2014 -- H 7802

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LC004870

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM--

CONTRIBUTION AND BENEFITS

     

     Introduced By: Representative Spencer E.Dickinson

     Date Introduced: March 04, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Legislative intent and findings.

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     SECTION 2. Section 36-8-1 of the General Laws in Chapter 36-8 entitled "Retirement

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System - Administration" is hereby amended to read as follows:

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     36-8-1. Definition of terms. -- The following words and phrases as used in chapters 8 to

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10 of this title unless a different meaning is plainly required by the context, shall have the

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following meanings:

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

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the compensation of a member and credited to his or her individual pension account.

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      (2) "Active member" shall mean any employee of the state of Rhode Island 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 36-10-1 and 36-10-1.1.

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      (3) "Actuarial equivalent" shall mean an allowance or benefit of equal value to any other

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allowance or benefit when computed upon the basis of the actuarial tables in use by the system.

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      (4) "Annuity reserve" shall mean the present value of all payments to be made on

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account of any annuity, benefit, or retirement allowance granted under the provisions of chapter

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10 of this title computed upon the basis of such mortality tables as shall be adopted from time to

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time by the retirement board with regular interest.

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      (5) (a) "Average compensation" for members eligible to retire as of September 30, 2009

 

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shall mean the average of the highest three (3) consecutive years of compensation, within the total

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service when the average compensation was the highest. For members eligible to retire on or after

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October 1, 2009, "Average compensation" shall mean the average of the highest five (5)

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consecutive years of compensation within the total service when the average compensation was

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the highest.

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      (b) For members who become eligible to retire on or after July 1, 2012, if more than one

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half (1/2) of the member's total years of service consist of years of service during which the

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member devoted less than thirty (30) business hours per week to the service of the state, but the

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member's average compensation consists of three (3) or more years during which the member

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devoted more than thirty (30) business hours per week to the service of the state, such member's

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

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compensation within the total service when the average compensation was the highest; provided,

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however, effective July 1, 2014, if such member's average compensation as defined in paragraph

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(a) above is equal to or less than thirty-five thousand dollars ($35,000), such amount to be

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indexed annually in accordance with § 36-10-35(h)(l)(B), such member's average compensation

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shall mean the greater of:

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     (i) 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; or

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     (ii) The member's average compensation as defined in paragraph (a) above. To protect a

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member's accrued benefit on June 30, 2012 under § 36-8-1(5)(b), in no event shall a member's

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average compensation be lower than his or her average compensation determined as of June 30,

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2012.

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      (6) "Beneficiary" shall mean any person in receipt of a pension, an annuity, a retirement

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allowance, or other benefit as provided by chapter 10 of this title.

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      (7) "Casual employee" shall mean those persons hired for a temporary period, a period of

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emergency or an occasional period.

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      (8) "Compensation" as used in chapters 8 -- 10 of this title, chapters 16 and 17 of title 16,

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and chapter 21 of title 45 shall mean salary or wages earned and paid for the performance of

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duties for covered employment, including regular longevity or incentive plans approved by the

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board, but shall not include payments made for overtime or any other reason other than

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performance of duties, including but not limited to the types of payments listed below:

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      (i) Payments contingent on the employee having terminated or died;

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      (ii) Payments made at termination for unused sick leave, vacation leave, or

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compensatory time;

 

LC004870 - Page 2 of 70

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      (iii) Payments contingent on the employee terminating employment at a specified time in

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the future to secure voluntary retirement or to secure release of an unexpired contract of

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employment;

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      (iv) Individual salary adjustments which are granted primarily in anticipation of the

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employee's retirement;

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      (v) Additional payments for performing temporary or extra duties beyond the normal or

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regular work day or work year.

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      (9) "Employee" shall mean any officer or employee of the state of Rhode Island whose

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business time is devoted exclusively to the services of the state, but shall not include one whose

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duties are of a casual or seasonal nature. The retirement board shall determine who are employees

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within the meaning of this chapter. The governor of the state, the lieutenant governor, the

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secretary of state, the attorney general, the general treasurer, and the members of the general

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assembly, ex officio, shall not be deemed to be employees within the meaning of that term unless

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and until they elect to become members of the system as provided in section 36-9-6, but in no

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case shall it deem as an employee, for the purposes of this chapter, any individual who devotes

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

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than the equivalent of minimum wage compensation on an hourly basis for his or her services,

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except as provided in section 36-9-24. Any commissioner of a municipal housing authority or any

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member of a part-time state, municipal or local board, commission, committee or other public

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authority shall not be deemed to be an employee within the meaning of this chapter.

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

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

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is determined according to the age of the member and the employee's annual rate of compensation

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

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employee's annual rate of compensation to be multiplied by the number of years for which he or

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she claims service credit as prescribed in a schedule adopted by the retirement board from time to

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

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36-9-31, 36-10-10.4, 45-21-53, 36-10-8, 45-21-29, 8-3-16(b), 8-8-10.1(b), 42-28-22.1(b) and 28-

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30-18.1(b).

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      (i) all service credit purchases requested after June 16, 2009 and prior to July 1, 2012,

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shall be at full actuarial value and

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      (ii) all service credit purchases requested after June 30, 2012 shall be at full actuarial

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value which shall be determined using the system's assumed investment rate of return minus one

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percent (1%).

 

LC004870 - Page 3 of 70

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      The rules applicable to a service credit purchase shall be the rules of the retirement

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system in effect at the time the purchase application is submitted to the retirement system.

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      (11) "Inactive member" shall mean a member who has withdrawn from service as an

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employee but who has not received a refund of contributions.

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      (12) "Members" shall mean any person included in the membership of the retirement

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system as provided in sections 36-9-1 -- 36-9-7.

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      (13) "Prior service" shall mean service as a member rendered before July 1, 1936,

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certified on his or her prior service certificate and allowable as provided in section 36-9-28.

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      (14) "Regular interest" shall mean 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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      (15) "Retirement allowance" shall mean annual payments for life made after retirement

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under and in accordance with chapters 8 to 10 of this title. All allowances shall be paid in equal

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monthly installments beginning as of the effective date thereof; provided, that a smaller pro rata

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amount may be paid for part of a month where separation from service occurs during the month

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in which the application was filed, and when the allowance ceases before the last day of the

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month.

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      (16) "Retirement board" or "board" shall mean the board provided in section 36-8-3 to

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administer the retirement system.

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      (17) "Retirement system" shall mean the employees' retirement system of the state of

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Rhode Island as defined in section 36-8-2.

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      (18) "Service" shall mean service as an employee of the state of Rhode Island as

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described in subdivision (9) of this section.

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      (19) "Social Security retirement age" shall mean a member's full retirement age as

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determined in accordance with the federal Old Age, Survivors and Disability Insurance Act, not

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to exceed age sixty-seven (67).

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      (20) "Total service" shall mean prior service as defined above, plus service rendered as a

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member on or after July 1, 1936.

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     SECTION 3. Section 36-10-1 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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     36-10-1. Member contributions -- Deduction from compensation. -- (a) Prior to July

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1, 2012, each member of the retirement system shall contribute an amount equal to eight and

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three-quarters percent (8.75%) of his or her compensation as his or her share of the cost of

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annuities, benefits, and allowances. Effective July 1, 2012, each member of the retirement system

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shall contribute an amount equal to three and three quarters percent (3.75%) of his or her

 

LC004870 - Page 4 of 70

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compensation, except for correctional officers as defined in section 36-10-9.2 who shall

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contribute an amount equal to eight and three quarters percent (8.75%) of his or her

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compensation. Effective July 1, 2014, each member of the retirement system, except for

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correctional officers as defined in § 36-10-9.2, with twenty (20) or more years of total service as

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of June 30, 2012 shall contribute an amount equal to eleven percent (11%) of compensation. The

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contributions shall be made in the form of deductions from compensation.

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      (b) The deductions provided for herein shall be made notwithstanding that the minimum

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compensation provided by law for any member shall be reduced thereby. Every member shall be

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deemed to consent and agree to the deductions made and provided for herein and receipt of his or

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her full compensation and payment of compensation, less the deductions, shall be a full and

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complete discharge and acquittance of all claims and demands whatsoever for the services

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rendered by the person during the period covered by the payment except as to the benefit

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provided under this chapter.

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     SECTION 4. 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:

 

LC004870 - Page 5 of 70

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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.

 

LC004870 - Page 6 of 70

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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 or subparagraph (d) below, may elect to retire provided that the retirement

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allowance shall be reduced actuarially for each month that the age of the member is less than the

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eligible retirement age under subparagraphs (c)(i) or (c)(ii) above or subparagraph (d) below in

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accordance with the following table:

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Year Preceding Retirement Cumulative Annual Reduction Cumulative Monthly Reduction

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For Year 1 9% .75%

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For Year 2 8% .667%

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For Year 3 7% .583%

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For Year 4 7% .583%

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For Year 5 7% .583%.

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

 

LC004870 - Page 7 of 70

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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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     (d) Notwithstanding any other provisions of subparagraph (c) above, effective July 1,

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2014, a member in active service as of June 30,2012 shall be eligible to retire upon the earlier of:

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(A) The attainment of at least age sixty-five (65) and the completion of at least thirty (30) years of

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total service; or (B) The member's retirement eligibility date under subparagraphs (c)(i) or (c)(ii)

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above.

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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.

 

LC004870 - Page 8 of 70

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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

31

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.

 

LC004870 - Page 9 of 70

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     SECTION 5. Section 36-10-10 of the General Laws in Chapter 36-10 entitled

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

3

     36-10-10. Amount of service retirement allowance. -- (a) (1) (i) For employees

4

eligible to retire on or before September 30, 2009, upon retirement for service under section 36-

5

10-9, a member whose membership commenced before July 1, 2005 and who has completed at

6

least ten (10) years of contributory service on or before July 1, 2005 shall receive a retirement

7

allowance which shall be determined in accordance with schedule A below for service prior to

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July 1, 2012:

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Schedule A

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Years of Service Percentage Allowance

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1st through 10th inclusive 1.7%

12

11th through 20th inclusive 1.9%

13

21st through 34th inclusive 3.0%

14

35th 2.0%

15

     (ii) For employees eligible to retire on or after October 1, 2009, who were not eligible to

16

retire on or before September 30, 2009, upon retirement from service under section 36-10-9, a

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member whose membership commenced before July 1, 2005 and who has completed at least ten

18

(10) years of contributory service on or before July 1, 2005 shall receive a retirement allowance

19

which shall be determined in accordance with schedule A above for service on before September

20

30, 2009, and shall be determined in accordance with schedule B in subsection (a)(2) below for

21

service on or after October 1, 2009 and prior to July 1, 2012. (2) Upon retirement for service

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under section 36-10-9, a member whose membership commenced after July 1, 2005, or who has

23

not completed at least ten (10) years of contributory service as of July 1, 2005, shall, receive a

24

retirement allowance which shall be determined in accordance with Schedule B below for service

25

prior to July 1, 2012:

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Schedule B

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Years of Service Percentage Allowance

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1st through 10th inclusive 1.60%

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11th through 20th inclusive 1.80%

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21st through 25th inclusive 2.0%

31

26th through 30th inclusive 2.25%

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31st through 37th inclusive 2.50%

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38th 2.25%

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      (b) The retirement allowance of any member whose membership commenced before July

 

LC004870 - Page 10 of 70

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1, 2005 and who has completed at least ten (10) years of contributory service on or before July 1,

2

2005 shall be in an amount equal to the percentage allowance specified in subsection (a)(1) of his

3

or her average highest three (3) consecutive years of compensation multiplied by the number of

4

years of total service, but in no case to exceed eighty percent (80%) of the compensation payable

5

at completion of thirty-five (35) years of service; provided, however, for employees retiring on or

6

after October 1, 2009 who were not eligible to retire as of September 30, 2009 the calculation

7

shall be based on the average highest five (5) consecutive years of compensation. Any member

8

who has in excess of thirty-five (35) years on or before June 2, 1985, shall not be entitled to any

9

refund, and any member with thirty-five (35) years or more on or after June 2, 1985, shall

10

contribute from July 1, 1985, until his or her retirement. The retirement allowance of any

11

member whose membership commenced after July 1, 2005 or who had not completed at least ten

12

(10) years of contributory service as of July 1, 2005, shall, be in an amount equal to the

13

percentage allowance specified in Schedule B of his or her average highest three (3) consecutive

14

years of compensation multiplied by the number of years of total service, but in no case to exceed

15

seventy-five percent (75%) of the compensation payable at the completion of thirty-eight (38)

16

years of service; provided, however, for employees retiring on or after October 1, 2009 who were

17

not eligible to retire as of September 30, 2009 the calculation shall be based on the average

18

highest five (5) consecutive years of compensation.

