2026 -- S 2362

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LC004436

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2026

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A N   A C T

RELATING TO EDUCATION -- TEACHERS' RETIREMENT

     Introduced By: Senators Sosnowski, Ciccone, DiPalma, Murray, Gu, Valverde, and Gallo

     Date Introduced: January 30, 2026

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 16-16-26 and 16-16-40 of the General Laws in Chapter 16-16

entitled "Teachers’ Retirement [See Title 16 Chapter 97 — The Rhode Island Board of Education

Act]" are hereby amended to read as follows:

     16-16-26. Spouse’s, former spouse divorced, or domestic partner’s benefits.

     (a) Spouse’s, former spouse divorced, and domestic partner’s benefits are payable

following the decease of a member as provided in §§ 16-16-25 — 16-16-38.

     (b) The spouse, former spouse divorced, or domestic partner shall be entitled to benefits

upon attaining the age of sixty (60) years.

     (c) The spouse, former spouse divorced, or domestic partner was living with the deceased

member at the time of the member’s death. A spouse, former spouse divorced, or domestic partner

is deemed to have been living with the deceased member if they were both members of the same

household on the date of the deceased member’s death, or the spouse, former spouse divorced, or

domestic partner was receiving contributions from the deceased member toward support on that

date, or the deceased member had been ordered by a court to contribute to the spouse’s, former

spouse divorced, or domestic partner’s support.

     (d) Remarriage of the spouse, former spouse divorced, or domestic partner or establishment

of a domestic partnership shall render the person ineligible to receive current or future benefits

under this section.

     (e) The spouse or domestic partner of a member, as defined in this section, shall be entitled

to monthly benefits payable in accordance with the following table:

       Spouse's or Domestic

     Highest Annual Partner's Monthly

     Salary Minimum Benefit

     $17,000 or less $825 $1,025

     $17,001 to $25,000 $963 $1,200

     $25,001 to $33,000 $1,100 $1,375

     $33,001 to $40,000 $1,238 $1,550

     $40,001 and over $1,375 $1,725

     (f) The former spouse divorced shall be entitled to monthly benefits, payable in accordance

with the table provided in subsection (e) of this section, only if there are no dependent children,

parents, or other spouse or domestic partner entitled to benefits.

     (g) A yearly adjustment of the base benefit, and a yearly cost-of-living adjustment for

spouse’s, former spouse divorced, or domestic partner’s benefits shall be based on the annual social

security adjustment.

     16-16-40. Additional benefits payable to retired teachers.

     (a) All teachers and all beneficiaries of teachers receiving any service retirement or

ordinary or accidental disability retirement allowance pursuant to the provisions of this chapter and

chapter 17 of this title, on or before December 31, 1967, shall receive a cost of living retirement

adjustment equal to one and one-half percent (1.5%) per year of the original retirement allowance,

not compounded, for each year the retirement allowance has been in effect. For purposes of

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

retirement allowance. This cost of living retirement adjustment shall be added to the amount of the

service retirement allowance as of January 1, 1970, and payment shall begin as of July 1, 1970. An

additional cost of living retirement adjustment shall be added to the original retirement allowance

equal to three percent (3%) of the original retirement allowance on the first day of January, 1971,

and each year thereafter through December 31, 1980.

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

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

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

a cost of living adjustment, in addition to their retirement allowance, an amount equal to three

percent (3%) of the original retirement allowance. In each succeeding year thereafter, on the first

day of January, the retirement allowance shall be increased an additional three percent (3%) of the

original retirement allowance, not compounded, to be continued through December 31, 1980.

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

any service retirement and all teachers and all beneficiaries of teachers who have completed at least

ten (10) years of contributory service on or before July 1, 2005, pursuant to the provisions of this

chapter, and for all teachers and beneficiaries of teachers who receive a disability retirement

allowance pursuant to §§ 16-16-14 — 16-16-17, the cost of living adjustment shall be computed

and paid at the rate of three percent (3%) of the original retirement allowance or the retirement

allowance as computed in accordance with § 16-16-40.1, compounded annually from the year for

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

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

to teachers who retire before October 1, 2009, or are eligible to retire as of September 30, 2009.

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

retroactive payment shall be made.

     (3) The retirement allowance of all teachers and all beneficiaries of teachers who have not

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

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

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

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

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

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

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

the year for which the cost of living adjustment was determined payable by the retirement board;

provided, that no adjustment shall cause any retirement allowance to be decreased from the

retirement allowance provided immediately before such adjustment.

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

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

adjustment described in subsection (c)(3) of this section shall only apply to the first thirty-five

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

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

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

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

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

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

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

the Consumer Price Index for All Urban Consumers (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

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

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

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

     (e) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section.

     (f) This subsection (f) shall be effective for the period July 1, 2012, through June 30, 2015.

