CHAPTER 139

94-S 2524 am

Approved Jul. 6, 1994.

AN ACT RELATING TO PENSION REFORM -- CLOSING EXISTING LOOPHOLES IN THE PUBLIC EMPLOYEES RETIREMENT LAW

It is enacted by the General Assembly as follows:

SECTION 1. Section 36-10-9 of the General Laws in Chapter 36-10 entitled "Retirement on service allowance -- In general" is hereby amended to read as follows:

{ADD 36-10-9. Retirement on service allowance -- In general. [Effective January 1, 1993.] -- ADD} Retirement of a member on a service retirement allowance shall be made by the retirement board as follows:

(a) Any member may retire upon his or her written application to the retirement board as of the first day of the calendar month in which the application was filed; provided, the member was separated from service prior thereto; and further provided, however, that if separation from service occurs during the month in which application is filed, the effective date shall be the first day following that separation from service; and provided further that the member on his or her retirement date attained the age of sixty (60) and completed at least ten (10) years of total service or who, regardless of age, has completed twenty-eight (28) years of total service.

(b) Any faculty employee at a public institution of higher education under the jurisdiction of the board of governors for higher education shall not be involuntarily retired upon attaining the age of seventy (70) years.

(c) Except as specifically provided in section 36-10-9.1, sections 36-10-12 through 36-10-15 and sections 45-21-19 through 45-21-22 of the general laws, no member shall be eligible for pension benefits under this chapter unless the member shall have been a contributing member of the employee's retirement system for at least ten (10) years.

(i) Provided, however, a person who has ten (10) years service credit on or before June 16, 1991 shall be vested.

(ii) Furthermore, any past service credits purchased in accordance with section 36-9-38 shall be counted towards vesting.

(iii) Any person who becomes a member of the employees' retirement system pursuant to section 45-21-4 shall be considered a contributing member for the purpose of title 45, chapter 21 and this chapter.

{ADD (iv) Notwithstanding any other provision of law no more than five (5) years of service credit may be purchased by a member of the system. The five (5) year limit shall not apply to any purchases made prior to the effective date of this provision. A member who has purchased more than five (5) years of service credits before the effective date of this act shall be permitted to apply such purchases towards the member's service retirement. However, no further purchase will be permitted. Repayment, in accordance with applicable law and regulation, of any contribution previously withdrawn from the system shall not be deemed a purchase of service credit. ADD}

(d) No member of the employees' retirement system shall be permitted to purchase service credits for casual or seasonal employment, for employment as a page in the general assembly, or for employment at any state college or university while the employee is a student or graduate assistant of the college or university.

(e) Except as specifically provided in sections 16-16-6.2 and 16-16-6.4 of the general laws, a member shall not receive service credit in this retirement system for any year or portion thereof, which counts as service credit in any other retirement system in which the said member is vested or from which the said member is receiving a pension and/or any annual payment for life. This subsection shall not apply to any payments received pursuant to the Federal Social Security Act.

(f) A member who seeks to purchase or receive service credit in this retirement system shall have the affirmative duty to disclose to the retirement board whether or not he/she is a vested member in any other retirement system and/or is receiving a pension, retirement allowance, or any annual payment for life. The retirement board shall have the right to investigate as to whether or not the member has utilized the same time of service for credit in any other retirement system. The member has an affirmative duty to cooperate with the retirement board including, by way of illustration and not by way of limitations, the duty to furnish or have furnished to the retirement board any relevant information which is protected by any privacy act.

(g) A member who fails to cooperate with the retirement board shall not have the said time of service counted toward total service credit until such time as the member cooperates with the retirement board and until such time as the retirement board determines the validity of the service credit.

(h) A member who knowingly makes a false statement to the retirement board regarding service time or credit shall not be entitled to a retirement allowance and is entitled only to the return of his/her contributions without interest.

SECTION 2. Section 45-21-16 of the General Laws in Chapter 45-21 entitled "Retirement on Service Allowance" is hereby amended to read as follows:

{ADD 45-21-16. Retirement on service allowance. -- ADD} Retirement of a member on a service retirement allowance shall be made by the retirement board as follows:

(a) Any member may retire upon the member's written application to the retirement board as of the first day of the calendar month in which the application was filed, provided the member was separated from service prior thereto, and provided, further, that if separation from service occurs during the month in which application is filed, the effective date shall be the first day following the separation from service, provided that the member at the time so specified for the member's retirement shall have attained the applicable minimum retirement age and shall have completed at least ten (10) years of total service or who, regardless of age, completed thirty (30) years of total service, and notwithstanding that during the period of notification the member may have separated from service. The minimum ages for service retirement (except for employees completing thirty (30) years of service as above provided) shall be fifty-eight (58) years.

