2012 -- H 7814

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LC01602

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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 PUBLIC OFFICERS AND EMPLOYEES - RETIREMENT SYSTEM -

CONTRIBUTIONS AND BENEFITS

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

     Date Introduced: February 28, 2012

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 36-10-9 of the General Laws in Chapter 36-10 entitled "Retirement

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

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     36-10-9. Retirement on service allowance -- In general. -- Retirement of a member on

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a service retirement allowance shall be made by the retirement board as follows:

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      (1) (a) (i) Any member may retire upon his or her written application to the retirement

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board as of the first day of the calendar month in which the application was filed; provided, the

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member was separated from service prior thereto; and further provided, however, that if

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separation from service occurs during the month in which application is filed, the effective date

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shall be the first day following that separation from service; and provided further that the member

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on his or her retirement date attained the age of sixty (60) and completed at least ten (10) years of

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contributory service on or before July 1, 2005 or who, regardless of age, has completed twenty-

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eight (28) years of total service and has completed at least ten (10) years of contributory service

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on or before July 1, 2005, and who retire before October 1, 2009 or are eligible to retire as of

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September 30, 2009.

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      (ii) For members who become eligible to retire on or after October 1, 2009 and prior to

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July 1, 2012, benefits are available to members who have attained the age of sixty-two (62) and

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completed at least ten (10) years of contributory service. For members in service as of October 1,

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2009 who were not eligible to retire as of September 30, 2009 but become eligible to retire prior

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to July 1, 2012, the minimum retirement age of sixty-two (62) will be adjusted downward in

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proportion to the amount of service the member has earned as of September 30, 2009. The

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proportional formula shall work as follows:

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      (1) The formula shall determine the first age of retirement eligibility under the laws in

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effect on September 30, 2009 which shall then be subtracted from the minimum retirement age of

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sixty-two (62).

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      (2) The formula shall then take the member's total service credit as of September 30,

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2009 as the numerator and the years of service credit determined under (1) as the denominator.

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      (3) The fraction determined in (2) shall then be multiplied by the age difference

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determined in (1) to apply a reduction in years from age sixty-two (62).

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      (b) (i) Any member, who has not completed at least ten (10) years of contributory

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service on or before July 1, 2005, may retire upon his or her written application to the retirement

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board as of the first day of the calendar month in which the application was filed; provided, the

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member was separated from service prior thereto; and further provided, however, that if

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separation from service occurs during the month in which application is filed, the effective date

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shall be the first day following that separation from service; provided, the member or his or her

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retirement date had attained the age of fifty-nine (59) and had completed at least twenty-nine (29)

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years of total service or provided that the member on his or her retirement date had attained the

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age of sixty-five (65) and had completed at least ten (10) years of contributory service; or

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provided, that the member on his or her retirement date had attained the age of fifty-five (55) and

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had completed twenty (20) years of total service provided, that the retirement allowance, as

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determined according to the formula in section 36-10-10 is reduced actuarially for each month

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that the age of the member is less than sixty-five (65) years, and who retire before October 1,

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

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      (ii) For members who become eligible to retire on or after October 1, 2009 and prior to

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July 1, 2012, benefits are available to members who have attained the age of sixty-two (62) and

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completed at least twenty-nine (29) years of total service or have attained the age of sixty-five

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(65) and completed at least ten (10) years of contributory service. For members in service as of

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October 1, 2009 who were not eligible to retire as of September 30, 2009 but become eligible to

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retire prior to July 1, 2012, who have a minimum retirement age of sixty-two (62), the retirement

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age will be adjusted downward in proportion to the amount of service the member has earned as

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of September 30, 2009. The proportional formula shall work as follows:

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      (1) The formula shall determine the first age of retirement eligibility under the laws in

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effect on September 30, 2009 which shall then be subtracted from the minimum retirement age of

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sixty-two (62).

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      (2) The formula shall then take the member's total service credit as of September 30,

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2009 as the numerator and the years of service credit determined under (1) as the denominator.

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      (3) The fraction determined in (2) above shall then be multiplied by the age difference

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determined in (1) to apply a reduction in years from age sixty-two (62).

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      (c) Effective July 1, 2012, the following shall apply to all members not eligible to retire

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prior to July 1, 2012:

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      (i) A member with contributory service on or after July 1, 2012, shall be eligible to retire

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upon the completion of at least five (5) years of contributory service and attainment of the

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member's Social Security retirement age.

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      (ii) For members with five (5) or more years of contributory service as of June 30, 2012,

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with contributory service on and after July 1, 2012, who have a retirement age of Social Security

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Retirement Age, the retirement age will be adjusted downward in proportion to the amount of

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service the member has earned as of June 30, 2012, but in no event shall a member's retirement

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age under this subparagraph (ii) be prior to the attainment of age fifty-nine (59) or prior to the

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member's retirement age determined under the laws in effect on June 30, 2012. The proportional

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formula shall work as follows:

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      (1) The formula shall determine the first age of retirement eligibility under the laws in

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effect on June 30, 2012 which shall then be subtracted from Social Security retirement age;

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      (2) The formula shall then take the member's total service credit as of June 30, 2012 as

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the numerator and the projected service at retirement age in effect on June 30, 2012 as the

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denominator;

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      (3) The fraction determined in (2) shall then be multiplied by the age difference

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determined in (1) to apply a reduction in years from Social Security retirement age.

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      (iii) A member who has completed twenty (20) or more years of total service and who

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has attained an age within five (5) years of the eligible retirement age under subparagraphs (c)(i)

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or (c)(ii) above, may elect to retire provided that the retirement allowance shall be reduced

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actuarially for each month that the age of the member is less than the eligible retirement age

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under subparagraphs (c)(i) or (c)(ii) above.