19

     (c) Any member with thirty-eight (38) years or more of service prior to December 31,

20

1985, shall not be required to make additional contributions. Contributions made between

21

December 31, 1985, and July 1, 1987, by members with thirty-eight (38) or more years of service

22

prior to December 31, 1985, shall be refunded by the retirement board to the persons, their heirs,

23

administrators, or legal representatives.

24

     (d) For service prior to July 1, 2012, the retirement allowance of a member shall be

25

determined in accordance with subsections (a)(1) and (a)(2) above. For service on and after July

26

1, 2012, a member's retirement allowance shall be equal to:

27

     (1) For members with fewer than twenty (20) years of total services as of June 30, 2012,

28

one percent (1%) of the member's average compensation multiplied by the member's years of

29

total service on and after July 1 2012. ; and

30

     (2) For members with twenty (20) or more years of total service as of June 30, 2012, a

31

member's retirement allowance shall be equal to one percent (1 %) of the member's average

32

compensation multiplied by the member's years of total service between July 1, 2012 and June

33

30, 2014, and two percent (2%) of the member's average compensation multiplied by the

34

member's years of total service on and after July 1, 2014. For purposes of computing a member's

 

LC004870 - Page 11 of 70

1

total service under the preceding sentence, service purchases shall be included in total service

2

only with respect to those service purchases approved prior to June 30, 2012 and those

3

applications for service purchases received by the retirement system on or before June 30, 2012.

4

In no event shall a member's retirement allowance exceed the maximum limitations set forth in

5

paragraph (b) above.

6

     SECTION 6. Section 36-10-10.2 of the General Laws in Chapter 36-10 entitled

7

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

8

     36-10-10.2. Amount of service retirement allowance -- Correctional officers. -- (a)

9

Upon retirement for service under section 36-10-9.2, a member with twenty-five (25) or more

10

years of service as of June 30, 2012 shall receive a retirement allowance of an amount determined

11

under (i) below. All other members shall receive a retirement allowance of an amount equal to the

12

sum of (i) below for service prior to July 1, 2012, plus (ii) below for service on and after July 1,

13

2012. (i) Two percent (2%) of his or her average compensation multiplied by his or her first

14

thirty (30) years of total service within the department of corrections; any and all years of

15

remaining service shall be issued to the member at a retirement allowance of an amount equal to

16

his or her average compensation multiplied by the percentage allowance determined in

17

accordance with Schedule A below:

18

Schedule A

19

Years of Service Percentage Allowance

20

1 through 30 inclusive 2%

21

31st 6%

22

32nd 5%

23

33rd 4%

24

34th 3%

25

35th 2%

26

      (ii) On and after July 1, 2012, Two two percent (2%) of his or her average compensation

27

multiplied by his or her first thirty (30) years of service years of service on and after July 1, 2012

28

within the department of corrections, and three percent (3%) of his or her average compensation

29

multiplied by the member's thirty-first (31st) through thirty-fifth (35th) years of service.

30

     (b) In no case shall a retirement percentage allowance exceed the greater of the member's

31

retirement percentage allowance on June 30, 2012 or seventy-five percent (75%). Any member

32

who has in excess of thirty-five (35) years on or before July 1, 1987, shall not be entitled to any

33

refund. Any member with thirty-five (35) years or more on or after July 1, 1987, shall contribute

34

from July 1, 1987, until his or her retirement, provided, however, that any member with thirty-

 

LC004870 - Page 12 of 70

1

eight (38) years of service prior to July 1, 1987, shall not be required to contribute.

2

     SECTION 7. Section 36-10-35 of the General Laws in Chapter 36-10 entitled

3

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

4

     36-10-35. Additional benefits payable to retired employees. -- (a) All state employees

5

and all beneficiaries of state employees receiving any service retirement or ordinary or accidental

6

disability retirement allowance pursuant to the provisions of this title on or before December 31,

7

1967, shall receive a cost of living retirement adjustment equal to one and one-half percent

8

(1.5%) per year of the original retirement allowance, not compounded, for each calendar year the

9

retirement allowance has been in effect. For the purposes of computation, credit shall be given for

10

a full calendar year regardless of the effective date of the retirement allowance. This cost of living

11

adjustment shall be added to the amount of the retirement allowance as of January 1, 1968, and an

12

additional one and one-half percent (1.5%) shall be added to the original retirement allowance in

13

each succeeding year during the month of January, and provided further, that this additional cost

14

of living increase shall be three percent (3%) for the year beginning January 1, 1971, and each

15

year thereafter, through December 31, 1980. Notwithstanding any of the above provisions, no

16

employee receiving any service retirement allowance pursuant to the provisions of this title on or

17

before December 31, 1967, or the employee's beneficiary, shall receive any additional benefit

18

hereunder in an amount less than two hundred dollars ($200) per year over the service retirement

19

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

20

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

21

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

22

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

23

following the third anniversary date of the retirement, receive a cost of living retirement

24

adjustment, in addition to his or her retirement allowance, in an amount equal to three percent

25

(3%) of the original retirement allowance. In each succeeding year thereafter through December

26

31, 1980, during the month of January, the retirement allowance shall be increased an additional

27

three percent (3%) of the original retirement allowance, not compounded, to be continued during

28

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

29

for a full calendar year regardless of the effective date of the service retirement allowance.

30

      (c) (1) Beginning on January 1, 1981, for all state employees and beneficiaries of the

31

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

32

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

33

July 1, 2005 pursuant to the provisions of this chapter, and for all state employees, and all

34

beneficiaries of state employees who receive a disability retirement allowance pursuant to

 

LC004870 - Page 13 of 70

1

sections 36-10-12 -- 36-10-15, the cost of living adjustment shall be computed and paid at the rate

2

of three percent (3%) of the original retirement allowance or the retirement allowance as

3

computed in accordance with section 36-10-35.1, compounded annually from the year for which

4

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

5

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

6

available to members who retire before October 1, 2009 or are eligible to retire as of September

7

30, 2009.

8

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

9

retroactive payment shall be made.

10

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

11

employees who have not completed at least ten (10) years of contributory service on or before

12

July 1, 2005 or were not eligible to retire as of September 30, 2009, shall, on the month following

13

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

14

succeeding year be adjusted and computed by multiplying the retirement allowance by three

15

percent (3%) or the percentage of increase in the Consumer Price Index for all Urban Consumers

16

(CPI-U) as published by the United States Department of Labor Statistics determined as of

17

September 30 of the prior calendar year, whichever is less; the cost of living adjustment shall be

18

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

19

payable by the retirement board; provided, that no adjustment shall cause any retirement

20

allowance to be decreased from the retirement allowance provided immediately before such

21

adjustment.

22

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

23

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

24

cost of living adjustment described in subsection (3) above shall only apply to the first thirty-five

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC004870 - Page 14 of 70

1

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

2

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

3

apply.

4

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

5

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

6

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

7

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

8

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

9

allowance shall be increased an additional three percent (3%) of the original retirement

10

allowance, compounded annually, to be continued during the lifetime of the legislator or

11

beneficiary. For the purposes of computation, credit shall be given for a full calendar year

12

regardless of the effective date of the service retirement allowance.

13

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

14

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

15

2014. Notwithstanding the prior paragraphs of this section, and subject to paragraph (g)(2) below,

16

for all present and former employees, active and retired members, and beneficiaries receiving any

17

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

18

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

19

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

20

"subtrahend") from the Five-Year Average Investment Return of the retirement system

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd)

29

anniversary of the date of retirement or the date on which the retiree reaches his or her Social

30

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

31

actuarially assumed rate of return for the system, either upward or downward, the subtrahend

32

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

33

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

34

any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

 

LC004870 - Page 15 of 70

1

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

2

State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

3

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

4

members for such plan year.

5

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

6

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

7

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

8

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

9

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

10

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

11

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

12

above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, the

13

Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by

14

the system's actuary on an aggregate basis, exceeds eighty percent (80%).

15

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

16

(g) of section 36-10-35 shall become effective July 1, 2012 and shall apply to any benefit

17

adjustment not granted on or prior to June 30, 2012.

18

     (h) This subsection shall become effective July l, 2014.

19

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

20

paragraph, a one-time benefit adjustment shall be provided to members and/or beneficiaries of

21

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

22

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

23

the member's retirement allowance. This one-time benefit adjustment shall be provided without

24

regard to the retiree's age or number of years since retirement.

25

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

26

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

27

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

28

year under this section for adjustments on and after January l, 2015, and subject to paragraph

29

(h)(2) below, shall be equal to (I) multiplied by (II):

30

     (I) Shall equal the sum of fifty percent (50%) of subsection (i) plus fifty percent (50%) or

31

(ii) where:

32

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

33

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

34

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

 

LC004870 - Page 16 of 70

1

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

2

(0%). The "Five-Year Average Investment Return" shall mean the average of the investment

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

five thousand one hundred and sixty-eight dollars ($25,168) of retirement allowance, such

12

amount to be indexed annually in the same percentage as determined under subsection (h)(l)(B)(I)

13

above.

14

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

15

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

16

and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary

17

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

18

retirement age, whichever is later.

19

     (2) Except as provided in subsection (h)(3), the benefit adjustments under subsection

20

(h)(l)(B) for any plan year shall be suspended in their entirety unless the Actuarial Funded Ratio

21

of the Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and

22

the State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate

23

basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for

24

all members for such plan year.

25

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

26

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

27

any current or future benefit adjustment provided under this section. "Actuarial Funded Ratio"

28

shall mean the ratio of the actuarial value of assets to the actuarial accrued liability.

29

     (3) Notwithstanding subsection (h)(2), in each fourth (4th) plan year commencing after

30

June 30, 2012 commencing with the plan year ending June 30, 2016, and subsequently at

31

intervals of four (4) plan years, a benefit adjustment shall be calculated and made in accordance

32

with subsection (h)(l)(B) above until the Actuarial Funded Ratio of the Employees' Retirement

33

System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police Retirement

34

Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty percent

 

LC004870 - Page 17 of 70

1

(80%).

2

     SECTION 8. Section 36-10.3-1 of the General Laws in Chapter 36-10.3 entitled "Defined

3

Contribution Retirement Plan" is hereby amended to read as follows:

4

     36-10.3-1. Definitions. -- As used in this chapter, the following terms, unless the context

5

requires a different interpretation, shall have the following meanings:

6

      (1) "Compensation" means compensation as defined in section 36-8-1(8).