     (1) Notwithstanding the prior paragraphs of this section, and subject to subsection (f)(2)

below, for all present and former teachers, active and retired teachers, and beneficiaries receiving

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

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

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

“subtrahend”) from the Five-Year Average Investment Return of the retirement system determined

as of the last day of the plan year preceding the calendar year in which the adjustment is granted,

said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B)

is equal to the lesser of the teacher’s retirement allowance or the first twenty-five thousand dollars

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

indexed annually in the same percentage as determined under (f)(1)(A) above. The “Five-Year

Average Investment Return” shall mean the average of the investment returns of the most recent

five (5) plan years as determined by the retirement board. Subject to subsection (f)(2) below, the

benefit adjustment provided by this subsection (f)(1) shall commence upon the third (3rd)

anniversary of the date of retirement or the date on which the retiree reaches their Social Security

retirement age, whichever is later. In the event the retirement board adjusts the actuarially assumed

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

upward or downward in the same amount.

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

any plan year shall be suspended in their entirety unless the funded ratio of the employees’

retirement system of Rhode Island, the judicial retirement benefits trust, and the state police

retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty

percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan

year.

     In determining whether a funding level under this subsection (f)(2) has been achieved, the

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

current or future benefit adjustment provided under this section.

     (3) Notwithstanding subsection (f)(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

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

above until the funded ratio of the employees’ retirement system of Rhode Island, the judicial

retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s

actuary on an aggregate basis, exceeds eighty percent (80%).

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

(f) shall become effective July 1, 2012, and shall apply to any benefit adjustments not granted on

or prior to June 30, 2012.

     (g) This subsection (g) shall become effective July 1, 2015.

     (1)(A) As soon as administratively reasonable following the enactment into law of this

subsection (g)(1)(A), a one-time benefit adjustment shall be provided to teachers and/or

beneficiaries of teachers who retired on or before June 30, 2012, in the amount of two percent (2%)

of the lesser of either the teacher’s retirement allowance or the first twenty-five thousand dollars

($25,000) of the teacher’s retirement allowance. This one-time benefit adjustment shall be provided

without regard to the retiree’s age or number of years since retirement.

     (B) Notwithstanding the prior subsections of this section, for all present and former

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

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

this section for adjustments on and after January 1, 2016, and subject to subsection (g)(2) below,

shall be equal to (I) multiplied by (II):

     (I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where:

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

(the “subtrahend”) from the five-year average investment return of the retirement system

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

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

(0%). The “five-year average investment return” shall mean the average of the investment returns

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

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

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

     (ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer

Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor

Statistics determined as of September 30 of the prior calendar year.

     In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less

than (0%) percent.

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     (II) is equal to the lesser of either the teacher’s retirement allowance or the first twenty-

five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount

to be indexed annually in the same percentage as determined under subsection (g)(1)(B)(I) above.

     The benefit adjustments provided by this subsection (g)(1)(B) shall be provided to all

retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect,

and for all other retirees the benefit adjustments shall commence upon the third anniversary of the

date of retirement or the date on which the retiree reaches his or her Social Security retirement age,

whichever is later.

     (2) Except for teachers and/or beneficiaries of teachers who retired on or before June 30,

2012, the benefit adjustments under subsection (g)(1)(B) for any plan year shall be reduced to

twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’

retirement system of Rhode Island, the judicial retirement benefits trust, and the state police

retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty

percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan

year. Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode Island,

the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the

system’s actuary on an aggregate basis, of exceeding eighty percent (80%) for the benefit

adjustment to be reinstated for all teachers for such plan year shall be replaced with seventy-five

percent (75%). For plan year 2026, eligible retirees who retired after July 1, 2012, shall receive a

one-time full COLA of three and thirty-four one hundredths percent (3.34%).

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

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

current or future benefit adjustment provided under this section.

     (3) Effective for teachers and/or beneficiaries of teachers who retired after June 30, 2012,

or on or before June 30, 2015, the dollar amount in subsection (g)(1)(B)(II) of twenty-five thousand

eight hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and

twenty-six dollars ($31,026) until the funded ratio of the employees’ retirement system of Rhode

Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated

by the system’s actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1,

2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement

benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on

an aggregate basis, of exceeding eighty percent (80%) shall be replaced with seventy-five percent

(75%).

     (4) Effective for teachers and/or beneficiaries of teachers who have retired on or before

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July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60)

days following the enactment of the legislation implementing this provision, and a second one-time

stipend of five hundred dollars ($500) in the same month of the following year. These stipends

shall be payable to all retired teachers or beneficiaries receiving a benefit as of the applicable

payment date and shall not be considered cost of living adjustments under the prior provisions of

this section.

     SECTION 2. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement

System — Contributions and Benefits" is hereby amended to read as follows:

     36-10-35. Additional benefits payable to retired employees.