(b) Except as specifically provided in section 45-21-19 through 45-21-22, no member shall be eligible for pension benefits under this chapter unless the member shall have been a contributing member of the employees' retirement system for at least ten (10) years.

(i) Provided, however, a person who has ten (10) years service credit on or before June 16, 1991 shall be vested.

(ii) Furthermore, any past service credits purchased in accordance with section 45-21-62 shall be counted towards vesting.

(iii) Any person who becomes a member of the employees' retirement system pursuant to section 45-21-4 shall be considered a contributing member for the purpose of this chapter.

{ADD (iv) Notwithstanding any other provision of law, no more than five (5) years of service credit may be purchased by a member of the system. The five (5) year limit shall not apply to any purchases made prior to the effective date of this provision. A member who has purchased more than five (5) years of service credit maximum, before the effective date of this act, shall be permitted to apply such purchases towards the member's service retirement. However, no further purchase will be permitted. Repayment, in accordance with applicable law and regulation of any contribution previously withdrawn from the system shall not bedeemed a purchase of service credit. ADD}

(c) No member of the municipal employees' retirement system shall be permitted to purchase service credits for casual or seasonal employment, for employment as a page in the general assembly, or for employment at any state college or university while the employee is a student or graduate assistant of the college or university.

(d) A member shall not receive service credit in this retirement system for any year or portion thereof, which counts as service credit in any other retirement system in which the said member is vested or from which the said member is receiving a pension and/or any annual payment for life. This subsection shall not apply to any payments received pursuant to the Federal Social Security Act.

(e) A member who seeks to purchase or receive service credit in this retirement system shall have the affirmative duty to disclose to the retirement board whether or not he/she is a vested member in any other retirement system and/or is receiving a pension retirement allowance or any annual payment for life. The retirement board shall have the right to investigate as to whether or not the member has utilized the same time of service for credit in any other retirement system. The member has an affirmative duty to cooperate with the retirement board including, by way of illustration and not by way of limitation the duty to furnish or have furnished to the retirement board any relevant information which is protected by any privacy act.

(f) A member who fails to cooperate with the retirement board shall not have the said time of service counted toward total service credit until such time as the member cooperates with the retirement board and until such time as the retirement board determines the validity of the service credit.

(g) A member who knowingly makes a false statement to the retirement board regarding service time or credit shall not be entitled to a retirement allowance and is entitled only to the return of his/her contributions without interest.

SECTION 3. Section 16-16-12 of the General Laws in Chapter 16-16 entitled "Procedures for Service Retirement" is hereby amended to read as follows:

{ADD 16-16-12. Procedure for service retirement. -- ADD} Retirement of a member on a service retirement allowance shall be made by the retirement board as follows:

(a) Any such member may retire upon his or her written application to the retirement board as of the first day of the calendar month in which the application was filed, provided the member was separated from service prior thereto, and further provided however, that if separation from service occurs during the month in which application is filed, the effective date shall be the first day following the separation from service and provided further that the member on retirement date has attained the age of sixty (60) years and has completed at least ten (10) years of total service, or regardless of age has completed twenty-eight (28) years of total service.

(b) Any member also paying into the retirement system under the provisions of chapter 9 of title 36 shall not be disqualified from receiving benefits provided by that chapter and the provisions of this chapter simultaneously.

(c) Except as specifically provided in sections 36-10-9.1, 36-10-12 through 36-10-15 and 45-21-19 through 45-21-22, no member shall be eligible for pension benefits under this chapter unless the member shall have been a contributing member of the employees' retirement system for at least ten (10) years.

(i) Provided, however, a person who has ten (10) years service credit shall be vested.

(ii) Furthermore, any past service credits purchased in accordance with section 36-9-38 shall be counted towards vesting.

(iii) Any person who becomes a member of the employees' retirement system pursuant to section 45-21-4 shall be considered a contributing member for the purpose of chapter 21 of title 45 and this chapter.

{ADD (iv) Notwithstanding any other provision of law, no more than five (5) years of service credit may be purchased by a member of the system. The five (5) year limit shall not apply to any purchases made prior to the effective date of this provision. A member who has purchased more than five (5) years of service credit before the effective date of this act, shall be permitted to apply such purchases towards the member's service retirement. However, no further purchase will be permitted. Repayment, in accordance with applicable law and regulation of any contribution previously withdrawn from the system shall not be deemed a purchase of service credit. ADD}

(d) No member of the teachers' retirement system shall be permitted to purchase service credits for casual or seasonal employment, for employment as a page in the general assembly, or for employment at any state college or university while the employee is a student or graduate of the college or university.

