index for all Urban Consumer (CPI-U) as published by the United States

25-88

Department of Labor Statistics determined as of September 30 of the prior calendar year or three

25-89

percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, of

25-90

retirement allowance shall be multiplied by the percentage of increase in the Consumer Price

25-91

Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor

25-92

Statistics determined as of September 30 of the prior calendar year or three percent (3%),

25-93

whichever is less, on the month following the anniversary date of each succeeding year. For

25-94

justices eligible to retire as of September 30, 2009 or eligible upon passage of this article, and for

25-95

their beneficiaries, the provisions of this subsection (c) shall not apply.

25-96

      (d) (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph

25-97

paragraphs (d)(2) and (5) below, for all present and former justices, active and retired justices,

25-98

and beneficiaries receiving any retirement, disability or death allowance or benefit of any kind,

25-99

whether provided for or on behalf of justices engaged on or prior to December 31, 1989 as a non-

25-100

contributory justice or engaged after December 31, 1989 as a contributory justice, the annual

25-101

benefit adjustment provided in any calendar year under this section shall be equal to (A)

25-102

multiplied by (B) where (A) is equal to the percentage determined by subtracting five and one-

26-1

half percent (5.5%) (the "subtrahend") from the Five-Year Average Investment Return of the

26-2

retirement system determined as of the last day of the plan year preceding the calendar year in

26-3

which the adjustment is granted, said percentage not to exceed four percent (4%) and not to be

26-4

less than zero percent (0%), and (B) is equal to the lesser of the justice's retirement allowance or

26-5

the first twenty-five thousand dollars ($25,000) of retirement allowance, such twenty-five

26-6

thousand dollars ($25,000) amount to be indexed annually in the same percentage as determined

26-7

under (d)(1)(A) above. The "Five-Year Average Investment Return" shall mean the average of

26-8

the investment return of the most recent five (5) plan years as determined by the retirement board.

26-9

Subject to paragraph (d)(2) below, the benefit adjustment provided by this paragraph shall

26-10

commence upon the third (3rd) anniversary of the date of retirement or the date on which the

26-11

retiree reaches his or her Social Security retirement age, whichever is later. In the event the

26-12

retirement board adjusts the actuarially assumed rate of return for the system, either upward or

26-13

downward, the subtrahend shall be adjusted either upward or downward in the same amount.

26-14

      (2) Except as provided in paragraph (d)(3), the benefit adjustments under this section for

26-15

any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

26-16

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

26-17

State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

26-18

exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all

26-19

justices for such plan year.

26-20

      In determining whether a funding level under this paragraph (d)(2) has been achieved,

26-21

the actuary shall calculate the funding percentage after taking into account the reinstatement of

26-22

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

26-23

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

26-24

      (3) Notwithstanding paragraph (d)(2), in each fifth plan year commencing after June 30,

26-25

2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five

26-26

(5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph

26-27

(d)(1) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode

26-28

Island, the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust,

26-29

calculated by the system's actuary on an aggregate basis, exceeds eighty percent (80%)

26-30

      (4) Notwithstanding any other provision of this chapter, the provisions of this paragraph

26-31

(d) of section 8-3-15 shall become effective July 1, 2012 and shall apply to any benefit

26-32

adjustment not granted on or prior to June 30, 2012.

26-33

     (5) Notwithstanding the aforementioned, for all present and former Justices of the

26-34

Supreme, Superior, and Family Courts, active and retired members, and beneficiaries receiving

27-1

any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment

27-2

provided in any calendar year under this section shall not exceed one hundred five percent

27-3

(105%) of the highest annual compensation paid prior to retirement.

27-4

     SECTION 9. Chapter 8-8 of the General Laws entitled “District Court” is hereby

27-5

amended by adding thereto the following section:

27-6

     8-8-10.3. Maximum Retirement Allowance. -- Notwithstanding the aforementioned, for

27-7

all present and former judges, active and retired members, and beneficiaries receiving any

27-8

retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment

27-9

provided in any calendar year under this section shall not exceed one hundred five percent

27-10

(105%) of the highest annual compensation paid prior to retirement.