     (a) All state employees and all beneficiaries of state employees receiving any service

retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of

this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal

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

for each calendar year the retirement allowance has been in effect. For the purposes of computation,

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

allowance. This cost of living adjustment shall be added to the amount of the retirement allowance

as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the

original retirement allowance in each succeeding year during the month of January, and provided

further, that this additional cost of living increase shall be three percent (3%) for the year beginning

January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the

above provisions, no employee receiving any service retirement allowance pursuant to the

provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive

any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over

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

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

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

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

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

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

retirement allowance. In each succeeding year thereafter through December 31, 1980, during the

month of January, the retirement allowance shall be increased an additional three percent (3%) of

the original retirement allowance, not compounded, to be continued during the lifetime of the

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

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

employees, who have completed at least ten (10) years of contributory service on or before July 1,

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

of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36-

10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of

the original retirement allowance or the retirement allowance as computed in accordance with §

36-10-35.1, compounded annually from the year for which the cost of living adjustment was

determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b)

of this section. Such cost of living adjustments are available to members who retire before October

1, 2009, or are eligible to retire as of September 30, 2009.

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

retroactive payment shall be made.

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

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

were not eligible to retire as of September 30, 2009, shall, on the month following the third

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

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

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

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

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

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

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

from the retirement allowance provided immediately before such adjustment.

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

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

cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first

thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall

commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches

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

annually by the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-

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

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

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 United

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

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

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

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

apply.

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

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

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

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

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

increased an additional three percent (3%) of the original retirement allowance, compounded

annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of

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

service retirement allowance.

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

     (g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015.

     (1) Notwithstanding the prior paragraphs of this section, and subject to subsection (g)(2)

below, for all present and former employees, active and retired members, and beneficiaries

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

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

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

(the “subtrahend”) from the Five-Year Average Investment Return of the retirement system

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

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

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

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

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

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

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

below, the benefit adjustment provided by this subsection (g)(1) shall commence upon the third

(3rd) anniversary of the date of retirement or the date on which the retiree reaches their Social

Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially

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

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either upward or downward in the same amount.

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

any plan year shall be suspended in their entirety unless the funded ratio of the employees’

retirement system of Rhode Island, the judicial retirement benefits trust, and the state police

retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty

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

plan year.

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

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

current or future benefit adjustment provided under this section.

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

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

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

above until the funded ratio of the employees’ retirement system of Rhode Island, the judicial

retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s

actuary on an aggregate basis, exceeds eighty percent (80%).

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

(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or

prior to June 30, 2012.

     (h) This subsection (h) shall become effective July 1, 2015.

     (1)(A) As soon as administratively reasonable following the enactment into law of this

subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or

beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent

(2%) of the lesser of either the member’s retirement allowance or the first twenty-five thousand

dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be

provided without regard to the retiree’s age or number of years since retirement.

     (B) Notwithstanding the prior subsections of this section, for all present and former

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

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

under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2)

below, shall be equal to (I) multiplied by (II):

     (I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where:

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

(the “subtrahend”) from the five-year average investment return of the retirement system

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

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

(0%). The “five-year average investment return” shall mean the average of the investment returns

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

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

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

     (ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer

Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor

Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i)

plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%).

     (II) is equal to the lesser of either the member’s retirement allowance or the first twenty-

five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount

to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above.

     The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all

retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect,

and for all other retirees the benefit adjustments shall commence upon the third anniversary of the

date of retirement or the date on which the retiree reaches their Social Security retirement age,

whichever is later.

     (2) Except for members and/or beneficiaries of members who retired on or before June 30,

2012, the benefit adjustments under subsection (h)(1)(B) for any plan year shall be reduced to

twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’

retirement system of Rhode Island, the judicial retirement benefits trust, and the state police

retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty

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

plan year. Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode

Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated

by the system’s actuary on an aggregate basis, of exceeding eighty percent (80%) for the benefit

adjustment to be reinstated for all members for such plan year shall be replaced with seventy-five

percent (75%). For plan year 2026, eligible retirees who retired after July 1, 2012, shall receive a

one-time full COLA of three and thirty-four one hundredths percent (3.34%).

     In determining whether a funding level under this subsection (h)(2) has been achieved, the

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

current or future benefit adjustment provided under this section.

     (3) Effective for members and/or beneficiaries of members who retired after June 30, 2012,

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or on or before June 30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand

eight hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and

twenty-six dollars ($31,026) until the funded ratio of the employees’ retirement system of Rhode

Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated

by the system’s actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1,

2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement

benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on

an aggregate basis, of exceeding eighty percent (80%) shall be replaced with seventy-five percent

(75%).

