2012 -- H 7648

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LC01735

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO TOWNS AND CITIES -- RETIREMENT OF MUNICIPAL EMPLOYEES

     Introduced By: Representatives Menard, MacBeth, Guthrie, Messier, and Jacquard

     Date Introduced: February 16, 2012

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 45-21-2 of the General Laws in Chapter 45-21 entitled "Retirement

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

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     45-21-2. Definitions. -- The following words and phrases as used in this chapter have the

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following meanings unless a different meaning is plainly required by the context:

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      (1) "Accumulated contributions" means the sum of all amounts deducted from the

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compensation of a member and credited to his or her individual account in the members'

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contribution reserve account.

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      (2) "Active member" means any employee of a participating municipality as defined in

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this section for whom the retirement system is currently receiving regular contributions pursuant

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to sections 45-21-41, 45-21-41.1 or 45-21.2-14.

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      (3) "Actuarial reserve" means the present value of all payments to be made on account of

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any annuity, retirement allowance, or benefit, computed upon the basis of mortality tables

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adopted by the retirement board with regular interest.

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      (4) "Beneficiary" means any person in receipt of a retirement allowance, annuity, or

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other benefit as provided by this chapter.

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      (5) For purposes of this chapter, "domestic partner" shall be defined as a person who,

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prior to the decedent's death, was in an exclusive, intimate and committed relationship with the

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decedent, and who certifies by affidavit that their relationship met the following qualifications:

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      (i) Both partners were at least eighteen (18) years of age and were mentally competent to

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contract;

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      (ii) Neither partner was married to anyone else;

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      (iii) Partners were not related by blood to a degree which would prohibit marriage in the

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state of Rhode Island;

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      (iv) Partners resided together and had resided together for at least one year at the time of

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death; and

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      (v) Partners were financially interdependent as evidenced by at least two (2) of the

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following:

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      (A) Domestic partnership agreement or relationship contract;

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      (B) Joint mortgage or joint ownership of primary residence;

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      (C) Two (2) of: (I) Joint ownership of motor vehicle; (II) Joint checking account; (III)

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Joint credit account; (IV) Joint lease; and/or

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      (D) The domestic partner had been designated as a beneficiary for the decedent's will,

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retirement contract or life insurance.

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      (6) "Effective date of participation" means the date on which the provisions of this

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chapter have become applicable to a municipality accepting the provisions of the chapter in the

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manner stated in section 45-21-4.

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      (7) "Employee" means any regular and permanent employee or officer of any

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municipality, whose business time at a minimum of twenty (20) hours a week is devoted to the

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service of the municipality, including elective officials and officials and employees of city and

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town housing authorities. Notwithstanding the previous sentence, the term "employee", for the

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purposes of this chapter, does not include any person whose duties are of a casual or seasonal

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nature. The retirement board shall decide who are employees within the meaning of this chapter,

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but in no case shall it deem as an employee any individual who annually devotes less than twenty

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(20) business hours per week to the service of the municipality and who receives less than the

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equivalent of minimum wage compensation on an hourly basis for his or her services, except as

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provided in section 45-21-14.1. Casual employees mean those persons hired for an occasional

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period or a period of emergency to perform special jobs or functions not necessarily related to the

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work of regular employees. Any commissioner of a municipal housing authority, or any member

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of a part-time state board commission, committee or other authority is not deemed to be an

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employee within the meaning of this chapter.

