2024 -- S 2987 | |
======== | |
LC005940 | |
======== | |
STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2024 | |
____________ | |
A N A C T | |
RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM-- | |
CONTRIBUTIONS AND BENEFITS | |
| |
Introduced By: Senators Ciccone, F. Lombardi, Burke, Tikoian, Britto, LaMountain, and | |
Date Introduced: April 16, 2024 | |
Referred To: Senate Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement |
2 | System — Contributions and Benefits" is hereby amended to read as follows: |
3 | 36-10-35. Additional benefits payable to retired employees. [Effective January 1, |
4 | 2024.] |
5 | (a) All state employees and all beneficiaries of state employees receiving any service |
6 | retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of |
7 | this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal |
8 | to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, |
9 | for each calendar year the retirement allowance has been in effect. For the purposes of computation, |
10 | credit shall be given for a full calendar year regardless of the effective date of the retirement |
11 | allowance. This cost of living adjustment shall be added to the amount of the retirement allowance |
12 | as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the |
13 | original retirement allowance in each succeeding year during the month of January, and provided |
14 | further, that this additional cost of living increase shall be three percent (3%) for the year beginning |
15 | January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the |
16 | above provisions, no employee receiving any service retirement allowance pursuant to the |
17 | provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive |
18 | any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over |
| |
1 | the service retirement allowance where the employee retired prior to January 1, 1958. |
2 | (b) All state employees and all beneficiaries of state employees retired on or after January |
3 | 1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement |
4 | allowance pursuant to the provisions of this title shall, on the first day of January next following |
5 | the third anniversary date of the retirement, receive a cost of living retirement adjustment, in |
6 | addition to his or her retirement allowance, in an amount equal to three percent (3%) of the original |
7 | retirement allowance. In each succeeding year thereafter through December 31, 1980, during the |
8 | month of January, the retirement allowance shall be increased an additional three percent (3%) of |
9 | the original retirement allowance, not compounded, to be continued during the lifetime of the |
10 | employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar |
11 | year regardless of the effective date of the service retirement allowance. |
12 | (c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state |
13 | employees receiving any service retirement and all state employees, and all beneficiaries of state |
14 | employees, who have completed at least ten (10) years of contributory service on or before July 1, |
15 | 2005, pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries |
16 | of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36- |
17 | 10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of |
18 | the original retirement allowance or the retirement allowance as computed in accordance with § |
19 | 36-10-35.1, compounded annually from the year for which the cost of living adjustment was |
20 | determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) |
21 | of this section. Such cost of living adjustments are available to members who retire before October |
22 | 1, 2009, or are eligible to retire as of September 30, 2009. |
23 | (2) The provisions of this subsection shall be deemed to apply prospectively only and no |
24 | retroactive payment shall be made. |
25 | (3) The retirement allowance of all state employees and all beneficiaries of state employees |
26 | who have not completed at least ten (10) years of contributory service on or before July 1, 2005, or |
27 | were not eligible to retire as of September 30, 2009, shall, on the month following the third |
28 | anniversary date of retirement, and on the month following the anniversary date of each succeeding |
29 | year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or |
30 | the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as |
31 | published by the United States Department of Labor Statistics determined as of September 30 of |
32 | the prior calendar year, whichever is less; the cost of living adjustment shall be compounded |
33 | annually from the year for which the cost of living adjustment was determined payable by the |
34 | retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased |
| LC005940 - Page 2 of 7 |
1 | from the retirement allowance provided immediately before such adjustment. |
2 | (d) For state employees not eligible to retire in accordance with this chapter as of |
3 | September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the |
4 | cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first |
5 | thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall |
6 | commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches |
7 | age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase |
8 | annually by the percentage increase in the Consumer Price Index for all Urban Consumers (CPI- |
9 | U) as published by the United States Department of Labor Statistics determined as of September |
10 | 30 of the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand |
11 | dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of |
12 | increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United |
13 | States Department of Labor Statistics determined as of September 30 of the prior calendar year or |
14 | three percent (3%), whichever is less, on the month following the anniversary date of each |
15 | succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon |
16 | passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not |
17 | apply. |
18 | (e) All legislators and all beneficiaries of legislators who are receiving a retirement |
19 | allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall, |
20 | commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a |
21 | retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. |
22 | In each succeeding year thereafter during the month of January, the retirement allowance shall be |
23 | increased an additional three percent (3%) of the original retirement allowance, compounded |
24 | annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of |
25 | computation, credit shall be given for a full calendar year regardless of the effective date of the |
26 | service retirement allowance. |
27 | (f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section. |
28 | (g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015. |
29 | (1) Notwithstanding the prior paragraphs of this section, and subject to subsection (g)(2) |
30 | below, for all present and former employees, active and retired members, and beneficiaries |
31 | receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit |
32 | adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) |
33 | where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) |
34 | (the “subtrahend”) from the Five-Year Average Investment Return of the retirement system |
| LC005940 - Page 3 of 7 |
1 | determined as of the last day of the plan year preceding the calendar year in which the adjustment |
2 | is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent |
3 | (0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five |
4 | thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) |
5 | amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The |