     (i) Effective for members and/or beneficiaries of members who have retired on or before

July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60)

days following the enactment of the legislation implementing this provision, and a second one-time

stipend of five hundred dollars ($500) in the same month of the following year. These stipends

shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable

payment date and shall not be considered cost of living adjustments under the prior provisions of

this section.

     SECTION 3. Section 44-30-12 of the General Laws in Chapter 44-30 entitled "Personal

Income Tax" is hereby amended to read as follows:

     44-30-12. Rhode Island income of a resident individual.

     (a) General. The Rhode Island income of a resident individual means the individual’s

adjusted gross income for federal income tax purposes, with the modifications specified in this

section.

     (b) Modifications increasing federal adjusted gross income. There shall be added to

federal adjusted gross income:

     (1) Interest income on obligations of any state, or its political subdivisions, other than

Rhode Island or its political subdivisions;

     (2) Interest or dividend income on obligations or securities of any authority, commission,

or instrumentality of the United States, but not of Rhode Island or its political subdivisions, to the

extent exempted by the laws of the United States from federal income tax but not from state income

taxes;

     (3) The modification described in § 44-30-25(g);

     (4)(i) The amount defined below of a nonqualified withdrawal made from an account in

the tuition savings program pursuant to § 16-57-6.1. For purposes of this section, a nonqualified

withdrawal is:

LC004436 - Page 12 of 25

     (A) A transfer or rollover to a qualified tuition program under Section 529 of the Internal

Revenue Code, 26 U.S.C. § 529, other than to the tuition savings program referred to in § 16-57-

6.1; and

     (B) A withdrawal or distribution that is:

     (I) Not applied on a timely basis to pay “qualified higher education expenses” as defined

in § 16-57-3(12) of the beneficiary of the account from which the withdrawal is made;

     (II) Not made for a reason referred to in § 16-57-6.1(e); or

     (III) Not made in other circumstances for which an exclusion from tax made applicable by

Section 529 of the Internal Revenue Code, 26 U.S.C. § 529, pertains if the transfer, rollover,

withdrawal, or distribution is made within two (2) taxable years following the taxable year for

which a contributions modification pursuant to subsection (c)(4) of this section is taken based on

contributions to any tuition savings program account by the person who is the participant of the

account at the time of the contribution, whether or not the person is the participant of the account

at the time of the transfer, rollover, withdrawal, or distribution;

     (ii) In the event of a nonqualified withdrawal under subsection (b)(4)(i)(A) or (b)(4)(i)(B)

of this section, there shall be added to the federal adjusted gross income of that person for the

taxable year of the withdrawal an amount equal to the lesser of:

     (A) The amount equal to the nonqualified withdrawal reduced by the sum of any

administrative fee or penalty imposed under the tuition savings program in connection with the

nonqualified withdrawal plus the earnings portion thereof, if any, includible in computing the

person’s federal adjusted gross income for the taxable year; and

     (B) The amount of the person’s contribution modification pursuant to subsection (c)(4) of

this section for the person’s taxable year of the withdrawal and the two (2) prior taxable years less

the amount of any nonqualified withdrawal for the two (2) prior taxable years included in

computing the person’s Rhode Island income by application of this subsection for those years. Any

amount added to federal adjusted gross income pursuant to this subdivision shall constitute Rhode

Island income for residents, nonresidents, and part-year residents;

     (5) The modification described in § 44-30-25.1(d)(3)(i);

     (6) The amount equal to any unemployment compensation received but not included in

federal adjusted gross income;

     (7) The amount equal to the deduction allowed for sales tax paid for a purchase of a

qualified motor vehicle as defined by the Internal Revenue Code § 164(a)(6);

     (8) For any taxable year beginning on or after January 1, 2020, the amount of any Paycheck

Protection Program loan forgiven for federal income tax purposes as authorized by the Coronavirus

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Aid, Relief, and Economic Security Act and/or the Consolidated Appropriations Act, 2021 and/or

any other subsequent federal stimulus relief packages enacted by law, to the extent that the amount

of the loan forgiven exceeds $250,000, including an individual’s distributive share of the amount

of a pass-through entity’s loan forgiveness in excess of $250,000; and

     (9) For the taxable year beginning on or before January 1, 2025, the amount of any income,

deduction or allowance that would be subject to federal income tax but for the Congressional

enactment of the One Big Beautiful Bill Act or any other similar Congressional enactment. The

enactment of the One Big Beautiful Bill Act or any other similar Congressional enactment and any

Internal Revenue Service changes to forms, regulations, and/or processing which go into effect

during the current tax year or within six (6) months of the beginning of the next tax year shall be

deemed grounds for the promulgation of emergency rules and regulations under § 42-35-2.10 to

effectuate the purpose of preserving the Rhode Island tax base under Rhode Island law with respect

to the One Big Beautiful Bill Act or any other similar Congressional enactment.

