2024 -- S 2979 | |
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LC005932 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2024 | |
____________ | |
A N A C T | |
RELATING TO EDUCATION -- TEACHERS' RETIREMENT -- PUBLIC OFFICERS AND | |
EMPLOYEES -- RETIREMENT SYSTEM | |
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Introduced By: Senators Felag, Pearson, F. Lombardi, DiPalma, Sosnowski, Ciccone, | |
Date Introduced: April 11, 2024 | |
Referred To: Senate Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Section 16-16-13 of the General Laws in Chapter 16-16 entitled "Teachers’ |
2 | Retirement [See Title 16 Chapter 97 — The Rhode Island Board of Education Act]" is hereby |
3 | amended to read as follows: |
4 | 16-16-13. Amount of service retirement allowance. |
5 | (a)(1)(i) For teachers eligible to retire on or before September 30, 2009, upon retirement |
6 | from service under § 16-16-12 a teacher whose membership commenced before July 1, 2005, and |
7 | who has completed at least ten (10) years of contributory service on or before July 1, 2005, shall, |
8 | receive a retirement allowance which shall be determined in accordance with schedule A for service |
9 | prior to July 1, 2012. |
10 | SCHEDULE A |
11 | YEARS OF SERVICE PERCENTAGE ALLOWANCE |
12 | 1st through 10th inclusive 1.7% |
13 | 11th through 20th inclusive 1.9% |
14 | 21st through 34th inclusive 3.0% |
15 | 35th 2.0% |
16 | (ii) For teachers eligible to retire on or after October 1, 2009, who were not eligible to retire |
17 | on or before September 30, 2009, upon retirement for service under § 16-16-12, a teacher whose |
18 | membership commenced before July 1, 2005, and who has completed at least ten (10) years of |
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1 | contributory service on or before July 1, 2005, shall receive a retirement allowance which shall be |
2 | determined in accordance with schedule A above for service on before September 30, 2009, and |
3 | shall be determined in accordance with schedule B in subsection (a)(2) below for service on or after |
4 | October 1, 2009, and prior to July 1, 2012: |
5 | (2) Upon retirement from service under § 16-16-12 a teacher whose membership |
6 | commenced after July 1, 2005, or who has not completed at least ten (10) years of contributory |
7 | service as of July 1, 2005, shall receive a retirement allowance which shall be determined in |
8 | accordance with Schedule B for service prior to July 1, 2012. |
9 | SCHEDULE B |
10 | YEARS OF SERVICE PERCENTAGE ALLOWANCE |
11 | 1st through 10th inclusive 1.60% |
12 | 11th through 20th inclusive 1.80% |
13 | 21st through 25th inclusive 2.0% |
14 | 26th through 30th inclusive 2.25% |
15 | 31st through 37th inclusive 2.50% |
16 | 38th 2.25% |
17 | (b) The retirement allowance of any teacher whose membership commenced before July 1, |
18 | 2005, and who has completed at least ten (10) years of contributory service on or before July 1, |
19 | 2005, shall be in an amount equal to the percentage allowance specified in subsection (a)(1) of his |
20 | or her average highest three (3) consecutive years of compensation multiplied by the number of |
21 | years of total service, but in no case to exceed eighty percent (80%) of the compensation, payable |
22 | at completion of thirty-five (35) years of service; provided, however, for teachers retiring on or |
23 | after October 1, 2009, who were not eligible to retire as of September 30, 2009, and who do retire |
24 | prior to July 1, 2024, the calculation shall be based on the average highest five (5) consecutive |
25 | years of compensation. For members eligible to and who retire on or after July 1, 2024, the |
26 | calculation shall be based on the average highest three (3) consecutive years of compensation. |
27 | The retirement allowance of any teacher whose membership commenced after July 1, 2005, |
28 | or who has not completed at least ten (10) years of contributory service as of July 1, 2005, shall be |
29 | in an amount equal to the percentage allowance specified in Schedule B of his or her average |
30 | highest three (3) consecutive years of compensation multiplied by the number of years of total |
31 | service, but in no case to exceed seventy-five percent (75%) of the compensation, payable at |
32 | completion of thirty-eight (38) years of service; provided, however, for teachers retiring on or after |
33 | October 1, 2009, who were not eligible to retire as of September 30, 2009, and who do retire prior |
34 | to July 1, 2024, the calculation shall be based on the average highest five (5) consecutive years of |