27-11

     SECTION 10. Section 8-8.2-10 of the General Laws in Chapter 8-8.2 entitled “Traffic

27-12

Tribunal” is hereby amended to read as follows:

27-13

     8-8.2-12. Additional benefits payable to retired judges and their surviving spouses

27-14

or domestic partners. -- (a) All judges of the administrative adjudication court and all judges of

27-15

the administrative adjudication court who have been reassigned to the traffic tribunal, or their

27-16

surviving spouses or domestic partners, who retire after January 1, 1970 and who receive a

27-17

retirement allowance pursuant to the provisions of this title, shall, on the first day of January, next

27-18

following the third anniversary of the retirement, receive a cost of living retirement adjustment in

27-19

addition to his or her retirement allowance in an amount equal to three percent (3%) of the

27-20

original retirement allowance. In each succeeding year thereafter during the month of January, the

27-21

retirement allowance shall be increased an additional three percent (3%) of the original

27-22

allowance, compounded annually from the year cost of living adjustment was first payable to be

27-23

continued during the lifetime of the judge or his or her surviving spouse or domestic partner. For

27-24

the purpose of such computation, credit shall be given for a full calendar year regardless of the

27-25

effective date of the retirement allowance.

27-26

      (b) Any judge who retired prior to January 31, 1980, shall be deemed for the purpose of

27-27

this section to have retired on January 1, 1980.

27-28

      (c) For judges not eligible to retire as of September 30, 2009 and not eligible upon

27-29

passage of this article, and for their beneficiaries, the cost of living adjustment described in

27-30

subsection (a) above shall only apply to the first thirty-five thousand dollars ($35,000) of

27-31

retirement allowance, indexed annually, and shall commence upon the third (3rd) anniversary of

27-32

the date of retirement or when the retiree reaches age sixty-five (65), whichever is later. The

27-33

thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage increase in

27-34

the Consumer Price Index for all Urban Consumer (CPI-U) as published by the United States

28-1

Department of Labor Statistics determined as of September 30 of the prior calendar year or three

28-2

percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, of

28-3

retirement allowance shall be multiplied by the percentage of increase in the Consumer Price

28-4

Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor

28-5

Statistics determined as of September 30 of the prior calendar year or three percent (3%),

28-6

whichever is less on the month following the anniversary date of each succeeding year. For

28-7

judges eligible to retire as of September 30, 2009 or eligible upon passage of this article, and for

28-8

their beneficiaries, the provisions of this subsection (c) shall not apply.

28-9

      (d) (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph

28-10

paragraphs (d)(2) and (5) below, for all present and former justices, active and retired justices,

28-11

and beneficiaries receiving any retirement, disability or death allowance or benefit of any kind,

28-12

whether provided for or on behalf of justices engaged on or prior to December 31, 1989 as a non-

28-13

contributory justice or engaged after December 31, 1989 as a contributory justice, the annual

28-14

benefit adjustment provided in any calendar year under this section shall be equal to (A)

28-15

multiplied by (B) where (A) is equal to the percentage determined by subtracting five and one-

28-16

half percent (5.5%) (the "subtrahend") from the Five-Year Average Investment Return of the

28-17

retirement system determined as of the last day of the plan year preceding the calendar year in

28-18

which the adjustment is granted, said percentage not to exceed four percent (4%) and not to be

28-19

less than zero percent (0%), and (B) is equal to the lesser of the justice's retirement allowance or

28-20

the first twenty-five thousand dollars ($25,000) of retirement allowance, such twenty-five

28-21

thousand dollars ($25,000) amount to be indexed annually in the same percentage as determined

28-22

under (d)(1)(A) above. The "Five-Year Average Investment Return" shall mean the average of

28-23

the investment return of the most recent five (5) plan years as determined by the retirement board.