     (c) Modifications reducing federal adjusted gross income. There shall be subtracted

from federal adjusted gross income:

     (1) Any interest income on obligations of the United States and its possessions to the extent

includible in gross income for federal income tax purposes, and any interest or dividend income on

obligations, or securities of any authority, commission, or instrumentality of the United States to

the extent includible in gross income for federal income tax purposes but exempt from state income

taxes under the laws of the United States; provided, that the amount to be subtracted shall in any

case be reduced by any interest on indebtedness incurred or continued to purchase or carry

obligations or securities the income of which is exempt from Rhode Island personal income tax, to

the extent the interest has been deducted in determining federal adjusted gross income or taxable

income;

     (2) A modification described in § 44-30-25(f) or § 44-30-1.1(c)(1);

     (3) The amount of any withdrawal or distribution from the “tuition savings program”

referred to in § 16-57-6.1 that is included in federal adjusted gross income, other than a withdrawal

or distribution or portion of a withdrawal or distribution that is a nonqualified withdrawal;

     (4) Contributions made to an account under the tuition savings program, including the

“contributions carryover” pursuant to subsection (c)(4)(iv) of this section, if any, subject to the

following limitations, restrictions, and qualifications:

     (i) The aggregate subtraction pursuant to this subdivision for any taxable year of the

taxpayer shall not exceed five hundred dollars ($500) or one thousand dollars ($1,000) if a joint

return;

LC004436 - Page 14 of 25

     (ii) The following shall not be considered contributions:

     (A) Contributions made by any person to an account who is not a participant of the account

at the time the contribution is made;

     (B) Transfers or rollovers to an account from any other tuition savings program account or

from any other “qualified tuition program” under section 529 of the Internal Revenue Code, 26

U.S.C. § 529; or

     (C) A change of the beneficiary of the account;

     (iii) The subtraction pursuant to this subdivision shall not reduce the taxpayer’s federal

adjusted gross income to less than zero (0);

     (iv) The contributions carryover to a taxable year for purpose of this subdivision is the

excess, if any, of the total amount of contributions actually made by the taxpayer to the tuition

savings program for all preceding taxable years for which this subsection is effective over the sum

of:

     (A) The total of the subtractions under this subdivision allowable to the taxpayer for all

such preceding taxable years; and

     (B) That part of any remaining contribution carryover at the end of the taxable year which

exceeds the amount of any nonqualified withdrawals during the year and the prior two (2) taxable

years not included in the addition provided for in this subdivision for those years. Any such part

shall be disregarded in computing the contributions carryover for any subsequent taxable year;

     (v) For any taxable year for which a contributions carryover is applicable, the taxpayer

shall include a computation of the carryover with the taxpayer’s Rhode Island personal income tax

return for that year, and if for any taxable year on which the carryover is based the taxpayer filed a

joint Rhode Island personal income tax return but filed a return on a basis other than jointly for a

subsequent taxable year, the computation shall reflect how the carryover is being allocated between

the prior joint filers;

     (5) The modification described in § 44-30-25.1(d)(1);

     (6) Amounts deemed taxable income to the taxpayer due to payment or provision of

insurance benefits to a dependent, including a domestic partner pursuant to chapter 12 of title 36 or

other coverage plan;

     (7) Modification for organ transplantation.

     (i) An individual may subtract up to ten thousand dollars ($10,000) from federal adjusted

gross income if the individual, while living, donates one or more of their human organs to another

human being for human organ transplantation, except that for purposes of this subsection, “human

organ” means all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow. A subtract

LC004436 - Page 15 of 25

modification that is claimed hereunder may be claimed in the taxable year in which the human

organ transplantation occurs.

     (ii) An individual may claim that subtract modification hereunder only once, and the

subtract modification may be claimed for only the following unreimbursed expenses that are

incurred by the claimant and related to the claimant’s organ donation:

     (A) Travel expenses.

     (B) Lodging expenses.

     (C) Lost wages.

     (iii) The subtract modification hereunder may not be claimed by a part-time resident or a

nonresident of this state;

     (8) Modification for taxable Social Security income.

     (i) For tax years beginning on or after January 1, 2016:

     (A) For a person who has attained the age used for calculating full or unreduced Social

Security retirement benefits who files a return as an unmarried individual, head of household, or

married filing separate whose federal adjusted gross income for the taxable year is less than eighty

thousand dollars ($80,000); or

     (B) A married individual filing jointly or individual filing qualifying widow(er) who has

attained the age used for calculating full or unreduced Social Security retirement benefits whose

joint federal adjusted gross income for the taxable year is less than one hundred thousand dollars

($100,000), an amount equal to the Social Security benefits includible in federal adjusted gross

income.