7

      (2) "Employee" means an employee as defined in section §§ 36-8-1(9) and 45-21-2(7),

8

and a teacher as defined in § 16-16-1(12), effective July 1, 2012 2012; provided however,

9

effective July 1, 2014, "employee" shall not include any employee with twenty (20) or more years

10

of total service as of June 30, 2012 in the Employees Retirement System under chapters 8 through

11

10 of title 36 or chapter 16 of title 16 (ERS), or the Municipal Employees' Retirement System

12

under chapters 21 and 21.2 of title 45 (MERS).

13

      (3) "Employer" means the State of Rhode Island or the local municipality which employs

14

a member of the Employees Retirement System under chapters 8 through 10 of title 36 or chapter

15

16 of title 16 (ERS) or the Municipal Employees Retirement System under chapters 21 and 21.2

16

of title 45 (MERS).

17

      (4) "Plan" means the retirement plan established by this chapter.

18

      (5) A "public safety member" shall mean a member of MERS who is a municipal fire

19

fighter or a municipal policeman or policewoman as defined in section 45-21.2-2 who does not

20

participate in Social Security under the Federal Old Age, Survivors, and Disability income

21

program.

22

      (6) "Regular member" means: (i) An employee who is a member of ERS other than

23

correctional officers as defined in section 36-10-9.2; or (ii) A An employee who is a member of

24

MERS other than a public safety member.

25

      (7) The "retirement board" or "board" shall mean the retirement board of the Employees

26

Retirement System of Rhode Island as defined in Chapter 36-8. The retirement board shall be the

27

plan administrator and plan trustee and shall administer the plan in accordance with section 36-8-

28

4.1.

29

      (8) "State investment commission" or "commission" means the state investment

30

commission as defined in section 35-10-1.

31

      (9) "Supplemental employer" includes any employer that provides supplemental

32

contributions to the defined contribution retirement plan as provided in section 36-10.3-3.

33

      (10) "Supplemental member" is defined in section 36-10.3-3.

34

     SECTION 9. Section 36-10.3-5 of the General Laws in Chapter 36-10.3 entitled "Defined

 

LC004870 - Page 18 of 70

1

Contribution Retirement Plan" is hereby amended to read as follows:

2

     36-10.3-5. Employer contributions. -- (1) An employer shall contribute to each regular

3

member's individual account the following amounts:

4

     (i) For members with fewer than ten (10) years of total services as of June 30, 2012, an

5

amount equal to one percent (1%) of the member's compensation at the end of each payroll period

6

from July 1 to the following June 30. ;

7

     (ii) For members with ten (10) or more but fewer than fifteen (15) years of total service

8

as of June 30, 2012, an amount equal to one percent (1 %) of the member's compensation at the

9

end of each payroll period from July 1, 2012 through June 30, 2014, and effective July 1, 2014,

10

an amount equal to one and one-quarter percent (1.25%) of the member's compensation at the end

11

of each payroll period from July 1 to the following June 30; and

12

     (iii) For members with fifteen (15) or more but fewer than twenty (20) years of total

13

service as of June 30, 2012, an amount equal to one percent (1 %) of the member's compensation

14

at the end of each payroll period from July 1, 2012 through June 30, 2014, and effective July 1,

15

2014, an amount equal to one and one-half percent (1.5%) of the member's compensation at the

16

end of each payroll period from July 1 to the following June 30.

17

      (2) An employer shall contribute to the individual account of each public safety member,

18

not participating in Social Security under the Federal Old Age, Survivors and Disability Income

19

program, an amount equal to three percent (3%) of the member's compensation from July 1 to the

20

following June 30.

21

      (3) Contributions by supplemental employers shall be governed by section 36-10.3-6.

22

     SECTION 10. Chapter 36-10.3 of the General Laws entitled "Defined Contribution

23

Retirement Plan" is hereby amended by adding thereto the following section:

24

     36-10.3-13. Waiver of administrative fees. -- Any plan administration fees assessed to

25

members of the plan after July 1, 2014 shall be reimbursed by the state for any member whose

26

annual compensation is thirty-five thousand dollars ($35,000) or less, said dollar amount to be

27

indexed annually in the same percentage determined under § 36-10-35(h)(l)(B).

28

     SECTION 11. Section 16-16-12 of the General Laws in Chapter 16-16 entitled "Teachers'

29

Retirement [See Title 16 Chapter 97 - The Rhode Island Board of Education Act]" is hereby

30

amended to read as follows:

31

     16-16-12. Procedure for service retirement. -- Retirement of a member on a service

32

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

33

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

34

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

 

LC004870 - Page 19 of 70

1

was separated from service prior to filing the application, and further provided however, that if

2

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

3

date shall be the first day following the separation from service, and provided further that the

4

member on retirement date has attained the age of sixty (60) years and has completed at least ten

5

(10) years of contributory service on or before July 1, 2005, or regardless of age has completed

6

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

7

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

8

of September 30, 2009.

9

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

10

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

11

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

12

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

13

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

14

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

15

proportional formula shall work as follows:

16

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

17

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

18

sixty-two (62).

19

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

20

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

21

      (C) The fraction determined in (B) shall then be multiplied by the age difference in (1) to

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

determined according to the formula in section 16-16-13 is reduced actuarially for each month

 

LC004870 - Page 20 of 70

1

that the age of the member is less than sixty-five (65) years and who retire before October 1, 2009

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

sixty-two (62).

14

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

15

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

16

      (C) The fraction determined in (B) shall then be multiplied by the age difference

17

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

18

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

19

prior to July 1, 2012:

20

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

21

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

22

teacher's Social Security retirement age.

23

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

24

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

25

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

26

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

27

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

28

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

29

formula shall work as follows:

30

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

31

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

32

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

33

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

34

denominator;

 

LC004870 - Page 21 of 70

1

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

2

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

3

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

4

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

5

(c)(ii) above or subsection (d) below, may elect to retire provided that the retirement allowance

6

shall be reduced actuarially for each month that the age of the teacher is less than the eligible

7

retirement age under subdivisions (c)(i) or (c)(ii) above or subdivision (d) below in accordance

8

with the following table:

9

Year Preceding Retirement Cumulative Annual Reduction Cumulative Monthly Reduction

10

For Year 1 9% .75%

11

For Year 2 8% .667%

12

For Year 3 7% .583%

13

For Year 4 7% .583%

14

For Year 5 7% .583%.

15

      (iv) Notwithstanding any other provisions of this section § 16-16-12(c), a teacher who

16

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

17

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

18

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

19

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

20

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

21

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

22

     (d) Notwithstanding any other provisions of subsection (c) above, effective July l, 2014.

23

A teacher in active service as of June 30, 2012 shall be eligible to retire upon the earlier of: (A)

24

The attainment of at least age sixty-five (65) and the completion of at least thirty (30) years of

25

total service; or (B) The teacher's retirement eligibility date under subsections (c)(i) or (c)(ii)

26

above.

27

     (d)(e) Except as specifically provided in sections 36-10-9.1, 36-10-12 through 36-10-15,

28

and 45-21-19 through 45-21-22, no member shall be eligible for pension benefits under this

29

chapter unless

30

      (i) The member shall have been a contributing member of the employees' retirement

31

system for at least ten (10) years; or

32

      (ii) For teachers in active contributory service on or after July 1, 2012, the teacher shall

33

have been a contributing member of the employees' retirement system for at least five (5) years.

34

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

 

LC004870 - Page 22 of 70

1

provided that for teachers in active contributory service on or after July 1, 2012, a teacher who

2

has five (5) years of contributory service shall be vested.

3

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

4

shall be counted towards vesting.

5

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

6

section 45-21-8 shall be considered a contributing member for the purpose of chapter 21 of title

7

45 and this chapter.

8

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

9

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

10

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

11

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

12

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

13

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

14

purchases under sections 16-16-7.1, 36-5-3, 36-9-31, 36-10-10.4, and 45-21-53:

15

      (i) For service purchases for time periods prior to a teacher's initial date of hire, the

16

purchase must be made within three (3) years of the teacher's initial date of hire; and

17

      (ii) For service purchases for time periods for official periods of leave as authorized by

18

law, the purchase must be made within three (3) years of the time the official leave was

19

concluded by the teacher. Notwithstanding paragraphs (i) and (ii) above, service purchases from

20

time periods prior to June 30, 2012 may be made on or prior to June 30, 2015.

21

      (e)(f) No member of the teachers' retirement system shall be permitted to purchase

22

service credits for casual or seasonal employment, for employment as a temporary or emergency

23

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

24

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

25

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

26

shall not receive service credit in this retirement system for any year or portion of a year which

27

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

28

which the member is receiving a pension and/or any annual payment for life. This subsection

29

shall not apply to any payments received pursuant to the federal Social Security Act, 42 U.S.C.

30

section 301 et seq.

31

      (g)(h) A member who seeks to purchase or receive service credit in this retirement

32

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

33

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

34

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

 

LC004870 - Page 23 of 70

1

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

2

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

3

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

4

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

5

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

6

of service credit counted toward total service credit until the time the member cooperates with the

7

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

8

credit.

9

      (i)(j) A member who knowingly makes a false statement to the retirement board

10

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

11

to the return of his or her contributions without interest.

12

     SECTION 12. Section 16-16-13 of the General Laws in Chapter 16-16 entitled "Teachers'

13

Retirement [See Title 16 Chapter 97 - The Rhode Island Board of Education Act]" is hereby

14

amended to read as follows:

15

     16-16-13. Amount of service retirement allowance. -- (a) (1) (i) For teachers eligible

16

to retire on or before September 30, 2009, upon retirement from service under section 16-16-12 a

17

teacher whose membership commenced before July 1, 2005 and who has completed at least ten

18

(10) years of contributory service on or before July 1, 2005, shall, receive a retirement allowance

19

which shall be determined in accordance with schedule A for service prior to July 1, 2012.

20

SCHEDULE A

21

YEARS OF SERVICE PERCENTAGE ALLOWANCE

22

1st through 10th inclusive 1.7%

23

11th through 20th inclusive 1.9%

24

21st through 34th inclusive 3.0%

25

5th 2.0%

26

     (ii) For teachers eligible to retire on or after October 1, 2009 who were not eligible to

27

retire on or before September 30, 2009, upon retirement for service under section 16-16-12, a

28

teacher whose membership commenced before July 1, 2005 and who has completed at least ten

29

(10) years of contributory service on or before July 1, 2005 shall receive a retirement allowance

30

which shall be determined in accordance with schedule A above for service on before September

31

30, 2009, and shall be determined in accordance with schedule B in subsection (a)(2) below for

32

service on or after October 1, 2009 and prior to July 1, 2012: (2) Upon retirement from service

33

under section 16-16-12 a teacher whose membership commenced after July 1, 2005 or who has

34

not completed at least ten (10) years of contributory service as of July 1, 2005 shall receive a

 

LC004870 - Page 24 of 70

1

retirement allowance which shall be determined in accordance with Schedule B for service prior

2

to July 1, 2012.