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1 | compensation. For members eligible to and who retire on or after July 1, 2024, the calculation shall |
2 | be based on the average highest three (3) consecutive years of compensation. |
3 | Any teacher who has in excess of thirty-five (35) years on or before June 2, 1985, shall not |
4 | be entitled to any refund, and any teacher with thirty-five (35) years or more on or after June 2, |
5 | 1985, shall contribute from July 1, 1985, until his or her retirement. |
6 | (c) For service prior to July 2012, the retirement allowance of a teacher shall be determined |
7 | in accordance with subsections (a)(1) and (a)(2) above. For service on and after July 1, 2012: |
8 | (i) For teachers with fewer than twenty (20) years of total service as of June 30, 2012, a |
9 | teacher’s retirement allowance shall be equal to one percent (1%) of the teacher’s average |
10 | compensation multiplied by the teacher’s years of total service on and after July 1, 2012; and |
11 | (ii) For teachers with twenty (20) or more years of total service as of June 30, 2012, a |
12 | teacher’s retirement allowance shall be equal to one percent (1%) of the teacher’s average |
13 | compensation multiplied by the teacher’s years of total service between July 1, 2012, and June 30, |
14 | 2015, and two percent (2%) of the teacher’s average compensation multiplied by the teacher’s years |
15 | of total service on and after July 1, 2015. For purposes of computing a teacher’s total service under |
16 | the preceding sentence, service purchases shall be included in total service only with respect to |
17 | those service purchases approved prior to June 30, 2012, and those applications for service |
18 | purchases received by the retirement system on or before June 30, 2012. In no event shall a |
19 | teacher’s retirement allowance exceed the maximum limitations set forth in subsection (b) above. |
20 | SECTION 2. Section 36-8-1 of the General Laws in Chapter 36-8 entitled "Retirement |
21 | System — Administration" is hereby amended to read as follows: |
22 | 36-8-1. Definition of terms. |
23 | The following words and phrases as used in chapters 8 to 10 of this title unless a different |
24 | meaning is plainly required by the context, shall have the following meanings: |
25 | (1) “Accumulated contributions” shall mean the sum of all the amounts deducted from the |
26 | compensation of a member and credited to his or her individual pension account. |
27 | (2) “Active member” shall mean any employee of the state of Rhode Island as defined in |
28 | this section for whom the retirement system is currently receiving regular contributions pursuant to |
29 | §§ 36-10-1 and 36-10-1.1. |
30 | (3) “Actuarial equivalent” shall mean an allowance or benefit of equal value to any other |
31 | allowance or benefit when computed upon the basis of the actuarial tables in use by the system. |
32 | (4) “Annuity reserve” shall mean the present value of all payments to be made on account |
33 | of any annuity, benefit, or retirement allowance granted under the provisions of chapter 10 of this |
34 | title computed upon the basis of such mortality tables as shall be adopted from time to time by the |
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1 | retirement board with regular interest. |
2 | (5)(a) “Average compensation” for members eligible to retire as of September 30, 2009 |
3 | shall mean the average of the highest three (3) consecutive years of compensation, within the total |
4 | service when the average compensation was the highest. For members eligible to retire on or after |
5 | October 1, 2009, and who do retire prior to July 1, 2024, “Average compensation” shall mean the |
6 | average of the highest five (5) consecutive years of compensation within the total service when the |
7 | average compensation was the highest. For members eligible to and who retire on or after July 1, |
8 | 2024, "average compensation" means the average of the highest three (3) consecutive years of |
9 | compensation within the total service when the average compensation was the highest. |
10 | (b) For members who become eligible to retire on or after July 1, 2012, if more than one- |
11 | half (½) of the member’s total years of service consist of years of service during which the member |
12 | devoted less than thirty (30) business hours per week to the service of the state, but the member’s |
13 | average compensation consists of three (3) or more years during which the member devoted more |