28-24

Subject to paragraph (d)(2) below, the benefit adjustment provided by this paragraph shall

28-25

commence upon the third (3rd) anniversary of the date of retirement or the date on which the

28-26

retiree reaches his or her Social Security retirement age, whichever is later. In the event the

28-27

retirement board adjusts the actuarially assumed rate of return for the system, either upward or

28-28

downward, the subtrahend shall be adjusted either upward or downward in the same amount.

28-29

      (2) Except as provided in paragraph (d)(3), the benefit adjustments under this section for

28-30

any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

28-31

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

28-32

State Police Retirements Benefits Trust, calculated by the system's actuary on an aggregate basis,

28-33

exceeds eighty percent (80%) in which even the benefit adjustment will be reinstated for all

28-34

justices for such plan year.

29-1

      In determining whether a funding level under this paragraph (d)(2) has been achieved,

29-2

the actuary shall calculate the funding percentage after taking into account the reinstatement of

29-3

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

29-4

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

29-5

      (3) Notwithstanding paragraph (d)(2), in each fifth plan year commencing after June 30,

29-6

2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five

29-7

(5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph

29-8

(d)(1) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode

29-9

Island, the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust,

29-10

calculated by the system's actuary on an aggregate basis, exceeds eighty percent (80%).

29-11

      (4) Notwithstanding any other provision of this chapter, the provisions of this paragraph

29-12

(d) of section 8-8.2-12 shall become effective July 1, 2012 and shall apply to any benefit

29-13

adjustment not granted on or prior to June 30, 2012.

29-14

     (5) Notwithstanding the aforementioned, for all present and former justices, active and

29-15

retired members, and beneficiaries receiving any retirement, disability or death allowance or

29-16

benefit of any kind, the annual benefit adjustment provided in any calendar year under this

29-17

section shall not exceed one hundred five percent (105%) of the highest annual compensation

29-18

paid prior to retirement.

29-19

     SECTION 11. Section 28-30-18 of the General Laws in Chapter 28-0 entitled “Workers'

29-20

Compensation Court” is hereby amended to read as follows:

29-21

     28-30-18. Additional benefits payable to retired judges and their surviving spouses

29-22

or domestic partners. -- (a) All judges of the workers' compensation court, or their surviving

29-23

spouses or domestic partners, who retire after January 1, 1970 and who receive a retirement

29-24

allowance pursuant to the provisions of this title, shall, on the first day of January next following

29-25

the third anniversary date of their retirement, receive a cost of living retirement adjustment in

29-26

addition to his or her retirement allowance in an amount equal to three percent (3%) of the

29-27

original retirement allowance. In each succeeding subsequent year during the month of January

29-28

the retirement allowance shall be increased an additional three percent (3%) of the original

29-29

allowance, compounded annually from the year the cost of living adjustment was first payable to

29-30

be continued during the lifetime of that judge or his or her surviving spouse or domestic partner.

29-31

For the purpose of that computation, credit shall be given for a full calendar year regardless of the

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effective date of the retirement allowance.

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      (b) Any judge who retired prior to January 31, 1980, shall be deemed for the purpose of

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this section to have retired on January 1, 1980.

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      (c) For judges not eligible to retire as of September 30, 2009 and not eligible upon

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passage of this article, and for their beneficiaries, the cost of living adjustment described in

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subsection (a) above shall only apply to the first thirty-five thousand dollars ($35,000) of

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retirement allowance, indexed annually, and shall commence upon the third (3rd) anniversary of

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the date of retirement or when the retiree reaches age sixty-five (65), whichever is later. The

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thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage increase in

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the Consumer Price Index for all Urban Consumer (CPI-U) as published by the United States

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Department of Labor Statistics determined as of September 30 of the prior calendar year or three

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percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, of

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retirement allowance shall be multiplied by the percentage of increase in the Consumer Price

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Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor

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Statistics determined as of September 30 of the prior calendar year or three percent (3%),

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whichever is less on the month following the anniversary date of each succeeding year. For

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judges eligible to retire as of September 30, 2009 or eligible upon passage of this article, and for

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their beneficiaries, the provisions of this subsection (c) shall not apply.