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      (8) "Final compensation" for members who are eligible to retire on or prior to June 30,

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2012 shall means the average annual compensation, pay, or salary of a member for services

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rendered during the period of three (3) consecutive years within the total service of the member

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when the average was highest, and as the term average annual compensation is further defined in

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subdivision 36-8-1(5)(a). For members eligible to retire on or after July 1, 2012, "final

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compensation" means the average of the highest five (5) consecutive years of compensation

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within the total service when the final compensation was the highest. For members who become

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eligible to retire on or after July 1, 2012, if more than one half (1/2) of the member's total years of

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service consist of years of service during which the member devoted less than thirty (30) business

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hours per week to the service of the municipality, but the member's average compensation

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consists of three (3) or more years during which the member devoted more than thirty (30)

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business hours per week to the service of a municipality, such member's average compensation

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shall mean the average of the highest ten (10) consecutive years of compensation within the total

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service when the average compensation was the highest. Notwithstanding the preceding

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provisions, in no event shall a member's final compensation be lower than his or her final

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compensation determined as of June 30, 2012; provided, however, that where a portion of the

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member’s total services consists of any elective or appointive municipal office or membership on

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a board or commission, the “final compensation” shall be the average of the salary, wage, or

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stipend paid in all of the years counted toward the member’s total service.

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      (9) "Fiscal year" means the period beginning on July 1 in any year and ending on June

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30 of the next succeeding year.

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      (10) "Full actuarial costs" or "full actuarial value" mean the lump sum payable by a

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member claiming service credit for certain employment for which payment is required, which is

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determined according to the age of the member and his or her annual rate of compensation at the

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time he or she applies for service credit, and which is expressed as a rate percent of the annual

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rate of compensation to be multiplied by the number of years for which he or she claims the

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service credit, as prescribed in a schedule adopted by the retirement board, from time to time, on

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the basis of computation by the actuary. Except as provided in sections 16-16-7.1, 36-5-3, 36-9-

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31, 36-10-10.4, and subdivision 45-21-53: (i) All service credit purchases requested after June 16,

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2009 and prior to July 1, 2012, shall be at full actuarial value; and (ii) All service credit purchases

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requested after June 30, 2012 shall be at full actuarial value which shall be determined using the

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system's assumed investment rate of return minus one percent (1%).

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      (11) "Governing body" means any and all bodies empowered to appropriate monies for,

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and administer the operation of, the units as defined in subdivision (1) of this section.

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      (12) "Member" means any person included in the membership of the retirement system

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as provided in section 45-21-8.

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      (13) "Municipality" means any town or city in the state of Rhode Island, any city or town

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housing authority, fire, water, sewer district, regional school district, public building authority as

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established by chapter 14 of title 37, or any other municipal financed agency to which the

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retirement board has approved admission in the retirement system.

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      (14) "Participating municipality" means any municipality which has accepted this

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chapter, as provided in section 45-21-4.

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      (15) "Prior service" means service as a member rendered before the effective date of

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participation as defined in this section, certified on his or her prior service certificate, and

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allowable as provided in section 45-21-15.

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      (16) "Regular interest" means interest at the assumed investment rate of return,

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compounded annually, as may be prescribed from time to time by the retirement board.

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      (17) "Retirement allowance" or "annuity" means the amounts paid to any member of the

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municipal employees' retirement system of the state of Rhode Island, or a survivor of the

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member, as provided in this chapter. All retirement allowances or annuities shall be paid in equal

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monthly installments for life, unless otherwise specifically provided.

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      (18) "Retirement board" or "board" means the state retirement board created by chapter 8

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of title 36.

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      (19) "Retirement system" means the "municipal employees' retirement system of the

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state of Rhode Island" as defined in section 45-21-32.

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      (20) "Service" means service as an employee of a municipality of the state of Rhode

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Island as defined in subdivision (7).

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      (21) "Total service" means prior service as defined in subdivision (15) plus service

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rendered as a member on or after the effective date of participation.

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      (22) Any term not specifically defined in this chapter and specifically defined in chapters

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36-8 through 36-10 shall have the same definition as set forth in chapters 36-8 through 36-10.

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     SECTION 2. This act shall take effect upon passage.

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LC01735

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TOWNS AND CITIES -- RETIREMENT OF MUNICIPAL EMPLOYEES

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     This act would determine final compensation to be the average of the salary, wage, or

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stipend paid in all the years counted toward the member’s total service in cases where a portion of

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the service consisted of any elective or appointed municipal office or membership on a board or

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commission.

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     This act would take effect upon passage.

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LC01735

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