3

SCHEDULE B

4

YEARS OF SERVICE PERCENTAGE ALLOWANCE

5

1st through 10th inclusive 1.60%

6

11th through 20th inclusive 1.80%

7

21st through 25th inclusive 2.0%

8

26th through 30th inclusive 2.25%

9

31st through 37th inclusive 2.50%

10

38th 2.25%

11

      (b) The retirement allowance of any teacher whose membership commenced before July

12

1, 2005 and who has completed at least ten (10) years of contributory service on or before July 1,

13

2005 shall be in an amount equal to the percentage allowance specified in subsection (a)(1) of his

14

or her average highest three (3) consecutive years of compensation multiplied by the number of

15

years of total service, but in no case to exceed eighty percent (80%) of the compensation, payable

16

at completion of thirty-five (35) years of service; provided, however, for teachers retiring on or

17

after October 1, 2009 who were not eligible to retire as of September 30, 2009 the calculation

18

shall be based on the average highest five (5) consecutive years of compensation. The retirement

19

allowance of any teacher whose membership commenced after July 1, 2005 or who has not

20

completed at least ten (10) years of contributory service as of July 1, 2005 shall be in an amount

21

equal to the percentage allowance specified in Schedule B of his or her average highest three (3)

22

consecutive years of compensation multiplied by the number of years of total service, but in no

23

case to exceed seventy-five percent (75%) of the compensation, payable at completion of thirty-

24

eight (38) years of service; provided, however, for teachers retiring on or after October 1, 2009

25

who were not eligible to retire as of September 30, 2009 the calculation shall be based on the

26

average highest five (5) consecutive years of compensation. Any teacher who has in excess of

27

thirty-five (35) years on or before June 2, 1985 shall not be entitled to any refund, and any teacher

28

with thirty-five (35) years or more on or after June 2, 1985 shall contribute from July 1, 1985

29

until his or her retirement.

30

     (c) For service prior to July 2012, the retirement allowance of a teacher shall be

31

determined in accordance with subsections (a)(1) and (a)(2) above. For service on and after July

32

1, 2012: (i) For teachers with fewer than twenty (20) years of total service as of June 30, 2012, a

33

teacher's retirement allowance shall be equal to one percent (1%) of the teacher's average

34

compensation multiplied by the teacher's years of total service on and after July 1, 2012. ; and (ii)

 

LC004870 - Page 25 of 70

1

For teachers with twenty (20) or more years of total service as of June 30, 2012, a teacher's

2

retirement allowance shall be equal to one percent (1%) of the teacher's average compensation

3

multiplied by the teacher's years of total service between July 1, 2012 and June 30, 2014, and two

4

percent (2%) of the teacher's average compensation multiplied by the teacher's years of total

5

service on and after July 1, 2014. For purposes of computing a teacher's total service under the

6

preceding sentence, service purchases shall be included in total service only with respect to those

7

service purchases approved prior to June 30, 2012 and those applications for service purchases

8

received by the retirement system on or before June 30. 2012. In no event shall a teacher's

9

retirement allowance exceed the maximum limitations set forth in subsection (b) above.

10

     SECTION 13. Section 16-16-22 of the General Laws in Chapter 16-16 entitled "Teachers'

11

Retirement [See Title 16 Chapter 97 - The Rhode Island Board of Education Act]" is hereby

12

amended to read as follows:

13

     16-16-22. Contributions to state system. -- (a) Prior to July 1, 2012, each teacher shall

14

contribute into the system nine and one-half percent (9.5%) of compensation as his or her share of

15

the cost of annuities, benefits, and allowances. Effective July 1, 2012, each teacher shall

16

contribute an amount equal to three and three quarters percent (3.75%) of his or her

17

compensation. Effective July 1, 2014, each teacher with twenty (20) or more years of total service

18

as of June 30, 2012 shall contribute an amount equal to eleven percent (11 %) of his or her

19

compensation. The employer contribution on behalf of teacher members of the system shall be in

20

an amount that will pay a rate percent of the compensation paid to the members, according to the

21

method of financing prescribed in the State Retirement Act in chapters 8 -- 10 and 10.3 of title 36.

22

This amount shall be paid forty percent (40%) by the state, and sixty percent (60%) by the city,

23

town, local educational agency, or any formalized commissioner approved cooperative service

24

arrangement by whom the teacher members are employed, with the exception of teachers who

25

work in federally funded projects and further with the exception of any supplemental

26

contributions by a local municipality employer under chapter 36-10.3 which supplemental

27

employer contributions shall be made wholly by the local municipality. Provided, however, that

28

the rate percent paid shall be rounded to the nearest hundredth of one percent (.01%).

29

      (b) The employer contribution on behalf of teacher members of the system who work in

30

fully or partially federally funded programs shall be prorated in accordance with the share of the

31

contribution paid from the funds of the federal, city, town, or local educational agency, or any

32

formalized commissioner approved cooperative service arrangement by whom the teacher

33

members are approved.

34

      (c) In case of the failure of any city, town, or local educational agency, or any formalized

 

LC004870 - Page 26 of 70

1

commissioner approved cooperative service arrangement to pay to the state retirement system the

2

amounts due from it under this section within the time prescribed, the general treasurer is

3

authorized to deduct the amount from any money due the city, town, or local educational agency

4

from the state.

5

      (d) The employer's contribution shared by the state shall be paid in the amounts

6

prescribed in this section for the city, town, or local educational agency and under the same

7

payment schedule. Notwithstanding any other provisions of this chapter, the city, town, or local

8

educational agency or any formalized commissioner approved cooperative service arrangement

9

shall remit to the general treasurer of the state the local employer's share of the teacher's

10

retirement payments on a monthly basis, payable by the fifteenth (15th) of the following month.

11

The amounts that would have been contributed shall be deposited by the state in a special fund

12

and not used for any purpose. The general treasurer, upon receipt of the local employer's share,

13

shall effect transfer of a matching amount of money from the state funds appropriated for this

14

purpose by the general assembly into the retirement fund.

15

      Upon reconciliation of the final amount owed to the retirement fund for the employer

16

share, the state shall ensure that any local education aid reduction assumed for the FY 2010

17

revised budget in excess of the actual savings is restored to the respective local entities.

18

      (e) This section is not subject to sections 45-13-7 through 45-13-10.

19

     SECTION 14. Section 16-16-40 of the General Laws in Chapter 16-16 entitled "Teachers'

20

Retirement [See Title 16 Chapter 97 - The Rhode Island Board of Education Act]" is hereby

21

amended to read as follows:

22

     16-16-40. Additional benefits payable to retired teachers. -- (a) All teachers and all

23

beneficiaries of teachers receiving any service retirement or ordinary or accidental disability

24

retirement allowance pursuant to the provisions of this chapter and chapter 17 of this title, on or

25

before December 31, 1967, shall receive a cost of living retirement adjustment equal to one and

26

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

27

year the retirement allowance has been in effect. For purposes of computation credit shall be

28

given for a full calendar year regardless of the effective date of the retirement allowance. This

29

cost of living retirement adjustment shall be added to the amount of the service retirement

30

allowance as of January 1, 1970, and payment shall begin as of July 1, 1970. An additional cost

31

of living retirement adjustment shall be added to the original retirement allowance equal to three

32

percent (3%) of the original retirement allowance on the first day of January, 1971, and each year

33

thereafter through December 31, 1980.

34

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

 

LC004870 - Page 27 of 70

1

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

2

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

3

retirement, receive a cost of living adjustment, in addition to his or her retirement allowance, an

4

amount equal to three percent (3%) of the original retirement allowance. In each succeeding year

5

thereafter, on the first day of January, the retirement allowance shall be increased an additional

6

three percent (3%) of the original retirement allowance, not compounded, to be continued through

7

December 31, 1980.

8

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

9

receiving any service retirement and all teachers and all beneficiaries of teachers who have

10

completed at least ten (10) years of contributory service on or before July 1, 2005, pursuant to the

11

provisions of this chapter, and for all teachers and beneficiaries of teachers who receive a

12

disability retirement allowance pursuant to sections 16-16-14 -- 16-16-17, the cost of living

13

adjustment shall be computed and paid at the rate of three percent (3%) of the original retirement

14

allowance or the retirement allowance as computed in accordance with section 16-16-40.1,

15

compounded annually from the year for which the cost of living adjustment was determined to be

16

payable by the retirement board pursuant to the provisions of subsection (a) or (b) of this section.

17

Such cost of living adjustments are available to teachers who retire before October 1, 2009 or are

18

eligible to retire as of September 30, 2009.

19

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

20

retroactive payment shall be made.

21

      (3) The retirement allowance of all teachers and all beneficiaries of teachers who have

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

decreased from the retirement allowance provided immediately before such adjustment.

32

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

33

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

34

adjustment described in subsection (3) above shall only apply to the first thirty-five thousand

 

LC004870 - Page 28 of 70

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States

9

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

10

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

11

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

12

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

13

      (e) This subsection shall be effective for the period July 1, 2012 through June 30, 2014.

14

     (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (e)(2)

15

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

16

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

17

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

18

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

19

"subtrahend") from the Five-Year Average Investment Return of the retirement system

20

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

21

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

22

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

23

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

24

amount to be indexed annually in the same percentage as determined under paragraph (e)(1)(A)

25

above. The "Five-Year Average Investment Return" shall mean the average of the investment

26

returns of the most recent five (5) plan years as determined by the retirement board. Subject to

27

paragraph (e)(2) below, the benefit adjustment provided by this paragraph shall commence upon

28

the third (3rd) anniversary of the date of retirement or the date on which the retiree reaches his or

29

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

30

the actuarially assumed rate of return for the system, either upward or downward, the subtrahend

31

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

32

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

33

any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

34

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

 

LC004870 - Page 29 of 70

1

State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

2

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

3

teachers for such plan year.

4

      In determining whether a funding level under this paragraph (e)(2) has been achieved,

5

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

6

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

7

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

8

      (3) Notwithstanding paragraph (e)(2), in each fifth plan year commencing after June 30,

9

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

10

plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (e)(l)

11

above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, the

12

Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by

13

the system's actuary on an aggregate basis, exceeds eighty percent (80%).

14

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

15

(e) of section 16-16-40 shall become effective July 1, 2012, and shall apply to any benefit

16

adjustments not granted on or prior to June 30, 2012.

17

     (f) This subsection shall become effective July l, 2014.

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

year under this section for adjustments on and after January l, 2015, and subject to subsection

28

(f)(2) below, shall be equal to (I) multiplied by (II):

29

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

30

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

31

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

32

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

33

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

34

(0%). The "Five-Year Average Investment Return" shall mean the average of the investment

 

LC004870 - Page 30 of 70

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

five thousand one hundred and sixty-eight dollars ($25,168) of retirement allowance, such

10

amount to be indexed annually in the same percentage as determined under subsection(f)(l)(B)(I)

11

of this section.

12

     The benefit adjustments provided by this subsection (f)(l)(B) of this section shall be

13

provided to all retirees entitled to receive a benefit adjustment as of June 30, 2012 under the law

14

then in effect, and for all other retirees the benefit adjustments shall commence upon the third

15

(3rd) anniversary of the date of retirement or the date on which the retiree reaches his or her

16

Social Security retirement age, whichever is later.

17

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

18

(f)(l)(B) for any plan year shall be suspended in their entirety unless the Actuarial Funded Ratio

19

of the Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust,

20

and the State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate

21

basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for

22

all teachers for such plan year.

23

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

24

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

25

current or future benefit adjustment provided under this section. "Actuarial Funded Ratio" shall

26

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

27

     (3) Notwithstanding subsection (f)(2). in each fourth (4th) plan year commencing after

28

June 30, 2012 commencing with the plan year ending June 30. 2016, and subsequently at

29

intervals of four (4) plan years, a benefit adjustment shall be calculated and made in accordance

30

with paragraph (f)(l)(B) above until the Actuarial Funded Ratio of the Employees' Retirement

31

System of Rhode Island, the Judicial Retirement Benefits Trust, and the State Police Retirement

32

Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty percent

33

(80%).