(e) Except as specifically provided in sections 16-16-6.2 and 16-16-6.4 of the general laws, a member shall not receive service credit in this retirement system for any year or portion thereof, which counts as service credit in any other retirement system in which the said member is vested or from which the said member is receiving a pension and/or any annual payment for life. This subsection shall not apply to any payments received pursuant to the Federal Social Security Act.

(f) A member who seeks to purchase or receive service credit in this retirement system shall have the affirmative duty to disclose to the retirement board whether or not he/she is a vested member in any other retirement system and/or is receiving a pension, retirement allowance, or any annual payment for life. The retirement board shall have the right to investigate as to whether or not the member has utilized the same time of service for credit in any other retirement system. The member has an affirmative duty to cooperate with the retirement board including, by way of illustration and not by way of limitation, the duty to furnish or have furnished to the retirement board any relevant information which is protected by any privacy act.

(g) A member who fails to cooperate with the retirement board shall not have the said time of service credit counted toward total service credit until such time as the member cooperates with the retirement board and until such time as the retirement board determines the validity of the service credit.

(h) A member who knowingly makes a false statement to the retirement board regarding service time or credit shall not be entitled to a retirement allowance and is entitled only to the return of his/her contributions without interest.

SECTION 4. Section 36-9-20.5 of the General Laws in Chapter 36-9 entitled "Purchase of Service Credit -- Inactive Status" is hereby amended to read as follows:

{ADD 36-9-20.5. Purchase of service credit -- Inactive status. -- ADD} Notwithstanding any general or public law to the contrary, any state employee or teacher participating in the employees' retirement system who is on workers' compensation {DEL or leave without pay DEL} may purchase up to four (4) years of service credit for time currently permitted to be purchased under law without the necessity of returning to active status as an employee. The member shall pay to the system in a lump sum the contributions he or she would have paid plus interest for the period for which the member seeks membership service credit, except as provided in section 36-9-31 for military service credit.

SECTION 5. Section 36-9-25.1 of the General Laws in Chapter 36-9 entitled "Leave Service Credits" is hereby amended to read as follows:

{ADD 36-9-25.1. Leave service credits. -- ADD} (a) Notwithstanding any other provisions of the retirement law or rulings of the retirement board in accordance with the powers vested therein, state employees with at least one year of service who have been granted by their appointing authority a leave of absence without pay to further their education in the field of their state employment, shall be entitled to credit as service for the various purposes of their retirement system, provided the person, upon completion of his or her educational leave, returns to state service {ADD for at least one year ADD} ; and provided, further that the employee makes arrangements to pay into the retirement system on or before the date of retirement and in such manner as the retirement board may prescribe, an amount equal to the contribution he or she would have made to the retirement system based upon his or her expected compensation but for the granting of leave without pay, the contributions plus regular interest compounded annually up to date of payment.

(b) Any state employee who is granted a leave of absence without pay for illness, injury, or any other reason, may receive credit therefor by making contributions to the retirement system an amount equal to the contribution he or she would have made to the retirement system based upon his or her expected compensation but for the granting of leave without pay, plus regular interest compounded annually to date of payment; provided the employee returns to state service {ADD for at least one year ADD} upon completion of the leave. Credit for leaves of absence shall be limited in the aggregate during the total service of an employee to a period of four (4) years.

SECTION 6. Section 16-16-5 of the General Laws in Chapter 16-16 entitled "Service Creditable -- Periods of Illness or Leaves" is hereby amended to read as follows:

{ADD 16-16-5. Service creditable -- Periods of illness or leaves of absence -- Substitute teachers. -- ADD} (a) In calculating "service", "prior service", or "total service" as defined in section 16-16-1, every teacher shall be given credit for a year of service for each year in which he or she shall have served as a teacher; provided, that any teacher who through illness or leave of absence without pay does not serve a full school year may receive credit therefor by making contribution to the system upon his or her return to teaching, {ADD for at least one year ADD} {DEL immediately upon completion of the leave of absence, DEL} the amount he or she would have contributed to the retirement system plus regular interest, {ADD compounded annually up to date of payment ADD} based upon his or her expected compensation but for his leave of absence in any case of illness, sabbatical, educational leave, or any other reason. Credit for leaves of absence shall be limited, in the aggregate, during the total service of a teacher to a period of four (4) years; provided, however, every teacher who had been required to resign for maternity reasons may receive credit therefor by making contribution to the system upon her return to teaching, the amount she would have contributed to the retirement system, with interest, based upon her expected compensation but for her absence due to maternity reasons. Credit for such absence shall be limited, in the aggregate, during the total service of a teacher to a period of four (4) years; provided, however, that the credit is purchased on or before December 31, 1990.

(b) The retirement board shall fix and determine the time when and the conditions under which the payments shall be made.