14 | than thirty (30) business hours per week to the service of the state, such member’s average |
15 | compensation shall mean the average of the highest ten (10) consecutive years of compensation |
16 | within the total service when the average compensation was the highest; provided however, |
17 | effective July 1, 2015, if such member’s average compensation as defined in subsection (a) Above |
18 | is equal to or less than thirty-five thousand dollars ($35,000), such amount to be indexed annually |
19 | in accordance with § 36-10-35(h)(1)(B), such member’s average compensation shall mean the |
20 | greater of: (i) The average of the highest ten (10) consecutive years of compensation within the |
21 | total service when the average compensation was the highest; or (ii) The member’s average |
22 | compensation as defined in subsection (a) above. To protect a member’s accrued benefit on June |
23 | 30, 2012 under this § 36-8-1(5)(b), in no event shall a member’s average compensation be lower |
24 | than his or her average compensation determined as of June 30, 2012. |
25 | (6) “Beneficiary” shall mean any person in receipt of a pension, an annuity, a retirement |
26 | allowance, or other benefit as provided by chapter 10 of this title. |
27 | (7) “Casual employee” shall mean those persons hired for a temporary period, a period of |
28 | emergency or an occasional period. |
29 | (8) “Compensation” as used in chapters 8 — 10 of this title, chapters 16 and 17 of title 16, |
30 | and chapter 21 of title 45 shall mean salary or wages earned and paid for the performance of duties |
31 | for covered employment, including regular longevity or incentive plans approved by the board, but |
32 | shall not include payments made for overtime or any other reason other than performance of duties, |
33 | including but not limited to the types of payments listed below: |
34 | (i) Payments contingent on the employee having terminated or died; |
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1 | (ii) Payments made at termination for unused sick leave, vacation leave, or compensatory |
2 | time; |
3 | (iii) Payments contingent on the employee terminating employment at a specified time in |
4 | the future to secure voluntary retirement or to secure release of an unexpired contract of |
5 | employment; |
6 | (iv) Individual salary adjustments which are granted primarily in anticipation of the |
7 | employee’s retirement; |
8 | (v) Additional payments for performing temporary or extra duties beyond the normal or |
9 | regular work day or work year. |
10 | (9) “Employee” shall mean any officer or employee of the state of Rhode Island whose |
11 | business time is devoted exclusively to the services of the state, but shall not include one whose |
12 | duties are of a casual or seasonal nature. The retirement board shall determine who are employees |
13 | within the meaning of this chapter. The governor of the state, the lieutenant governor, the secretary |
14 | of state, the attorney general, the general treasurer, and the members of the general assembly, ex |
15 | officio, shall not be deemed to be employees within the meaning of that term unless and until they |
16 | elect to become members of the system as provided in § 36-9-6, but in no case shall it deem as an |
17 | employee, for the purposes of this chapter, any individual who devotes less than twenty (20) |
18 | business hours per week to the service of the state, and who receives less than the equivalent of |
19 | minimum wage compensation on an hourly basis for his or her services, except as provided in § |
20 | 36-9-24. Any commissioner of a municipal housing authority or any member of a part-time state, |
21 | municipal or local board, commission, committee or other public authority shall not be deemed to |
22 | be an employee within the meaning of this chapter. |
23 | (10) “Full actuarial costs” or “full actuarial value” shall mean the lump sum payable by a |
24 | member claiming service credit for certain employment for which that payment is required which |
25 | is determined according to the age of the member and the employee’s annual rate of compensation |
26 | at the time he or she applies for service credit and which is expressed as a rate percent of the |
27 | employee’s annual rate of compensation to be multiplied by the number of years for which he or |
28 | she claims service credit as prescribed in a schedule adopted by the retirement board from time to |
29 | time on the basis of computation by the actuary. Except as provided in §§ 16-16-7.1, 36-5-3, 36-9- |
30 | 31, 36-10-10.4, 45-21-53, 36-10-8, 45-21-29, 8-3-16(c), 8-8-10.1(c), 42-28-22.1(d) and 28-30- |