34

     SECTION 15. Section 45-21-2 of the General Laws in Chapter 45-21 entitled

 

LC004870 - Page 31 of 70

1

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

2

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

3

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

4

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

5

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

6

contribution reserve account.

7

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

8

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

9

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

10

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

11

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

12

adopted by the retirement board with regular interest.

13

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

14

other benefit as provided by this chapter.

15

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

16

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

17

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

18

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

19

contract;

20

      (ii) Neither partner was married to anyone else;

21

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

22

state of Rhode Island;

23

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

24

death; and

25

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

26

following:

27

      (A) Domestic partnership agreement or relationship contract;

28

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

29

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

30

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

31

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

32

retirement contract or life insurance.

33

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

34

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

 

LC004870 - Page 32 of 70

1

manner stated in section 45-21-4.

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

employee within the meaning of this chapter.

16

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

17

30, 2012 shall means the average annual compensation, pay, or salary of a member for services

18

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

19

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

20

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

21

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

22

within the total service when the final compensation was the highest.

23

     (b) For members who become eligible to retire on or after July 1, 2012, if more than one

24

half (1/2) of the member's total years of service consist of years of service during which the

25

member devoted less than thirty (30) business hours per week to the service of the municipality,

26

but the member's average compensation consists of three (3) or more years during which the

27

member devoted more than thirty (30) business hours per week to the service of a municipality,

28

such member's average compensation shall mean the average of the highest ten (10) consecutive

29

years of compensation within the total service when the average compensation was the highest. ;

30

provided, however, effective July l, 2014, if such member's average compensation as defined in

31

paragraph (a) above is equal to or less than thirty-five thousand dollars ($35,000), such amount to

32

be indexed annually in accordance with § 45-21-52(d)(l)(B), such member's average

33

compensation shall mean the greater of:

34

     (i) The average of the highest ten (10) consecutive years of compensation within the total

 

LC004870 - Page 33 of 70

1

service when the average compensation was the highest; or

2

     (ii) The member's average compensation as defined in paragraph (a) above. To protect a

3

member's accrued benefit on June 30, 2012 under § 45-21-2(8)(b), in no event shall a member's

4

average compensation be lower than his or her average compensation determined as of June 30,

5

2012.

6

     Notwithstanding the preceding provisions, in no event shall a member's final

7

compensation be lower than his or her final compensation determined as of June 30, 2012.

8

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

9

30 of the next succeeding year.

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

as provided in section 45-21-8.

25

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

26

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

27

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

28

retirement board has approved admission in the retirement system.

29

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

30

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

31

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

32

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

33

allowable as provided in section 45-21-15.

34

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

 

LC004870 - Page 34 of 70

1

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

2

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

3

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

4

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

5

monthly installments for life, unless otherwise specifically provided.

6

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

7

of title 36.

8

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

9

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

10

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

11

Island as defined in subdivision (7).

12

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

13

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

14

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

15

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

16

     SECTION 16. Section 45-21-16 of the General Laws in Chapter 45-21 entitled

17

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

18

     45-21-16. Retirement on service allowance. -- Retirement of a member on a service

19

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

20

      (1) (i) Any member who is eligible to retire on or before June 30, 2012, may retire upon

21

the member's written application to the retirement board as of the first day of the calendar month

22

in which the application was filed, provided the member was separated from service prior to the

23

application, and provided, further, that if separation from service occurs during the month in

24

which application is filed, the effective date is the first day following the separation from service,

25

provided that the member at the time so specified for the member's retirement has attained the

26

applicable minimum retirement age and has completed at least ten (10) years of total service or

27

who, regardless of age, completed thirty (30) years of total service, and notwithstanding that

28

during the period of notification the member has separated from service. The minimum ages for

29

service retirement (except for employees completing thirty (30) years of service) is fifty-eight

30

(58) years.

31

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

32

prior to July 1, 2012:

33

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

34

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

 

LC004870 - Page 35 of 70

1

member's Social Security retirement age.

2

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

3

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

4

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

5

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

6

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

7

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

8

formula shall work as follows:

9

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

10

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

11

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

12

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

13

denominator;

14

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

15

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

16

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

17

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

18

or (ii)(B) above or subdivision (iii) below, may elect to retire provided that the retirement

19

allowance shall be reduced actuarially for each month that the age of the member is less than the

20

eligible retirement age under subparagraphs (ii)(A) or (ii)(B) above or subdivision (iii) below in

21

accordance with the following table:

22

Year Preceding Retirement Cumulative Annual Reduction Cumulative Monthly Reduction

23

For Year 1 9% .75%

24

For Year 2 8% .667%

25

For Year 3 7% .583%

26

For Year 4 7% .583%

27

For Year 5 7% .583%.

28

     (iii) Notwithstanding any other provisions of subparagraph (ii) above, effective July 1,

29

2014, a member in active service as of June 30, 2012 shall be eligible to retire upon the earlier of

30

(I) The attainment of at least age sixty-five (65) and the completion of at least thirty (30) yeas of

31

total service; or (II) the member's retirement eligibility date under subparagraphs (ii)(A) or (ii)(B)

32

above.

33

      (D) Notwithstanding any other provisions of section 42-21-16(1)(ii), a member who has

34

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

 

LC004870 - Page 36 of 70

1

at his or her eligible retirement date as determined under paragraph (i) above provided that a

2

member making an election under this paragraph shall receive the member's retirement benefit

3

determined and calculated based on the member's service and average compensation as of June

4

30, 2012. This provision shall be interpreted and administered in a manner to protect a member's

5

accrued benefit on June 30, 2012.

6

      (2) Except as specifically provided in sections 45-21-19 -- 45-21-22, no member is

7

eligible for pension benefits under this chapter unless:

8

      (I) On or prior to June 30, 2012 the member has been a contributing member of the

9

employees' retirement system for at least ten (10) years; or

10

      (II) For members in active contributory service on or after July 1, 2012, the member

11

shall have been a contributing member of the employees' retirement system for at least five (5)

12

years.

13

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

14

16, 1991 is vested.

15

      (ii) Furthermore, any past service credits purchased in accordance with section 45-21-62

16

are counted towards vesting.

17

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

18

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

19

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

20

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

21

purchases made prior to the effective date of this provision. A member who has purchased more

22

than five (5) years of service credit maximum, before January 1, 1995, shall be permitted to apply

23

the purchases towards the member's service retirement. However, no further purchase will be

24

permitted. Repayment, in accordance with applicable law and regulation, of any contribution

25

previously withdrawn from the System is not deemed a purchase of service credit.

26

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

27

purchases under sections 16-16-7.1, 36-5-3, 36-9-31, 36-10-10.4, and 45-21-53:

28

      (I) For service purchases for time periods prior to a member's initial date of hire; the

29

purchase must be made within three (3) years of the member's initial date of hire; and

30

      (II) For service purchases for time periods for official periods of leave as authorized by

31

law, the purchase must be made within three (3) years of the time the official leave was

32

concluded by the member.

33

      Notwithstanding (I) and (II) above, service purchases from time periods prior to June 30,

34

2012 may be made on or prior to June 30, 2015.

 

LC004870 - Page 37 of 70

1

      (3) No member of the municipal employees' retirement system is permitted to purchase

2

service credits for casual, temporary, emergency or seasonal employment, for employment as a

3

page in the general assembly, or for employment at any state college or university while the

4

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

5

      (4) A member does not receive service credit in this retirement system for any year or

6

portion of a year, which counts as service credit in any other retirement system in which the

7

member is vested or from which the member is receiving a pension and/or any annual payment

8

for life. This subsection does not apply to any payments received pursuant to the Federal Social

9

Security Act or to payments from a military pension earned prior to participation in state or

10

municipal employment, or to military service credits earned prior to participation in state or

11

municipal employment.

12

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

13

has the affirmative duty to disclose to the retirement board whether or not he or she is a vested

14

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

15

annual payment for life. The retirement board has the right to investigate whether or not the

16

member has utilized the same time of service for credit in any other retirement system. The

17

member has an affirmative duty to cooperate with the retirement board including, by way of

18

illustration and not by way of limitation, the duty to furnish or have furnished to the retirement

19

board any relevant information which is protected by any privacy act.

20

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

21

service counted toward total service credit until a time that the member cooperates with the

22

retirement board and until a time that the retirement board determines the validity of the service

23

credit.

24

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

25

service time or credit is not entitled to a retirement allowance and is entitled only to the return of

26

his or her contributions without interest.

27

     SECTION 17. Section 45-21-17 of the General Laws in Chapter 45-21 entitled

28

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

29

     45-21-17. Service retirement allowance. -- (a) Upon retirement from service after

30

January 1, 1969, a member shall receive a retirement allowance which is a life annuity terminable

31

upon death of the annuitant and is an amount is equal to two percent (2%) of final compensation

32

multiplied by the number of years of total service, not to exceed thirty-seven and one-half (37

33

1/2) years for services on and prior to June 30, 2012. For service on and after July 1, 2012: (i) For

34

members with fewer than twenty (20) years of total service as of June 30, 2012, a member's

 

LC004870 - Page 38 of 70

1

retirement allowance shall be equal to one percent (1%) of the member's final compensation

2

multiplied by the member's years of total service on and after July 1, 2012. ; and (ii) For members

3

with twenty (20) or more years of total service as of June 30, 2012, a member's retirement

4

allowance shall be equal to one percent (1 %) of the member's average compensation multiplied

5

by the member's years of total service between July l, 2012 and June 30, 2014, and two percent

6

(2%) of the member's average compensation multiplied by the member's years of total service on

7

and after July 1, 2014. For purposes of computing a member's total service under the preceding

8

sentence, service purchases shall be included in total service only with respect to those service

9

purchases approved prior to June 30, 2012 and those applications for service purchases received

10

by the retirement system on or before June 30, 2012. In no event shall a member's retirement

11

allowance exceed seventy-five percent (75%) of the member's final compensation. Provided,

12

however, that every person elected prior to July 1, 2012 who has served as a part time elected

13

official of the city of Cranston for a period of ten (10) years, is entitled to receive, upon

14

retirement from that part time service, and not being otherwise regularly employed by the city of

15

Cranston in which that person has served, a service retirement allowance equivalent to fifty

16

percent (50%) of the salary received at the time of retirement by that part time elected official;

17

and, provided, further, that if that person retires after a period of service greater than ten (10)

18

years, the person is entitled to receive an additional service retirement allowance equivalent to

19

five percent (5%) of the salary received at the time of retirement for each whole year of service,

20

in excess of ten (10) years up to a maximum additional allowance equivalent to fifty percent

21

(50%) of the salary received.

22

      (b) This section also applies to any former part time elected official of the city of

23

Cranston who is presently receiving retirement benefits from the municipal retirement system.

24

      (c) Every person elected prior to July 1, 2012 who serves or has served at least four (4)

25

years as a part time elected official of the city of Cranston may include that person's years of

26

service as a member of the general assembly, and any other credits acquired while serving as a

27

legislator, when computing the person's period of service to the city of Cranston pursuant to the

28

provisions of this section.

29

     SECTION 18. Section 45-21-41 of the General Laws in Chapter 45-21 entitled

30

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

31

     45-21-41. Members' contributions -- Payroll deductions -- Certification to board. --

32

(a) Prior to July 1, 2012, each member shall contribute an amount equal to six percent (6%) of

33

salary or compensation earned and accruing to the member; provided, that contributions by any

34

member cease when the member has completed the maximum amount of service credit attainable.