     (ii) Adjustment for inflation. The dollar amount contained in subsections (c)(8)(i)(A) and

(c)(8)(i)(B) of this section shall be increased annually by an amount equal to:

     (A) Such dollar amount contained in subsections (c)(8)(i)(A) and (c)(8)(i)(B) of this section

adjusted for inflation using a base tax year of 2000, multiplied by;

     (B) The cost-of-living adjustment with a base year of 2000.

     (iii) For the purposes of this section the cost-of-living adjustment for any calendar year is

the percentage (if any) by which the consumer price index for the preceding calendar year exceeds

the consumer price index for the base year. The consumer price index for any calendar year is the

average of the consumer price index as of the close of the twelve-month (12) period ending on

August 31, of such calendar year.

     (iv) For the purpose of this section the term “consumer price index” means the last

consumer price index for all urban consumers published by the department of labor. For the purpose

of this section the revision of the consumer price index which is most consistent with the consumer

LC004436 - Page 16 of 25

price index for calendar year 1986 shall be used.

     (v) If any increase determined under this section is not a multiple of fifty dollars ($50.00),

such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a

married individual filing separate return, if any increase determined under this section is not a

multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple

of twenty-five dollars ($25.00);

     (9) Modification of taxable retirement income from certain pension plans or

annuities.

     (i) For tax years beginning on or after January 1, 2017, until the tax year beginning January

1, 2022, a modification shall be allowed for up to fifteen thousand dollars ($15,000), and for tax

years beginning on or after January 1, 2023, until the tax year beginning January 1, 2024, a

modification shall be allowed for up to twenty thousand dollars ($20,000), and for tax years

beginning on or after January 1, 2025, a modification shall be allowed for up to fifty thousand

dollars ($50,000), of taxable pension and/or annuity income that is included in federal adjusted

gross income for the taxable year:

     (A) For a person who has attained the age used for calculating full or unreduced Social

Security retirement benefits who files a return as an unmarried individual, head of household, or

married filing separate whose federal adjusted gross income for such taxable year is less than the

amount used for the modification contained in subsection (c)(8)(i)(A) of this section an amount not

to exceed $15,000 for tax years beginning on or after January 1, 2017, until the tax year beginning

January 1, 2022, and an amount not to exceed twenty thousand dollars ($20,000) for tax years

beginning on or after January 1, 2023, until the tax year beginning January 1, 2024, and an amount

not to exceed fifty thousand dollars ($50,000) for tax years beginning on or after January 1, 2025,

of taxable pension and/or annuity income includible in federal adjusted gross income; or

     (B) For a married individual filing jointly or individual filing qualifying widow(er) who

has attained the age used for calculating full or unreduced Social Security retirement benefits whose

joint federal adjusted gross income for such taxable year is less than the amount used for the

modification contained in subsection (c)(8)(i)(B) of this section an amount not to exceed $15,000

for tax years beginning on or after January 1, 2017, until the tax year beginning January 1, 2022,

and an amount not to exceed twenty thousand dollars ($20,000) for tax years beginning on or after

January 1, 2023, until the tax year beginning January 1, 2024, and an amount not to exceed fifty

thousand dollars ($50,000) for tax years beginning on or after January 1, 2025, of taxable pension

and/or annuity income includible in federal adjusted gross income.

     (ii) Adjustment for inflation. The dollar amount contained by reference in subsections

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(c)(9)(i)(A) and (c)(9)(i)(B) of this section shall be increased annually for tax years beginning on

or after January 1, 2018, by an amount equal to:

     (A) Such dollar amount contained by reference in subsections (c)(9)(i)(A) and (c)(9)(i)(B)

of this section adjusted for inflation using a base tax year of 2000, multiplied by;

     (B) The cost-of-living adjustment with a base year of 2000.

     (iii) For the purposes of this section, the cost-of-living adjustment for any calendar year is

the percentage (if any) by which the consumer price index for the preceding calendar year exceeds

the consumer price index for the base year. The consumer price index for any calendar year is the

average of the consumer price index as of the close of the twelve-month (12) period ending on

August 31, of such calendar year.

     (iv) For the purpose of this section, the term “consumer price index” means the last

consumer price index for all urban consumers published by the department of labor. For the purpose

of this section, the revision of the consumer price index which is most consistent with the consumer

price index for calendar year 1986 shall be used.

     (v) If any increase determined under this section is not a multiple of fifty dollars ($50.00),

such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a

married individual filing a separate return, if any increase determined under this section is not a

multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple

of twenty-five dollars ($25.00).