31 | 18.1(c): |
32 | (i) all service credit purchases requested after June 16, 2009 and prior to July 1, 2012, shall |
33 | be at full actuarial value; and |
34 | (ii) all service credit purchases requested after June 30, 2012 shall be at full actuarial value |
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1 | which shall be determined using the system’s assumed investment rate of return minus one percent |
2 | (1%). |
3 | The rules applicable to a service credit purchase shall be the rules of the retirement system |
4 | in effect at the time the purchase application is submitted to the retirement system. |
5 | (11) “Funded ratio” shall mean the ratio of the actuarial value of assets to the actuarial |
6 | accrued liability consistent with the funding policy of the retirement board as defined in § 36-8-4. |
7 | (12) “Inactive member” shall mean a member who has withdrawn from service as an |
8 | employee but who has not received a refund of contributions. |
9 | (13) “Members” shall mean any person included in the membership of the retirement |
10 | system as provided in §§ 36-9-1 — 36-9-7. |
11 | (14) “Prior service” shall mean service as a member rendered before July 1, 1936, certified |
12 | on his or her prior service certificate and allowable as provided in § 36-9-28. |
13 | (15) “Regular interest” shall mean interest at the assumed investment rate of return, |
14 | compounded annually, as may be prescribed from time to time by the retirement board. |
15 | (16) “Retirement allowance” shall mean annual payments for life made after retirement |
16 | under and in accordance with chapters 8 to 10 of this title. All allowances shall be paid in equal |
17 | monthly installments beginning as of the effective date thereof; provided, that a smaller pro rata |
18 | amount may be paid for part of a month where separation from service occurs during the month in |
19 | which the application was filed, and when the allowance ceases before the last day of the month. |
20 | (17) “Retirement board” or “board” shall mean the board provided in § 36-8-3 to |
21 | administer the retirement system. |
22 | (18) “Retirement system” shall mean the employees’ retirement system of the state of |
23 | Rhode Island as defined in § 36-8-2. |
24 | (19) “Service” shall mean service as an employee of the state of Rhode Island as described |
25 | in subdivision (9) of this section. |
26 | (20) “Social Security retirement age” shall mean a member’s full retirement age as |
27 | determined in accordance with the federal Old Age, Survivors and Disability Insurance Act, not to |
28 | exceed age sixty-seven (67). |
29 | (21) “Total service” shall mean prior service as defined above, plus service rendered as a |
30 | member on or after July 1, 1936. |
31 | SECTION 3. Section 45-21-2 of the General Laws in Chapter 45-21 entitled "Retirement |
32 | of Municipal Employees" is hereby amended to read as follows: |
33 | 45-21-2. Definitions. |
34 | The following words and phrases as used in this chapter have the following meanings |
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1 | unless a different meaning is plainly required by the context: |
2 | (1) “Accumulated contributions” means the sum of all amounts deducted from the |
3 | compensation of a member and credited to his or her individual account in the members’ |
4 | contribution reserve account. |
5 | (2) “Active member” means any employee of a participating municipality as defined in this |
6 | section for whom the retirement system is currently receiving regular contributions pursuant to §§ |
7 | 45-21-41, 45-21-41.1 or 45-21.2-14. |
8 | (3) “Actuarial reserve” means the present value of all payments to be made on account of |
9 | any annuity, retirement allowance, or benefit, computed upon the basis of mortality tables adopted |
10 | by the retirement board with regular interest. |
11 | (4) “Beneficiary” means any person in receipt of a retirement allowance, annuity, or other |
12 | benefit as provided by this chapter. |
13 | (5) For purposes of this chapter, “domestic partner” shall be defined as a person who, prior |
14 | to the decedent’s death, was in an exclusive, intimate and committed relationship with the decedent, |
15 | and who certifies by affidavit that their relationship met the following qualifications: |
16 | (i) Both partners were at least eighteen (18) years of age and were mentally competent to |
17 | contract; |
18 | (ii) Neither partner was married to anyone else; |
19 | (iii) Partners were not related by blood to a degree which would prohibit marriage in the |