 

LC004870 - Page 39 of 70

1

Special compensation for additional fees shall not be considered as compensation for contribution

2

purposes. Effective July 1, 2012, each member shall contribute an amount equal to one percent

3

(1%) of his or her compensation as his or her share of the cost. Effective July 1, 2014, each

4

member with twenty (20) or more years of total service as of June 30, 2012 shall contribute an

5

amount equal to eight and one-quarter percent (8.25%) of compensation.

6

      (b) Each municipality shall deduct the previously stated rate from the compensation of

7

each member on each and every payroll of the municipality, and the deduction made during the

8

entire time a member is in service subject to termination as stated in the foregoing paragraph.

9

      (c) The deductions provided for in this section shall be made notwithstanding that the

10

minimum compensation provided for by law for any member is reduced by the compensation.

11

Every member is deemed to consent and agree to the deductions made and provided for in this

12

section, and shall receipt for his or her full salary or compensation; and payment of salary or

13

compensation less those deductions are a full and complete discharge and acquittance of all

14

claims and demands for the services rendered by the person during the period covered by the

15

payment except as to the benefits provided under this chapter. Each participating municipality

16

shall certify to the retirement board the amounts deducted from the compensation of members.

17

Each of the amounts, when deducted, shall be credited to an individual account of the member

18

from whose compensation the deduction was made.

19

     SECTION 19. Section 45-21-52 of the General Laws in Chapter 45-21 entitled

20

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

21

     45-21-52. Automatic increase in service retirement allowance. -- (a) The local

22

legislative bodies of the cities and towns may extend to their respective employees automatic

23

adjustment increases in their service retirement allowances, by a resolution accepting any of the

24

plans described in this section:

25

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

26

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

27

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

28

and one-half percent (1 1/2%) per year of the original retirement allowance, not compounded, for

29

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

30

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

31

provision, and an additional one and one-half percent (1 1/2%) is added to the original retirement

32

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

33

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

34

year the plan is accepted and each succeeding year.

 

LC004870 - Page 40 of 70

1

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

2

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

3

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

4

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

5

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

6

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

7

of January.

8

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

9

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

10

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

11

three percent (3%) of the original retirement allowance.

12

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

13

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

14

      (c) This subsection shall be effective for the period July 1, 2012 through June 30, 2014.

15

     (1) Notwithstanding any other paragraphs of this section, and subject to paragraph (c)(2)

16

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

17

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

18

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

19

year under this section shall be equal to (A) multiplied by (B) where (A) is equal to the

20

percentage determined by subtracting five and one-half percent (5.5%) (the "subtrahend") from

21

the Five-Year Average Investment Return of the retirement system determined as of the last day

22

of the plan year preceding the calendar year in which the adjustment is granted, said percentage

23

not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) is equal to the

24

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

25

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

26

in the same percentage as determined under (c)(1)(A) above. The "Five-Year Average Investment

27

Return" shall mean the average of the investment returns of the most recent five (5) plan years as

28

determined by the retirement board. Subject to paragraph (c)(2) below, the benefit adjustment

29

provided by this paragraph shall commence upon the third (3rd) anniversary of the date of

30

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

31

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

32

21.2, the benefit adjustment provided by this paragraph shall commence on the later of the third

33

(3rd) anniversary of the date of retirement or the date on which the retiree reaches age fifty-five

34

(55). In the event the retirement board adjusts the actuarially assumed rate of return for the

 

LC004870 - Page 41 of 70

1

system, either upward or downward, the subtrahend shall be adjusted either upward or downward

2

in the same amount.

3

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

4

section for any plan year shall be suspended in their entirety for each municipal plan within the

5

municipal employees retirement system unless the municipal plan is determined to be funded at a

6

GASB Funded Ratio equal to or greater than eighty percent (80%) as of the end of the

7

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

8

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

9

reinstated for all members for such plan year.

10

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

11

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

12

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

13

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

14

      (3) Notwithstanding paragraph (c)(2), for each municipal plan that has a GASB Funded

15

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

16

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

17

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

18

with paragraph (c)(1) above until the municipal plan's GASB Funded Ratio exceeds eighty

19

percent (80%).

20

     (d) This subsection shall become effective July 1, 2014.

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

year under this section for adjustments on and after January 1, 2015, and subject to subsection

31

(d)(2) below, shall be equal to (I) multiplied by (II):

32

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

33

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

34

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

 

LC004870 - Page 42 of 70

1

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

2

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

3

(0%). The "Five-Year Average Investment Return" shall mean the average of the investment

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

less than zero percent (0%).

12

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

13

five thousand one hundred and sixty-eight dollars ($25,168) of retirement allowance, such

14

amount to be indexed annually in the same percentage as determined under subsection(d)(l)(B)(I)

15

above.

16

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

17

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

18

and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary

19

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

20

retirement age, whichever is later.

21

     (2) Except as provided in subsection (d)(3), the benefit adjustments under subsection

22

(d)(l)(B) for any plan year shall be suspended in their entirety for each municipal plan within the

23

municipal employees' retirement system unless the municipal plan is determined to be funded at

24

an Actuarial Funded Ratio equal to or greater than eighty percent (80%) as of the end of the

25

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

26

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

27

reinstated for all members for such plan year.

28

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

29

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

30

any current or future benefit adjustment provided under this section. "Actuarial Funded Ratio"

31

shall mean the ratio of the actuarial value of assets to the actuarial accrued liability.

32

     (3) Notwithstanding subsection (d)(2), in each fourth (4th) plan year commencing after

33

June 30, 2012 commencing with the plan year ending June 30, 2016, and subsequently at

34

intervals of four (4) plan years, a benefit adjustment shall be calculated and made in accordance

 

LC004870 - Page 43 of 70

1

with subsection (d)(l)(B) above until the municipal plan's Actuarial Funded Ratio exceeds eighty

2

percent (80%).

3

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

4

January 1 next succeeding the acceptance, contribute by means of salary deductions, pursuant to

5

section 45-21-41, one percent (1%) of the employee's compensation concurrently with and in

6

addition to contributions otherwise being made to the retirement system.

7

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

8

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

9

      (f)(g) The East Greenwich town council shall be allowed to accept Plan C of section 45-

10

21-52(a)(3) for all employees of the town of East Greenwich who either, pursuant to contract

11

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

12

and who shall all collectively be referred to as the "Municipal-COLA Group" and shall be

13

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

14

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

15

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

16

who retire on or after January 1, 2003.

17

     SECTION 20. Section 42-28-22 of the General Laws in Chapter 42-28 entitled "State

18

Police" is hereby amended to read as follows:

19

     42-28-22. Retirement of members. -- (a) Whenever any member of the state police

20

hired prior to July 1, 2007 has served for twenty (20) years, he or she may retire therefrom or he

21

or she may be retired by the superintendent with the approval of the governor, and in either event

22

a sum equal to one-half (1/2) of the whole salary for the position from which he or she retired

23

determined on the date he or she receives his or her first retirement payment shall be paid him or

24

her during life.

25

      (b) For purposes of this section, the term "whole salary" means:

26

      (1) For each member who retired prior to July 1, 1966, "whole salary" means the base

27

salary for the position from which he or she retired as the base salary for that position was

28

determined on July 31, 1972;

29

      (2) For each member who retired between July 1, 1966 and June 30, 1973, "whole

30

salary" means the base salary for the position from which he or she retired as the base salary,

31

implemented by the longevity increment, for that position was determined on July 31, 1972 or on

32

the date of his or her retirement, whichever is greater;

33

      (3) For each member who retired or who retires after July 1, 1973 "whole salary" means

34

the base salary, implemented by the longevity increment, holiday pay, and clothing allowance, for

 

LC004870 - Page 44 of 70

1

the position from which he or she retired or retires.

2

      (c) (1) Any member who retired prior to July 1, 1977 shall receive a benefits payment

3

adjustment equal to three percent (3%) of his or her original retirement, as determined in

4

subsection (b) of this section, in addition to his or her original retirement allowance. In each

5

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

6

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

7

to be continued until January 1, 1991. For the purposes of the computation, credit shall be given

8

for a full calendar year regardless of the effective date of the service retirement allowance. For

9

purposes of this subsection, the benefits payment adjustment shall be computed from January 1,

10

1971 or the date of retirement, whichever is later in time.

11

      (2) Any member of the state police who retires pursuant to the provisions of this chapter

12

on or after January 1, 1977, shall on the first day of January, next following the third anniversary

13

date of the retirement receive a benefits payment adjustment, in addition to his or her retirement

14

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

15

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

16

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

17

to be continued until January 1, 1991. For the purposes of the computation, credit shall be given

18

for a full calendar year regardless of the effective date of the service retirement allowance.

19

      (3) Any retired member of the state police who is receiving a benefit payment

20

adjustment pursuant to subdivisions (1) and (2) of this section shall beginning January 1, 1991

21

and ending June 30, 2012, receive a benefits payment adjustment equal to fifteen hundred dollars

22

($1,500).

23

      (d) The benefits payment adjustment as provided in this section shall apply to and be in

24

addition to the retirement benefits under the provisions of section 42-28-5, and to the injury and

25

death benefits under the provisions of section 42-28-21.

26

      (e) (1) Any member who retires after July 1, 1972 and is eligible to retire prior to July 1,

27

2012 and who has served beyond twenty (20) years shall be allowed an additional amount equal

28

to three percent (3%) for each completed year served after twenty (20) years, but in no event shall

29

the original retirement allowance exceed sixty-five percent (65%) of his or her whole salary as

30

defined in subsection (b) hereof or sixty-five percent (65%) of his or her salary as defined in

31

subsection (b) hereof in his or her twenty-fifth (25th) year whichever is less.

32

      (2) Each member who retired prior to July 1, 1975, shall be entitled to all retirement

33

benefits as set forth above or shall be paid benefits as set forth in subdivision (b)(1) with "whole

34

salary" meaning the base salary for the position from which he or she retired as the base salary for

 

LC004870 - Page 45 of 70

1

the position was determined on July 1, 1975, whichever is greater.

2

      (f) (1) Any member who retires, has served as a member for twenty (20) years or more,

3

and who served for a period of six (6) months or more of active duty in the armed service of the

4

United States or in the merchant marine service of the United States as defined in section 2 of

5

chapter 1721 of the Public Laws, 1946, may purchase credit for such service up to a maximum of

6

two (2) years; provided that any member who has served at least six (6) months or more in any

7

one year shall be allowed to purchase one year for such service and any member who has served a

8

fraction of less than six (6) months in his or her total service shall be allowed to purchase six (6)

9

months' credit for such service.

10

      (2) The cost to purchase these credits shall be ten percent (10%) of the member's first

11

year salary as a state policeman multiplied by the number of years and/or fraction thereof of such

12

armed service up to a maximum of two (2) years. The purchase price shall be paid into the

13

general fund. For members hired on or after July 1, 1989, the purchase price shall be paid into a

14

restricted revenue account entitled "state police retirement benefits" and shall be held in trust.

15

      (3) There will be no interest charge provided the member makes such purchase during

16

his or her twentieth (20th) year or within five (5) years from May 18, 1981, whichever is later,

17

but will be charged regular rate of interest as defined in section 36-8-1 as amended to date of

18

purchase from the date of his or her twentieth (20th) year of state service or five (5) years from

19

May 18, 1981, whichever is later.

