2024 -- S 2865

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LC005300

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

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

CONTRIBUTIONS AND BENEFITS

     Introduced By: Senators Raptakis, Tikoian, LaMountain, Burke, McKenney, F.
Lombardi, Britto, and Sosnowski

     Date Introduced: March 22, 2024

     Referred To: Senate Finance

     (General Treasurer)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 36-10-2.1 and 36-10-39 of the General Laws in Chapter 36-10

entitled "Retirement System — Contributions and Benefits" are hereby amended to read as follows:

     36-10-2.1. Actuarial cost method.

     (a) To determine the employer contribution rate for the State of Rhode Island for fiscal year

2002 and for all fiscal years subsequent, the actuary shall compute the costs under chapter 10 of

title 36 using the entry age normal cost method.

     (b) The determination of the employer contribution rate for fiscal year 2013 shall include

a reamortization of the current Unfunded Actuarial Accrued Liability (UAAL) over a closed

twenty-five (25) year period. After an initial period of five (5) years, future actuarial gains and

losses occurring within a plan year will be amortized over individual new twenty (20) year closed

periods.

     (c) The determination of the employer contribution rate commencing with fiscal year 2017

shall include a re-amortization of the current unfunded actuarial accrued liability (UAAL)

attributable to the sixty percent (60%) of contribution responsibility not partitioned to the state in

§ 16-16-22 over a closed twenty-five (25) year period. This will be accomplished by dividing the

UAAL as of June 30, 2014 into two (2) separate amortization periods. Future actuarial gains and

losses occurring within a plan year will be amortized over individual new twenty (20) year closed

periods and allocated in the forty percent (40%) state / sixty percent (60%) municipal proportion

set forth in § 16-16-22.

     (d) Commencing with fiscal year 2025, any benefit changes occurring within a plan year

that result in an increase to actuarially calculated plan costs shall be amortized over individual new

five (5) year closed periods and allocated in the forty percent (40%) state/sixty percent (60%)

municipal proportion set forth in § 16-16-22.

     36-10-39. Fiscal impact of proposed legislation impacting the retirement system.

     Proposed legislation which directly impacts the retirement system can potentially affect the

benefits of all plan participants and beneficiaries. Since it is in the best interests of plan participants

and beneficiaries to determine the financial consequences of any proposed legislation which would

directly impact the state’s liability to the retirement system, such legislation shall not be approved

by the general assembly unless an explanatory statement or note, prepared and paid for by the

employees’ retirement system of the state of Rhode Island is appended to the proposed legislation

which actuarially calculates, based upon approved retirement board assumptions, the projected

twenty (20) year cost of the proposed legislation. Commencing with fiscal year 2025, any benefit

changes from proposed legislation which would increase actuarially calculated plan costs for the

state or any municipal system within a plan year shall be amortized over individual new five (5)

year closed periods. These statements or notes shall be known as “pension impact notes,” and they

shall accompany each such bill or resolution prior to consideration of the house in which the bill or

resolution originated. The reasonable cost of preparing pension impact notes shall be charged as an

administrative expense and paid from the retirement system’s restricted receipts account

established pursuant to § 36-8-10.1. Only the chair of the senate committee on finance with the

approval of the president of the senate can request a pension impact note on proposed legislation

that originates in the senate. Only the chair of the house committee on finance with the approval of

the speaker of the house can request a pension impact note on proposed legislation that originates

in the house. The governor can request a pension impact note on proposed legislation recommended

in the appropriation acts required by §§ 35-3-7 or 35-3-8. This section shall be in addition to the

requirements of chapter 12 of title 22.

     SECTION 2. Sections 45-21-42.2 and 45-21-43.1 of the General Laws in Chapter 45-21

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

     45-21-42.2. Fiscal impact of proposed legislation impacting the retirement system.

     Proposed legislation which directly impacts the retirement system can potentially affect the

benefits of all plan participants and beneficiaries. Since it is in the best interests of plan participants

and beneficiaries to determine the financial consequences of any proposed legislation which would

directly impact the liability to the retirement system of participating municipalities, such legislation

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shall not be approved by the general assembly unless an explanatory statement or note, prepared

and paid for by the retirement system, is appended to the proposed legislation which actuarially

calculates, based upon approved retirement board assumptions, the projected twenty (20) year cost

of the proposed legislation. Commencing with fiscal year 2025, any benefit changes from proposed

legislation which would increase actuarially calculated plan costs for the state or any municipal

system within a plan year shall be amortized over individual new five (5) year closed periods. These

statements or notes shall be known as “pension impact notes,” and they shall accompany each such

bill or resolution prior to consideration by the chamber in which the bill or resolution originated.

The reasonable cost of preparing pension impact notes shall be charged as an administrative

expense and paid from the retirement system’s restricted receipts account established pursuant to §

36-8-10.1. Only the chair of the senate committee on finance with the approval of the president of

the senate can request a pension impact note on proposed legislation that originates in the senate.

Only the chair of the house committee on finance with the approval of the speaker of the house can

request a pension impact note on proposed legislation that originates in the house. The governor

can request a pension impact note on proposed legislation recommended in the appropriation acts

required by §§ 35-3-7 or 35-3-8. This section shall be in addition to the requirements of chapter 12

of title 22. If one or more participating municipalities requests an actuarial study or other study that

impacts only the liability of the participating municipality making the request, the participating

municipality making the request shall pay any and all costs associated with the preparation of the

study or report.

     45-21-43.1. Actuarial cost method.

     (a) To determine the employer contribution rate for any participating municipality, the

actuary shall compute the costs under chapters 21 and 21.2 of title 45 using the entry age normal

cost method.

     (b) The determination of the employer contribution rate for fiscal year 2013 shall include

a re-amortization of the unfunded actuarial accrued liability (UAAL) over a closed twenty-five (25)

year period. After an initial period of five (5) years, future actuarial gains and losses occurring

within a plan year will be amortized over individual new twenty (20) year closed periods.

     (c) The determination of the employer contribution rate commencing with fiscal year 2017

shall include a re-amortization of the current unfunded actuarial accrued liability as of June 30,

2014, over a closed twenty-five (25) year period. Future actuarial gains and losses occurring within

a plan year will be amortized over individual new twenty (20) year closed periods. Employers shall

have the one-time option before August 1, 2015, to remain under the amortization schedule set

forth in subsection (b) above.

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     (d) Commencing with fiscal year 2025, any benefit changes occurring within a plan year

that result in an increase to actuarially calculated plan costs shall be amortized over individual new

five (5) year closed periods.

     SECTION 3. This act shall take effect upon passage.

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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 require any benefit enhancements afforded under the employees' retirement

system of Rhode Island or the municipal employees' retirement system to be amortized over

individual five (5) year closed periods.

     This act would take effect upon passage.

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