20 | state of Rhode Island; |
21 | (iv) Partners resided together and had resided together for at least one year at the time of |
22 | death; and |
23 | (v) Partners were financially interdependent as evidenced by at least two (2) of the |
24 | following: |
25 | (A) Domestic partnership agreement or relationship contract; |
26 | (B) Joint mortgage or joint ownership of primary residence; |
27 | (C) Two (2) of: (I) Joint ownership of motor vehicle; (II) Joint checking account; (III) Joint |
28 | credit account; (IV) Joint lease; and/or |
29 | (D) The domestic partner had been designated as a beneficiary for the decedent’s will, |
30 | retirement contract or life insurance. |
31 | (6) “Effective date of participation” means the date on which the provisions of this chapter |
32 | have become applicable to a municipality accepting the provisions of the chapter in the manner |
33 | stated in § 45-21-4. |
34 | (7) “Employee” means any regular and permanent employee or officer of any municipality, |
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1 | whose business time at a minimum of twenty (20) hours a week is devoted to the service of the |
2 | municipality, including elective officials and officials and employees of city and town housing |
3 | authorities. Notwithstanding the previous sentence, the term “employee,” for the purposes of this |
4 | chapter, does not include any person whose duties are of a casual or seasonal nature. The retirement |
5 | board shall decide who are employees within the meaning of this chapter, but in no case shall it |
6 | deem as an employee any individual who annually devotes less than twenty (20) business hours per |
7 | week to the service of the municipality and who receives less than the equivalent of minimum wage |
8 | compensation on an hourly basis for his or her services, except as provided in § 45-21-14.1. Casual |
9 | employees mean those persons hired for an occasional period or a period of emergency to perform |
10 | special jobs or functions not necessarily related to the work of regular employees. Any |
11 | commissioner of a municipal housing authority, or any member of a part-time state board |
12 | commission, committee or other authority is not deemed to be an employee within the meaning of |
13 | this chapter. |
14 | (8)(a) “Final compensation” for members who are eligible to retire on or prior to June 30, |
15 | 2012, means the average annual compensation, pay, or salary of a member for services rendered |
16 | during the period of three (3) consecutive years within the total service of the member when the |
17 | average was highest, and as the term average annual compensation is further defined in § 36-8- |
18 | 1(5)(a). For members eligible to retire on or after July 1, 2012, and who do retire prior to July 1, |
19 | 2024, “final compensation” means the average of the highest five (5) consecutive years of |
20 | compensation within the total service when the final compensation was the highest. For members |
21 | eligible to and who retire on or after July 1, 2024, "final compensation" means the average of the |
22 | highest three (3) consecutive years of compensation within the total service when the final |
23 | compensation was the highest. |
24 | (b) For members who become eligible to retire on or after July 1, 2012, if more than one |
25 | half (½) of the member’s total years of service consist of years of service during which the member |
26 | devoted less than thirty (30) business hours per week to the service of the municipality, but the |
27 | member’s average compensation consists of three (3) or more years during which the member |
28 | devoted more than thirty (30) business hours per week to the service of a municipality, such |
29 | member’s average compensation shall mean the average of the highest ten (10) consecutive years |
30 | of compensation within the total service when the average compensation was the highest; provided |
31 | however, effective July 1, 2015, if such member’s average compensation as defined in subsection |
32 | (a) above is equal to or less than thirty-five thousand dollars ($35,000), such amount to be indexed |
33 | annually in accordance with § 45-21-52(d)(1)(B), such member’s average compensation shall |
34 | mean the greater of: (i) The average of the highest ten (10) consecutive years of compensation |
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1 | within the total service when the average compensation was the highest; or (ii) The member’s |
2 | average compensation as defined in subsection (a) above. To protect a member’s accrued benefit |