6 | “Five-Year Average Investment Return” shall mean the average of the investment returns of the |
7 | most recent five (5) plan years as determined by the retirement board. Subject to subsection (g)(2) |
8 | below, the benefit adjustment provided by this subsection (g)(1) shall commence upon the third |
9 | (3rd) anniversary of the date of retirement or the date on which the retiree reaches his or her Social |
10 | Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially |
11 | assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted |
12 | either upward or downward in the same amount. |
13 | (2) Except as provided in subsection (g)(3), the benefit adjustments under this section for |
14 | any plan year shall be suspended in their entirety unless the Funded Ratio of the Employees’ |
15 | Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police |
16 | Retirement Benefits Trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty |
17 | percent (80%) in which event the benefit adjustment will be reinstated for all members for such |
18 | plan year. |
19 | In determining whether a funding level under this subsection (g)(2) has been achieved, the |
20 | actuary shall calculate the funding percentage after taking into account the reinstatement of any |
21 | current or future benefit adjustment provided under this section. |
22 | (3) Notwithstanding subsection (g)(2), in each fifth plan year commencing after June 30, |
23 | 2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five |
24 | plan years, a benefit adjustment shall be calculated and made in accordance with subsection (g)(1) |
25 | above until the Funded Ratio of the Employees’ Retirement System of Rhode Island, the Judicial |
26 | Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by the |
27 | system’s actuary on an aggregate basis, exceeds eighty percent (80%). |
28 | (4) Notwithstanding any other provision of this chapter, the provisions of this subsection |
29 | (g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or |
30 | prior to June 30, 2012. |
31 | (h) This subsection (h) shall become effective July 1, 2015. |
32 | (1)(A) As soon as administratively reasonable following the enactment into law of this |
33 | subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or |
34 | beneficiaries of members who retired on or before June 30, 2012, in the amount of 2% of the lesser |
| LC005940 - Page 4 of 7 |
1 | of either the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of |
2 | the member’s retirement allowance. This one-time benefit adjustment shall be provided without |
3 | regard to the retiree’s age or number of years since retirement. |
4 | (B) Notwithstanding the prior subsections of this section, for all present and former |
5 | employees, active and retired members, and beneficiaries receiving any retirement, disability or |
6 | death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year |
7 | under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2) |
8 | below, shall be equal to (I) multiplied by (II): |
9 | (I) Shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: |
10 | (i) Is equal to the percentage determined by subtracting five and one-half percent (5.5%) |
11 | (the “subtrahend”) from the five-year average investment return of the retirement system |
12 | determined as of the last day of the plan year preceding the calendar year in which the adjustment |
13 | is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent |
14 | (0%). The “five-year average investment return” shall mean the average of the investment returns |
15 | of the most recent five (5) plan years as determined by the retirement board. In the event the |
16 | retirement board adjusts the actuarially assumed rate of return for the system, either upward or |
17 | downward, the subtrahend shall be adjusted either upward or downward in the same amount. |
18 | (ii) Is equal to the lesser of three percent (3%) or the percentage increase in the Consumer |
19 | Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor |
20 | Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) |
21 | plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%). |
22 | (II) Is equal to the lesser of either the member’s retirement allowance or the first twenty- |
23 | five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount |
24 | to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above. |
25 | The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all |
26 | retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, |
27 | and for all other retirees the benefit adjustments shall commence upon the third anniversary of the |
28 | date of retirement or the date on which the retiree reaches his or her Social Security retirement age, |
29 | whichever is later. |
30 | (2) The benefit adjustments under subsection (h)(1)(B) for any plan year shall be reduced |
31 | to twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’ |
32 | retirement system of Rhode Island, the judicial retirement benefits trust and the state police |
33 | retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty |
34 | percent (80%) in which event the benefit adjustment will be reinstated for all members for such |
| LC005940 - Page 5 of 7 |
1 | plan year. |
2 | In determining whether a funding level under this subsection (h)(2) has been achieved, the |
3 | actuary shall calculate the funding percentage after taking into account the reinstatement of any |
4 | current or future benefit adjustment provided under this section. |
5 | (3) Effective for members and/or beneficiaries of members who retired on or before June |
6 | 30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand eight hundred and |
7 | fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six dollars |
8 | ($31,026) until the funded ratio of the employees’ retirement system of Rhode Island, the judicial |
9 | retirement benefits trust and the state police retirement benefits trust, calculated by the system’s |
10 | actuary on an aggregate basis, exceeds eighty percent (80%). |
11 | (i) Effective for members and/or beneficiaries of members who have retired on or before |
12 | July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) |
13 | days following the enactment of the legislation implementing this provision, and a second one-time |
14 | stipend of five hundred dollars ($500) in the same month of the following year. These stipends |
15 | shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable |
16 | payment date and shall not be considered cost of living adjustments under the prior provisions of |
17 | this section. |
18 | (j) Notwithstanding the prior subsections of this section, for all present and former |
19 | employees, active and retired members, and beneficiaries receiving any retirement, disability or |
20 | death allowance or benefit of any kind, shall receive an annual benefit adjustment equal to a two |
21 | thousand dollar ($2,000) increase per year for each calendar year. |
22 | (1) Notwithstanding any other provision of this chapter, the provisions of this subsection |
23 | shall become effective July 1, 2025, and shall apply to any benefit adjustment not granted on or |
24 | prior to June 30, 2025. |
25 | SECTION 2. This act shall take effect upon passage. |
======== | |
LC005940 | |
======== | |
| LC005940 - Page 6 of 7 |
EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM-- | |
CONTRIBUTIONS AND BENEFITS | |
*** | |
1 | This act would require effective July 1, 2025, that all present and former employees, active |
2 | and retired members, and beneficiaries receiving any retirement, disability or death allowance or |
3 | benefit of any kind, shall receive an annual benefit adjustment of two thousand dollars ($2,000) |
4 | each calendar year. |
5 | This act would take effect upon passage. |
======== | |
LC005940 | |
======== | |
| LC005940 - Page 7 of 7 |