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      (d) (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph

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paragraphs (d)(2) and (5) below, for all present and former justices, active and retired justices,

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and beneficiaries receiving any retirement, disability or death allowance or benefit of any kind,

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whether provided for or on behalf of justices engaged on or prior to December 31, 1989 as a non-

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contributory justice or engaged after December 31, 1989 as a contributory justice, the annual

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benefit adjustment provided in any calendar year under this section shall be equal to (A)

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multiplied by (B) where (A) is equal to the percentage determined by subtracting five and one-

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half percent (5.5%) (the "subtrahend") from the Five-Year Average Investment Return of the

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retirement system determined as of the last day of the plan year preceding the calendar year in

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which the adjustment is granted, said percentage not to exceed four percent (4%) and not to be

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less than zero percent (0%), and (B) is equal to the lesser of the justice's retirement allowance or

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the first twenty-five thousand dollars ($25,000) of retirement allowance, such twenty-five

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thousand dollars ($25,000) amount to be indexed annually in the same percentage as determined

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under (d)(1)(A) above. The "Five-Year Average Investment Return" shall mean the average of

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the investment return of the most recent five (5) plan years as determined by the retirement board.

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Subject to paragraph (d)(2) below, the benefit adjustment provided by this paragraph shall

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commence upon the third (3rd) anniversary of the date of retirement or the date on which the

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retiree reaches his or her Social Security retirement age, whichever is later. In the event the

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retirement board adjusts the actuarially assumed rate of return for the system, either upward or

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downward, the subtrahend shall be adjusted either upward or downward in the same amount.

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      (2) Except as provided in paragraph (d)(3), the benefit adjustments under this section for

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any plan year shall be suspended in their entirely unless the GASB Funded Ratio of the

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Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

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State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

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exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all

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justices for such plan year.

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      In determining whether a funding level under this paragraph (d)(2) has been achieved,

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the actuary shall calculate the funding percentage after taking into account the reinstatement of

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any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

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mean the ratio of the actuarial value of assets to the actuarial accrued liability.

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      (3) Notwithstanding paragraph (d)(2), in each fifth plan year commencing after June 30,

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2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five

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(5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph

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(d)(1) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode

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Island, the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust,

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calculated by the system's actuary on an aggregate basis, exceeds eighty percent (80%).

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      (4) Notwithstanding any other provision of this chapter, the provisions of this paragraph

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(d) of section 28-30-18 shall become effective July 1, 2012 and shall apply to any benefit

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adjustment not granted on or prior to June 30, 2012.

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     (5) Notwithstanding the aforementioned, for all present and former justices, active and

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retired members, and beneficiaries receiving any retirement, disability or death allowance or

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benefit of any kind, the annual benefit adjustment provided in any calendar year under this

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section shall not exceed one hundred five percent (105%) of the highest annual compensation

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paid prior to retirement.

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     SECTION 12. Chapter 45-6 of the General Laws entitled “Ordinances” is hereby

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amended by adding thereto the following section:

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     45-6-12. Maximum Retirement Allowance. -- The city or town councils of the various

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cities or towns may, by a two-thirds (2/3) majority vote, provide by ordinance or through

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collective bargaining, that all present and former, personnel, active and retired members, and

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beneficiaries receiving any retirement, disability or death allowance or benefit of any kind, the

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annual benefit adjustment provided in any calendar year under this section shall not exceed one

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hundred five percent (105%) of the highest annual compensation paid prior to retirement.

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     SECTION 13. This act shall take effect upon passage.

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LC00233

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM --

CONTRIBUTIONS AND BENEFITS

***

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     This act would amend statutes relating to the various state and municipal retirement

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systems to provide that the annual benefit adjustment provided in any calendar year not exceed

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one hundred five percent (105%) of the highest annual compensation paid prior to retirement for

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all present and former personnel, active and retired members, and beneficiaries receiving any

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retirement, disability or death allowance or benefit of any kind.

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     The act would take effect upon passage.

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LC00233

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