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      (iv) Notwithstanding any other provisions of section 36-10-9(c), a member who has

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completed ten (10) or more years of contributory service as of June 30, 2012, may elect to retire

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at his or her eligible retirement date as determined under paragraphs (1)(a) and (1)(b) above

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provided that a member making an election under this paragraph shall receive the member's

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retirement benefit determined and calculated based on the member's service and average

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compensation as of June 30, 2012. This provision shall be interpreted and administered in a

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manner to protect a member's accrued benefit on June 30, 2012.

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      (2) Any faculty employee at a public institution of higher education under the

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jurisdiction of the board of governors for higher education shall not be involuntarily retired upon

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attaining the age of seventy (70) years.

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      (3) (i) Except as specifically provided in section 36-10-9.1, sections 36-10-12 -- 36-10-

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15, and sections 45-21-19 -- 45-21-22, (I) On or prior to June 30, 2012 no member shall be

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eligible for pension benefits under this chapter unless the member shall have been a contributing

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member of the employee's retirement system for at least ten (10) years, or (II) For members in

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active contributory service on or after July 1, 2012, the member shall have been a contributing

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member of the retirement system for at least five (5) years.

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      (ii) Provided, however, a person who has ten (10) years service credit on or before June

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16, 1991, shall be vested.

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      (iii) Furthermore, any past service credits purchased in accordance with section 36-9-38

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shall be counted towards vesting.

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      (iv) Any person who becomes a member of the employees' retirement system pursuant to

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section 45-21-4 shall be considered a contributing member for the purpose of chapter 21 of title

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45 and this chapter.

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      (v) Notwithstanding any other provision of law, no more than five (5) years of service

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credit may be purchased by a member of the system. The five (5) year limit shall not apply to any

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purchases made prior to January 1, 1995. A member who has purchased more than five (5) years

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of service credits before January 1, 1995, shall be permitted to apply those purchases towards the

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member's service retirement. However, no further purchase will be permitted. Repayment in

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accordance with applicable law and regulation of any contribution previously withdrawn from the

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system shall not be deemed a purchase of service credit.

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      (vi) Notwithstanding any other provision of law, effective July 1, 2012, except for

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purchases under sections 16-16-7.1, 36-5-3, 36-9-31, 36-10-10.4, and 45-21-53, (A) For service

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purchases for time periods prior to a member's initial date of hire, the purchase must be made

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within three (3) years of the member's initial date of hire, (B) For service purchases for time

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periods for official periods of leave as authorized by law, the purchase must be made within three

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(3) years of the time the official leave was concluded by the member. Notwithstanding the

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preceding sentence, service purchases from time periods prior to June 30, 2012 may be made on

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or prior to June 30, 2015.

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      (4) No member of the employees' retirement system shall be permitted to purchase

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service credits for casual, seasonal, or temporary employment, or emergency appointment, for

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employment as a page in the general assembly, or for employment at any state college or

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university while the employee is a student or graduate assistant of the college or university.

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      (5) Except as specifically provided in sections 16-16-6.2 and 16-16-6.4, a member shall

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not receive service credit in this retirement system for any year or portion of it, which counts as

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service credit in any other retirement system in which the member is vested or from which the

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member is receiving a pension and/or any annual payment for life. This subsection shall not apply

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to any payments received pursuant to the federal Social Security Act or to payments from a

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military pension earned prior to participation in state or municipal employment, or to military

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service credits earned prior to participation in state or municipal employment.

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      (6) A member who seeks to purchase or receive service credit in this retirement system

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shall have the affirmative duty to disclose to the retirement board whether or not he or she is a

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vested member in any other retirement system and/or is receiving a pension, retirement

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allowance, or any annual payment for life. The retirement board shall have the right to investigate

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as to whether or not the member has utilized the same time of service for credit in any other

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retirement system. The member has an affirmative duty to cooperate with the retirement board

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including, by way of illustration and not by way of limitations the duty to furnish or have

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furnished to the retirement board any relevant information which is protected by any privacy act.

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      (7) A member who fails to cooperate with the retirement board shall not have the time of

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service counted toward total service credit until such time as the member cooperates with the

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retirement board and until such time as the retirement board determines the validity of the service

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credit.

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      (8) A member who knowingly makes a false statement to the retirement board regarding

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service time or credit shall not be entitled to a retirement allowance and is entitled only to the

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return of his or her contributions without interest.

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     (9) Any elected or appointed municipal official or member of a board or commission who

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is currently devoting less than thirty (30) business hours per week to the service of the state

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and/or a municipality, and who has not qualified or is not eligible to retire or collect a pension

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shall no longer be qualified to participate in, or accrue time in the retirement system. Any such

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employee who has qualified or is eligible to retire or collect a pension shall no longer be eligible

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to accrue further service credits.

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     SECTION 2. This act shall take effect upon passage.

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LC01602

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES - RETIREMENT SYSTEM -

CONTRIBUTIONS AND BENEFITS

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     This act would provide that an elected or appointed municipal official or member of a

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board or commission currently devoting less than thirty (30) business hours per week to the

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service of the state and/or a municipality, and who has not qualified or is not eligible to retire or

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collect a pension would no longer be qualified to participate in or accrue time in the retirement

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system. Any such employee who has qualified or is eligible to retire or collect a pension would no

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longer be eligible to accrue further service credits.

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     This act would take effect upon passage.

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LC01602

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