20

      (4) Any member who is granted a leave of absence without pay for illness, injury or any

21

other reason may receive credit therefor by making the full actuarial cost as defined in

22

subdivision 36-8-1(10); provided the employee returns to state service for at least one year upon

23

completion of the leave.

24

      (5) In no event shall the original retirement allowance exceed sixty-five percent (65%) of

25

his or her whole salary as defined in subsection (b) hereof or sixty-five percent (65%) of his or

26

her salary as defined in subsection (b) hereof in his or her twenty-fifth (25th) year, whichever is

27

less.

28

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

29

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

30

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

31

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

32

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

33

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

34

system shall not be deemed a purchase of service credit.

 

LC004870 - Page 46 of 70

1

      (g) The provisions of this section shall not apply to civilian employees in the Rhode

2

Island state police; and, further, from and after April 28, 1937, chapters 8 -- 10, inclusive, of title

3

36 shall not be construed to apply to the members of the Rhode Island state police, except as

4

provided by sections 36-8-3, 36-10-1.1, 42-28-22.1, and 42-28-22.2, and section 36-8-1(5) and

5

(8)(a) effective July 1, 2012.

6

      (h) Any member of the state police other than the superintendent of state police, who is

7

hired prior to July 1, 2007 and who has served for twenty-five (25) years or who has attained the

8

age of sixty-two (62) years, whichever shall first occur, shall retire therefrom.

9

      (i) (1) Any member of the state police, other than the superintendent, who is hired on or

10

after July 1, 2007 and who has served for twenty-five (25) years, may retire therefrom or he or

11

she may be retired by the superintendent with the approval of the governor, and shall be entitled

12

to a retirement allowance of fifty percent (50%) of his or her "whole salary" as defined in

13

subsection (b) hereof.

14

      (2) Any member of the state police who is hired on or after July 1, 2007 may serve up to

15

a maximum of thirty (30) years, and shall be allowed an additional amount equal to three percent

16

(3.0%) for each completed year served after twenty-five (25) years, but in no event shall the

17

original retirement allowance exceed sixty-five percent (65%) of his or her "whole salary" as

18

defined in subsection (b) hereof.

19

      (j) Effective July 1, 2012, any other provision of this section notwithstanding:

20

      (j) (1) Any member of the state police, other than the superintendent of state police, who

21

is not eligible to retire on or prior to June 30, 2012 may retire at any time subsequent to the date

22

the member's retirement allowance equals or exceeds fifty percent (50%) of average

23

compensation as defined in section 36-8-1(5)(a), provided that a member shall retire upon the

24

first to occur of:

25

      (i) The date the member's retirement allowance equals sixty-five percent (65%); or

26

      (ii) The later of the attainment of age sixty-two (62) or completion of five (5) years of

27

service; provided however, any current member as of June 30, 2012 who has not accrued fifty

28

percent (50%) upon attaining the age of sixty-two (62) shall retire upon accruing fifty percent

29

(50%); and upon retirement a member shall receive a retirement allowance which shall equal:

30

      (A) For members hired prior to July 1, 2007 the sum of (i), (ii) and (iii) where

31

      (i) Is calculated as the member's years of total service before July 1, 2012 multiplied by

32

two and one half percent (2.5%) of average compensation for a member's first twenty (20) total

33

years,

34

      (ii) Is calculated as the member's years of total service before July 1, 2012 in excess of

 

LC004870 - Page 47 of 70

1

twenty (20) years not to exceed twenty-five (25) years multiplied by three percent (3%) of

2

average compensation, and

3

      (iii) Is the member's years of total service on or after July 1, 2012 multiplied by two

4

percent (2%) of average compensation as defined in section 36-8-1(5)(a).

5

      (B) For members hired on or after July 1, 2007, the member's retirement allowance shall

6

be calculated as the member's years of total contributory service multiplied by two percent (2%)

7

of average compensation.

8

      (C) Any member of the state police who is eligible to retire on or prior to June 30, 2012

9

shall retire with a retirement allowance calculated in accordance with paragraph (a) and (e) above

10

except that whole salary shall be defined as final compensation where compensation for purposes

11

of this section and section 42-28-22.1 includes base salary, longevity and holiday pay.

12

      (D) Notwithstanding the preceding provisions, in no event shall a member's final

13

compensation be lower than his or her final compensation determined as of June 30, 2012.

14

      (2) In no event shall a member's original retirement allowance under any provisions of

15

this section exceed sixty-five percent (65%) of his or her average compensation.

16

      (3) For each member who retires on or after July 1, 2012, except as provided in

17

paragraph (j)(1)(C) above, compensation and average compensation shall be defined in

18

accordance with section 36-8-1(5)(a) and (8), provided that for a member whose regular work

19

period exceeds one hundred forty-seven (147) hours over a twenty-four (24) day period at any

20

time during the four (4) year period immediately prior to his/her retirement that member shall

21

have up to four hundred (400) hours of his/her pay for regularly scheduled work earned during

22

this period shall be included as "compensation" and/or "average compensation" for purposes of

23

this section and section 42-28-22.1.

24

      (4) (i) This subdivision shall be effective for the period July 1, 2012 through June 30,

25

2014. Notwithstanding the prior paragraphs of this section, and subject to paragraph (4)(ii) below,

26

for all present and former members, active and retired members, and beneficiaries receiving any

27

retirement, disability or death allowance or benefit of any kind, whether for or on behalf of a non-

28

contributory member or contributory member, the annual benefit adjustment provided in any

29

calendar year under this section shall be equal to (A) multiplied by (B) where (A) is equal to the

30

percentage determined by subtracting five and one-half percent (5.5%) (the "subtrahend") from

31

the Five-Year Average Investment Return of the retirement system determined as of the last day

32

of the plan year preceding the calendar year in which the adjustment is granted, said percentage

33

not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) is equal to the

34

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

 

LC004870 - Page 48 of 70

1

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

2

in the same percentage as determined under (4)(i)(A) above. The "Five-Year Average Investment

3

Return" shall mean the average of the investment returns for the most recent five (5) plan years as

4

determined by the retirement board. Subject to paragraph (4)(ii) below, the benefit adjustment

5

provided by this paragraph shall commence upon the third (3rd) anniversary of the date of

6

retirement or the date on which the retiree reaches age fifty-five (55), whichever is later. In the

7

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

8

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

9

amount.

10

      (ii) Except as provided in paragraph (4)(iii), the benefit adjustments under this section

11

for any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

12

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

13

State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

14

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

15

members for such plan year.

16

      In determining whether a funding level under this paragraph (4)(ii) has been achieved,

17

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

18

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

19

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

20

      (iii) Notwithstanding paragraph (4)(ii), in each fifth plan year commencing after June 30,

21

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

22

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

23

(4)(i) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island,

24

the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated

25

by the system's actuary on an aggregate basis, exceeds eighty percent (80%).

26

      (iv) The provisions of this paragraph (j)(4) of section 42-28-22 shall become effective

27

July 1, 2012 and shall apply to any benefit adjustment not granted on or prior to June 30, 2012.

28

      (v) The cost-of-living adjustment as provided in this paragraph (j)(4) shall apply to and

29

be in addition to the retirement benefits under the provisions of section 42-28-5 and to the injury

30

and death benefits under the provisions of section 42-28-21.

31

     (5) This subdivision shall become effective July 1, 2014.

32

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

33

subdivision (5)(i)(A), a one-time benefit adjustment shall be provided to members and/or

34

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

 

LC004870 - Page 49 of 70

1

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

2

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

3

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

4

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

5

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

6

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

7

year under this section for adjustments on and after January 1, 2015, and subject to subdivision

8

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

9

     (I) Shall equal the sum of fifty percent (50%) of (1) plus fifty percent (50%) of (2) where:

10

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

11

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

12

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

13

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

14

(0%). The "Five-Year Average Investment Return" shall mean the average of the investment

15

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

16

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

17

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

18

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

19

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

20

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

21

     In no event shall the sum of (1) plus (2) exceed three and one-half percent (3.5%) or be

22

less than zero percent (0%).

23

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

24

five thousand one hundred and sixty-eight dollars ($25,168) of retirement allowance, such

25

amount to be indexed annually in the same percentage as determined under

26

subdivision(5)(i)(B)(I) above.

27

     The benefit adjustments provided by this subdivision (5)(i)(B) shall be provided to all

28

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

29

and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary

30

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

31

retirement age, whichever is later.

32

     (ii) Except as provided in paragraph (5)(iii), the benefit adjustments under subdivision

33

(5)(i)(B) for any plan year shall be suspended in their entirety unless the Actuarial Funded Ratio

34

of the Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and

 

LC004870 - Page 50 of 70

1

the State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate

2

basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for

3

all members for such plan year.

4

     In determining whether a funding level under this paragraph (5)(ii) has been achieved, the

5

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

6

current or future benefit adjustment provided under this section. "Actuarial Funded Ratio" shall

7

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

8

     (iii) Notwithstanding subdivision (5)(ii), in each fourth (4th) plan year commencing after

9

June 30, 2012 commencing with the plan year ending June 30, 2016, and subsequently at

10

intervals of four (4) plan years, a benefit adjustment shall be calculated and made in accordance

11

with subdivision (5)(i)(B) above until the Actuarial Funded Ratio of the Employees' Retirement

12

System of Rhode Island, the Judicial Retirement Benefits Trust, and the State Police Retirement

13

Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty percent

14

(80%).

15

      (5)(6) Any member with contributory service on or after July 1, 2012, who has

16

completed at least five (5) years of contributory service but who has not retired in accordance

17

with (j)(1) above, shall be eligible to retire upon the attainment of member's Security retirement

18

age as defined in 36-8-1(19).

19

      (6)(7) In no event shall a member's retirement allowance be less than the member's

20

retirement allowance calculated as of June 30, 2012 based on the member's years of total service

21

and whole salary as of June 30, 2012.

22

      (k) In calculating the retirement benefit for any member, the term base salary as used in

23

subdivision (b)(3) or average compensation as used in paragraph (j) shall not be affected by a

24

deferral of salary plan or a reduced salary plan implemented to avoid shutdowns or layoffs or to

25

effect cost savings. Basic salary shall remain for retirement calculation that which it would have

26

been but for the salary deferral or salary reduction due to a plan implemented to avoid shutdowns

27

or layoffs or to effect cost savings.

28

     SECTION 21. Section 8-3-15 of the General Laws in Chapter 8-3 entitled "Justices of

29

Supreme, Superior, and Family Courts" is hereby amended to read as follows:

30

     8-3-15. Cost of living allowance. -- (a) All justices of the supreme court, superior court,

31

family court, or district court, or their surviving spouses or domestic partners, who retire after

32

January 1, 1970 and who receive a retirement allowance pursuant to the provisions of this title

33

shall, on the first day of January next following the third anniversary date of retirement, receive a

34

cost-of-living retirement adjustment in addition to his or her retirement allowance in an amount

 

LC004870 - Page 51 of 70

1

equal to three percent (3%) of the original retirement allowance. In each succeeding year

2

thereafter during the month of January, the retirement allowance shall be increased an additional

3

three percent (3%) of the original allowance, not compounded, to be continued during the lifetime

4

of the justice or his or her surviving spouse or domestic partner. For the purpose of such

5

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

6

retirement allowance.

7

      (b) Any justice who retired prior to January 31, 1977 shall be deemed for the purpose of

8

this section to have retired on January 1, 1977.