     (vi) For tax years beginning on or after January 1, 2022, the dollar amount contained by

reference in subsection (c)(9)(i)(A) shall be adjusted to equal the dollar amount contained in

subsection (c)(8)(i)(A), as adjusted for inflation, and the dollar amount contained by reference in

subsection(c)(9)(i)(B) shall be adjusted to equal the dollar amount contained in subsection

(c)(8)(i)(B), as adjusted for inflation;

     (10) Modification for Rhode Island investment in opportunity zones. For purposes of

a taxpayer’s state tax liability, in the case of any investment in a Rhode Island opportunity zone by

the taxpayer for at least seven (7) years, a modification to income shall be allowed for the

incremental difference between the benefit allowed under 26 U.S.C. § 1400Z-2(b)(2)(B)(iv) and

the federal benefit allowed under 26 U.S.C. § 1400Z-2(c);

     (11) Modification for military service pensions.

     (i) For purposes of a taxpayer’s state tax liability, a modification to income shall be allowed

as follows:

     (A) For the tax years beginning on January 1, 2023, a taxpayer may subtract from federal

adjusted gross income the taxpayer’s military service pension benefits included in federal adjusted

LC004436 - Page 18 of 25

gross income;

     (ii) As used in this subsection, the term “military service” shall have the same meaning as

set forth in 20 C.F.R. § 212.2;

     (iii) At no time shall the modification allowed under this subsection alone or in conjunction

with subsection (c)(9) exceed the amount of the military service pension received in the tax year

for which the modification is claimed;

     (12) Any rebate issued to the taxpayer pursuant to § 44-30-103 to the extent included in

gross income for federal tax purposes; and

     (13) For tax years beginning on or after January 1, 2025, in the case of a taxpayer that is

licensed in accordance with chapters 28.6 and/or 28.11 of title 21, the amount equal to any

expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed under

26 U.S.C. § 280E.; and

     (14) The amount received from public pension benefits administered by the Employees

Retirement System of Rhode Island.

     (d) Modification for Rhode Island fiduciary adjustment. There shall be added to, or

subtracted from, federal adjusted gross income (as the case may be) the taxpayer’s share, as

beneficiary of an estate or trust, of the Rhode Island fiduciary adjustment determined under § 44-

30-17.

     (e) Partners. The amounts of modifications required to be made under this section by a

partner, which relate to items of income or deduction of a partnership, shall be determined under §

44-30-15.

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

of Municipal Employees" is hereby amended to read as follows:

     45-21-52. Automatic increase in service retirement allowance.

     (a) The local legislative bodies of the cities and towns may extend to their respective

employees automatic adjustment increases in their service retirement allowances, by a resolution

accepting any of the plans described in this section:

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

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

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

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

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

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

provision, and an additional one and one-half percent (1.5%) is added to the original retirement

LC004436 - Page 19 of 25

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

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

the plan is accepted and each succeeding year.

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

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

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

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

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

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

of January.

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

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

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

(3%) of the original retirement allowance.

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

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

     (c) This subsection (c) shall be effective for the period July 1, 2012, through June 30, 2015.

     (1) Notwithstanding any other subsections of this section, and subject to subsection (c)(2)

below, for all present and former employees, active and retired members, and beneficiaries

receiving any retirement, disability or death allowance or benefit of any kind by reason of adoption

of this section by their employer, the annual benefit adjustment provided in any calendar year under

this section shall be equal to (A) multiplied by (B) where (A) is equal to the percentage determined

by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the Five-Year Average

Investment Return of the retirement system determined as of the last day of the plan year preceding

the calendar year in which the adjustment is granted, said percentage not to exceed four percent

(4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of the member’s

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

such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same percentage

as determined under (c)(1)(A) above. The “Five-Year Average Investment Return” shall mean the

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

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

subsection (c)(1) shall commence upon the third (3rd) anniversary of the date of retirement or the

date on which the retiree reaches their Social Security retirement age, whichever is later; or for

municipal police and fire retiring under the provisions of chapter 21.2 of this title, the benefit

LC004436 - Page 20 of 25

adjustment provided by this subsection (c)(1) shall commence on the later of the third (3rd)

anniversary of the date of retirement or the date on which the retiree reaches age fifty-five (55). In

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

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

amount.

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

section for any plan year shall be reduced to twenty-five percent (25%) of the benefit adjustment

for each municipal plan within the municipal employees’ retirement system unless the municipal

plan is determined to be funded at a Funded Ratio equal to or greater than eighty percent (80%) as

of the end of the immediately preceding plan year in accordance with the retirement system’s

actuarial valuation report as prepared by the system’s actuary, in which event the benefit adjustment

will be reinstated for all members for such plan year.

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

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

current or future benefit adjustment provided under this section.

     (3) Notwithstanding subsection (c)(2), for each municipal plan that has a Funded Ratio of

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

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

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

(c)(1) above until the municipal plan’s Funded Ratio exceeds eighty percent (80%).

     (d) This subsection (d) shall become effective July 1, 2015.

     (1)(A) As soon as administratively reasonable following the enactment into law of this

subsection (d)(1)(A), a one-time benefit adjustment shall be provided to members and/or

beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent

(2%) of the lesser of either the employee’s retirement allowance or the first twenty-five thousand

dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be

provided without regard to the retiree’s age or number of years since retirement.