3 | on June 30, 2012, under this subsection (8)(b), in no event shall a member’s average compensation |
4 | be lower than his or her average compensation determined as of June 30, 2012. |
5 | Notwithstanding the preceding provisions, in no event shall a member’s final compensation |
6 | be lower than his or her final compensation determined as of June 30, 2012. |
7 | (9) “Fiscal year” means the period beginning on July 1 in any year and ending on June 30 |
8 | of the next succeeding year. |
9 | (10) “Full actuarial costs” or “full actuarial value” mean the lump sum payable by a |
10 | member claiming service credit for certain employment for which payment is required, which is |
11 | determined according to the age of the member and his or her annual rate of compensation at the |
12 | time he or she applies for service credit, and which is expressed as a rate percent of the annual rate |
13 | of compensation to be multiplied by the number of years for which he or she claims the service |
14 | credit, as prescribed in a schedule adopted by the retirement board, from time to time, on the basis |
15 | of computation by the actuary. Except as provided in §§ 16-16-7.1, 36-5-3, 36-9-31, 36-10-10.4, |
16 | and 45-21-53: (i) All service credit purchases requested after June 16, 2009, and prior to July 1, |
17 | 2012, shall be at full actuarial value; and (ii) All service credit purchases requested after June 30, |
18 | 2012, shall be at full actuarial value which shall be determined using the system’s assumed |
19 | investment rate of return minus one percent (1%). |
20 | (11) “Governing body” means any and all bodies empowered to appropriate monies for, |
21 | and administer the operation of, the units as defined in subdivision (1) of this section. |
22 | (12) “Member” means any person included in the membership of the retirement system as |
23 | provided in § 45-21-8. |
24 | (13) “Municipality” means any town or city in the state of Rhode Island, any city or town |
25 | housing authority, fire, water, sewer district, regional school district, public building authority as |
26 | established by chapter 14 of title 37, or any other municipal financed agency to which the retirement |
27 | board has approved admission in the retirement system. |
28 | (14) “Participating municipality” means any municipality which has accepted this chapter, |
29 | as provided in § 45-21-4. |
30 | (15) “Prior service” means service as a member rendered before the effective date of |
31 | participation as defined in this section, certified on his or her prior service certificate, and allowable |
32 | as provided in § 45-21-15. |
33 | (16) “Regular interest” means interest at the assumed investment rate of return, |
34 | compounded annually, as may be prescribed from time to time by the retirement board. |
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1 | (17) “Retirement allowance” or “annuity” means the amounts paid to any member of the |
2 | municipal employees’ retirement system of the state of Rhode Island, or a survivor of the member, |
3 | as provided in this chapter. All retirement allowances or annuities shall be paid in equal monthly |
4 | installments for life, unless otherwise specifically provided. |
5 | (18) “Retirement board” or “board” means the state retirement board created by chapter 8 |
6 | of title 36. |
7 | (19) “Retirement system” means the “municipal employees’ retirement system of the state |
8 | of Rhode Island” as defined in § 45-21-32. |
9 | (20) “Service” means service as an employee of a municipality of the state of Rhode Island |
10 | as defined in subdivision (7). |
11 | (21) “Total service” means prior service as defined in subdivision (15) plus service |
12 | rendered as a member on or after the effective date of participation. |
13 | (22) Any term not specifically defined in this chapter and specifically defined in chapters |
14 | 8 through 10 of title 36 shall have the same definition as set forth in chapters 8 through 10 of title |
15 | 36. |
16 | SECTION 4. This act shall take effect upon passage. |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO EDUCATION -- TEACHERS' RETIREMENT -- PUBLIC OFFICERS AND | |
EMPLOYEES -- RETIREMENT SYSTEM | |
*** | |
1 | This act would reduce the number of years from five (5) to three (3), when calculating for |
2 | retirement purposes, the average of the highest consecutive years of compensation, for teachers, |
3 | and state and municipal employees. |
4 | This act would take effect upon passage. |
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