(c) Any teacher who serves or who has served during a school year at least three-quarters (3/4) of the number of days that the public schools are required by law to be in session during the year shall be given credit for a year of service for that year. In determining the number of days served by a substitute teacher the total number of days served in any public school of any city or town in the state may be combined for any one school year. Any such teacher shall be entitled to "prior service" credit for service prior to July 1, 1949, provided the teacher shall have been in service during the school year 1949-1950. The teacher shall be entitled to service credit for any year subsequent to July 1, 1949, by making contribution to the retirement system the amount he or she would have contributed to the retirement system, had he or she been a member, plus regular interest compounded annually to date of payment, payable at a time or in such manner as may be provided by the rules of the retirement board.

SECTION 7. Section 45-21-14.2 of the General Laws in Chapter 45-21 entitled "Leave of Absence Credits" is hereby amended to read as follows:

{ADD 45-21-14.2. Leave of absence credits. -- ADD} (a) Members with at least one year of membership credits who have been granted an official leave of absence without pay for illness, injury, educational or, any other reason, may receive credit therefor by making contributions to the retirement system, in a lump sum, in an amount equal to the contribution the member would have made to the retirement system based upon the member's expected compensation but for the granting of leave without pay, plus regular interest compounded annually to date of payment, provided the member returns to service {ADD for at least one year ADD} immediately upon completion of that leave. Credit for leaves of absence under this section shall be limited, in the aggregate, during the total service of a member to a period of four (4) years maximum.

(b) The retirement board shall fix the time when and the conditions under which payments shall be made under this section.

(c) This section shall be exempt from the provisions of sections 45-13-6 -- 45-13-10.

SECTION 8. Section 36-10-39 of the General Laws in Chapter 36-10 entitled "Retirement System -- Contribution and Benefits" is hereby amended by adding thereto the following section:

{ADD 36-10-39. Fiscal Impact of Proposed Legislation Impacting the Retirement System. -- ADD} {ADD Any proposed legislation which would increase the State's liability to the Retirement System shall not be approved by the General Assembly unless a fiscal impact note is appended to the proposed legislation which actuarially calculates, based upon approved Retirement Board assumptions, the projected twenty (20) year cost of the proposed legislation. This section shall be in addition to the requirement of title 22, chapter 12 entitled "Fiscal Notes." ADD}

SECTION 9. Chapter 36-8-8.2 of the General Laws entitled "Retirement System -- Administration" is hereby amended by adding thereto the following section: {ADD 36-8-8.2. Special Pension Benefits. -- ADD} {ADD (a) No law shall be enacted conferring special pension benefits upon any individual, or group of individuals, unless this section of law is specifically repealed ADD}

.

{ADD (b) The Retirement Board shall take no administrative action conferring special benefits upon any individual or group of individuals. ADD}

"SECTION 10. {ADD If any provision of this act or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of the act are declared to be severable." ADD}

SECTION 11. Section 36-10-10.4 of the General Laws in Chapter 36-10 entitled "Retirement System -- Contributions and Benefits" is hereby amended to read as follows:

{ADD 36-10-10.4. Effect of deferral and/or reduction of salary. -- ADD} (A) If subsequent to January 1, 1991, a member sustains a loss of salary due to a deferral of salary or a reduction in salary in order to avoid shutdowns, or layoffs or because of a retrenchment of state or local finances, then in calculating the service retirement allowance of the member, the amount of salary deferred and/or the amount of the reduction of salary shall not reduce the amount of annual compensation of the member for the purpose of establishing his or her highest three (3) consecutive years of compensation. This provision is subject to subsection (C) hereof.

(B)(1) For purposes of section (A), reduction of salary shall mean:

(a) the actual dollar amount which represents the difference between the employee's salary prior to the voluntary reduction of salary and the employee's salary after the voluntary reduction of salary; or

(b) the actual dollar amount which represents the difference between the employee's salary prior to the renegotiation and/or alteration of an existing collective bargaining agreement and the employee's salary after the renegotiation and/or alteration of an existing collective bargaining agreement.

(2) Reduction of salary also means the voluntary or negotiated reduction in the number of hours that an employee works in a pay period and for which he or she is paid.

(C) An employee who has sustained a reduction in salary and who desires to retire prior to June 30, {DEL 1994 DEL} {ADD 1995 ADD} , in accordance with subsection (a) shall pay, prior to retirement, to the retirement board an amount equal to the difference between the amount of contribution the employee would have paid on his or her salary prior to the reduction in salary and the amount that the employee actually contributed plus interest.

SECTION 12. This act shall take effect upon passage, -- {ADD except that section 1, 2 and 3 shall take effect January 1, 1995, and section 4, 5, 6 and 7 shall apply only to individuals placed on official leave of absence on or after the effective date of this act. ADD}



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