     (B) Notwithstanding the prior subsections of this section, for all present and former

employees, active and retired employees, and beneficiaries receiving any retirement, disability or

death allowance or benefit of any kind by reason of adoption of this section by their employer, the

annual benefit adjustment provided in any calendar year under this section for adjustments on and

after January 1, 2016, and subject to subsection (d)(2) below, shall be equal to (I) multiplied by

(II):

     (I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where:

LC004436 - Page 21 of 25

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

(the “subtrahend”) from the five-year average investment return of the retirement system

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

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

(0%). The “five-year average investment return” shall mean the average of the investment returns

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

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

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

     (ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer

Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor

Statistics determined as of September 30 of the prior calendar year.

     In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less

than zero percent (0%).

     (II) is equal to the lesser of either the member’s retirement allowance or the first twenty-

five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount

to be indexed annually in the same percentage as determined under (d)(1)(B)(I) above.

     The benefit adjustments provided by this subsection (d)(1)(B) shall be provided to all

retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect,

and for all other retirees the benefit adjustments shall commence upon the third anniversary of the

date of retirement or the date on which the retiree reaches their Social Security retirement age,

whichever is later; or for municipal police and fire retiring under the provisions of § 45-21.2-

5(b)(1)(A), the benefit adjustment provided by this subsection (d)(1)(B) shall commence on the

later of the third anniversary of the date of retirement or the date on which the retiree reaches age

fifty-five (55); or for municipal police and fire retiring under the provisions of § 45-21.2-5(b)(1)(B),

the benefit adjustment provided by this subsection (d)(1)(B) shall commence on the later of the

third anniversary of the date of retirement or the date on which the retiree reaches age fifty (50).

     (2) Except for municipal employees and/or beneficiaries of municipal employees who

retired on or before June 30, 2012, the benefit adjustments under subsection (d)(1)(B) for any plan

year shall be reduced to twenty-five percent (25%) of the benefit adjustment for each municipal

plan within the municipal employees’ retirement system unless the municipal plan is determined to

be funded at a funded ratio equal to or greater than eighty percent (80%) as of the end of the

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

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

for all members for such plan year. Effective July 1, 2024, the funded ratio for each municipal plan

LC004436 - Page 22 of 25

within the municipal employees’ retirement system, calculated by the system’s actuary, of equal to

or greater than eighty percent (80%) for the benefit adjustment to be reinstated for all members for

such plan year shall be replaced with seventy-five percent (75%). For plan year 2026, eligible

retirees who retired after July 1, 2012, shall receive a one-time full COLA of three and thirty-four

one hundredths percent (3.34%).

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

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

current or future benefit adjustment provided under this section.

     (3) Effective for members and/or beneficiaries of members who retired after June 30, 2012,

or on or before June 30, 2015, the dollar amount in (d)(1)(B)(II) of twenty-five thousand eight

hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six

dollars ($31,026) until the municipal plan’s funded ratio exceeds eighty percent (80%). Effective

July 1, 2024, the funded ratio for each municipal plan within the municipal employees’ retirement

system, calculated by the system’s actuary, of exceeding eighty percent (80%) for the benefit

adjustment to be reinstated for all members for such plan year shall be replaced with seventy-five

percent (75%).

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

next succeeding the acceptance, contribute by means of salary deductions, pursuant to § 45-21-41,

one percent (1%) of the employee’s compensation concurrently with and in addition to

contributions otherwise being made to the retirement system.

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

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

     (g) The East Greenwich town council shall be allowed to accept Plan C of subsection (a)(3)

of this section for all employees of the town of East Greenwich who either, pursuant to contract

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

and who shall all collectively be referred to as the “Municipal-COLA Group” and shall be separate

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

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

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

on or after January 1, 2003.

     (h) Effective for members and/or beneficiaries of members who have retired on or before

July 1, 2015, and without regard to whether the retired member or beneficiary is receiving a benefit

adjustment under this section, a one-time stipend of five hundred dollars ($500) shall be payable

within sixty (60) days following the enactment of the legislation implementing this provision, and

LC004436 - Page 23 of 25

a second one-time stipend of five hundred dollars ($500) in the same month of the following year.

These stipends shall not be considered cost of living adjustments under the prior provisions of this

section.

     SECTION 5. 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

***

     This act would increase the monthly minimum benefit for a spouse, domestic partner or

former spouse and grant, to eligible retirees who retired after July 1, 2012, and provide a one-time

full COLA of three and thirty-four one hundredths percent (3.34%). This act would further provide

a modification reducing federal adjusted gross income for the amount received of public pension

benefits administered by the Employees Retirement System of Rhode Island.

     This act would take effect upon passage.

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LC004436

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LC004436 - Page 25 of 25