9

      (c) For justices not eligible to retire as of September 30, 2009 and not eligible upon

10

passage of this article, and for their beneficiaries, the cost of living adjustment described in

11

subsection (3) above shall only apply to the first thirty-five thousand dollars ($35,000) of

12

retirement allowance, indexed annually, and shall commence upon the third (3rd) anniversary of

13

the date of retirement or when the retiree reaches age sixty-five (65), whichever is later. The

14

thirty- five thousand dollar ($35,000) limit shall increase annually by the percentage increase in

15

the Consumer Price Index for all Urban Consumer (CPI-U) as published by the United States

16

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

17

percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, of

18

retirement allowance shall be multiplied by the percentage of increase in the Consumer Price

19

Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor

20

Statistics determined as of September 30 of the prior calendar year or three percent (3%),

21

whichever is less, on the month following the anniversary date of each succeeding year. For

22

justices eligible to retire as of September 30, 2009 or eligible upon passage of this article, and for

23

their beneficiaries, the provisions of this subsection (c) shall not apply.

24

      (d) This subsection shall be effective for the period July 1, 2012 through June 30, 2014.

25

     (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (d)(2)

26

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

27

any retirement, disability or death allowance or benefit of any kind, whether provided for or on

28

behalf of justices engaged on or prior to December 31, 1989 as a non-contributory justice or

29

engaged after December 31, 1989 as a contributory justice, the annual benefit adjustment

30

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

31

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

32

"subtrahend") from the Five-Year Average Investment Return of the retirement system

33

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

34

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

 

LC004870 - Page 52 of 70

1

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

2

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

3

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

4

"Five-Year Average Investment Return" shall mean the average of the investment return of the

5

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

6

below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd)

7

anniversary of the date of retirement or the date on which the retiree reaches his or her Social

8

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

9

actuarially assumed rate of return for the system, either upward or downward, the subtrahend

10

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

11

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

12

any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

13

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

14

State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

15

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

16

justices for such plan year.

17

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

18

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

19

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

20

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

21

      (3) Notwithstanding paragraph (d)(2), in each fifth plan year commencing after June 30,

22

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

23

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

24

(d)(1) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode

25

Island, the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust,

26

calculated by the system's actuary on an aggregate basis, exceeds eighty percent (80%)

27

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

28

(d) of section 8-3-15 shall become effective July 1, 2012 and shall apply to any benefit

29

adjustment not granted on or prior to June 30, 2012.

30

     (e) This subsection shall become effective July 1, 2014.

31

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

32

subsection (e)(l)(A), a one-time benefit adjustment shall be provided to justices and/or

33

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

34

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

 

LC004870 - Page 53 of 70

1

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

2

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

3

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

4

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

5

allowance or benefit of any kind, whether provided for or on behalf of justices engaged on or

6

prior to December 31, 1989 as a non-contributory justice or engaged after December 31, 1989 as

7

a contributory justice, the annual benefit adjustment provided in any calendar year under this

8

section for adjustments on and after January l, 2015, and subject to paragraph (e)(2) below, shall

9

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

10

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

11

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

12

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

13

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

14

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

15

(0%). The "Five-Year Average Investment Return" shall mean the average of the investment

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

less than zero percent (0%).

24

     (II) Is equal to the lesser of either the justice's retirement allowance or the first twenty-

25

five thousand one hundred and sixty-eight dollars ($25,168) of retirement allowance, such

26

amount to be indexed annually in the same percentage as determined under subsection (e)(l)(B)(l)

27

above.

28

     The benefit adjustments provided by this subsection (e)(l)(B) shall be provided to all

29

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

30

and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary

31

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

32

retirement age, whichever is later.

33

     (2) Except as provided in subsection (e)(3) , the benefit adjustments under subsection

34

(e)(l)(B) for any plan year shall be suspended in their entirety unless the Actuarial Funded Ratio

 

LC004870 - Page 54 of 70

1

of the Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and

2

the State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate

3

basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for

4

all justices for such plan year.

5

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

6

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

7

current or future benefit adjustment provided under this section. "Actuarial Funded Ratio" shall

8

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

9

     (3) Notwithstanding subsection (e)(2), in each fourth (4th) plan year commencing after

10

June 30, 2012, commencing with the plan year ending June 30. 2016, and subsequently at

11

intervals of four (4) plan years, a benefit adjustment shall be calculated and made in accordance

12

with subsection (e)(l)(B) above until the Actuarial Funded Ratio of the Employees' Retirement

13

System of Rhode Island, the Judicial Retirement Benefits Trust, and the State Police Retirement

14

Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty percent

15

(80%).

16

     SECTION 22. Section 8-8.2-12 of the General Laws in Chapter 8-8.2 entitled "Traffic

17

tribunal" is hereby amended to read as follows:

18

     8-8.2-12. Additional benefits payable to retired judges and their surviving spouses

19

or domestic partners. -- (a) All judges of the administrative adjudication court and all judges of

20

the administrative adjudication court who have been reassigned to the traffic tribunal, or their

21

surviving spouses or domestic partners, who retire after January 1, 1970 and who receive a

22

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

23

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

24

addition to his or her retirement allowance in an amount equal to three percent (3%) of the

25

original retirement allowance. In each succeeding year thereafter during the month of January, the

26

retirement allowance shall be increased an additional three percent (3%) of the original

27

allowance, compounded annually from the year cost of living adjustment was first payable to be

28

continued during the lifetime of the judge or his or her surviving spouse or domestic partner. For

29

the purpose of such computation, credit shall be given for a full calendar year regardless of the

30

effective date of the retirement allowance.

31

      (b) Any judge who retired prior to January 31, 1980, shall be deemed for the purpose of

32

this section to have retired on January 1, 1980.

33

      (c) For judges not eligible to retire as of September 30, 2009 and not eligible upon

34

passage of this article, and for their beneficiaries, the cost of living adjustment described in

 

LC004870 - Page 55 of 70

1

subsection (a) above shall only apply to the first thirty-five thousand dollars ($35,000) of

2

retirement allowance, indexed annually, and shall commence upon the third (3rd) anniversary of

3

the date of retirement or when the retiree reaches age sixty-five (65), whichever is later. The

4

thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage increase in

5

the Consumer Price Index for all Urban Consumer (CPI-U) as published by the United States

6

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

7

percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, of

8

retirement allowance shall be multiplied by the percentage of increase in the Consumer Price

9

Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor

10

Statistics determined as of September 30 of the prior calendar year or three percent (3%),

11

whichever is less on the month following the anniversary date of each succeeding year. For

12

judges eligible to retire as of September 30, 2009 or eligible upon passage of this article, and for

13

their beneficiaries, the provisions of this subsection (c) shall not apply.

14

      (d) This subsection shall be effective for the period July 1, 2012 through June 30, 2014.

15

     (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (d)(2)

16

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

17

any retirement, disability or death allowance or benefit of any kind, whether provided for or on

18

behalf of justices engaged on or prior to December 31, 1989 as a non-contributory justice or

19

engaged after December 31, 1989 as a contributory justice, the annual benefit adjustment

20

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

21

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

22

"subtrahend") from the Five-Year Average Investment Return of the retirement system

23

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

24

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

25

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

26

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

27

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

28

"Five-Year Average Investment Return" shall mean the average of the investment return of the

29

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

30

below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd)

31

anniversary of the date of retirement or the date on which the retiree reaches his or her Social

32

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

33

actuarially assumed rate of return for the system, either upward or downward, the subtrahend

34

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

 

LC004870 - Page 56 of 70

1

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

2

any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the

3

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

4

State Police Retirements Benefits Trust, calculated by the system's actuary on an aggregate basis,

5

exceeds eighty percent (80%) in which even the benefit adjustment will be reinstated for all

6

justices for such plan year.

7

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

8

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

9

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

10

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

11

      (3) Notwithstanding paragraph (d)(2), in each fifth plan year commencing after June 30,

12

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

13

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

14

(d)(1) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode

15

Island, the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust,

16

calculated by the system's actuary on an aggregate basis, exceeds eighty percent (80%).

17

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

18

(d) of section 8-8.2-12 shall become effective July 1, 2012 and shall apply to any benefit

19

adjustment not granted on or prior to June 30, 2012.

20

     (e) This subsection shall become effective July 1, 2014.

21

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

22

subsection (e)(l)(A), a one-time benefit adjustment shall be provided to justices and/or

23

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

24

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

25

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

26

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

27

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

28

justices, active and retired justices. and beneficiaries receiving any retirement, disability or death

29

allowance or benefit of any kind, whether provided for or on behalf of justices engaged on or

30

prior to December 31, 1989 as a non-contributory justice or engaged after December 31, 1989 as

31

a contributory justice, the annual benefit adjustment provided in any calendar year under this

32

section for adjustments on and after January 1, 2015, and subject to subsection (e)(2) below, shall

33

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

34

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

 

LC004870 - Page 57 of 70

1

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

2

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

3

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

4

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

5

(0%). The "Five-Year Average Investment Return" shall mean the average of the investment

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

less than zero percent (0%).

14

     (II) Is equal to the lesser of either the justice's retirement allowance or the first twenty-

15

five thousand one hundred and sixty-eight dollars ($25,168) of retirement allowance, such

16

amount to be indexed annually in the same percentage as determined under subsection(e)(l)(B)(I)

17

above.

18

     The benefit adjustments provided by this subsection (e)(l)(B) shall be provided to all

19

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

20

and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary

21

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

22

retirement age, whichever is later.

23

     (2) Except as provided in subsection (e )(3), the benefit adjustments under subsection

24

(e)(l)(B) for any plan year shall be suspended in their entirety unless the Actuarial Funded Ratio

25

of the Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust,

26

and the State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate

27

basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for

28

all justices for such plan year.

29

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

30

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

31

any current or future benefit adjustment provided under this section. "Actuarial Funded Ratio"

32

shall mean the ratio of the actuarial value of assets to the actuarial accrued liability.

33

     (3) Notwithstanding subsection (e)(2), in each fourth (4th) plan year commencing after

34

June 30, 2012 commencing with the plan year ending June 30, 2016, and subsequently at

 

LC004870 - Page 58 of 70

1

intervals of four (4) plan years, a benefit adjustment shall be calculated and made in accordance

2

with subsection (e)(l)(B) above until the Actuarial Funded Ratio of the Employees' Retirement

3

System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police Retirement

4

Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty percent

5

(80%).

6

     SECTION 23. Section 28-30-18 of the General Laws in Chapter 28-30 entitled "Workers'

7

Compensation Court" is hereby amended to read as follows:

8

     28-30-18. Additional benefits payable to retired judges and their surviving spouses

9

or domestic partners. -- (a) All judges of the workers' compensation court, or their surviving

10

spouses or domestic partners, who retire after January 1, 1970 and who receive a retirement

11

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

12

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

13

addition to his or her retirement allowance in an amount equal to three percent (3%) of the

14

original retirement allowance. In each succeeding subsequent year during the month of January

15

the retirement allowance shall be increased an additional three percent (3%) of the original

16

allowance, compounded annually from the year the cost of living adjustment was first payable to

17

be continued during the lifetime of that judge or his or her surviving spouse or domestic partner.

18

For the purpose of that computation, credit shall be given for a full calendar year regardless of the

19

effective date of the retirement allowance.

20

      (b) Any judge who retired prior to January 31, 1980, shall be deemed for the purpose of

21

this section to have retired on January 1, 1980.

22

      (c) For judges not eligible to retire as of September 30, 2009 and not eligible upon

23

passage of this article, and for their beneficiaries, the cost of living adjustment described in

24

subsection (a) above shall only apply to the first thirty-five thousand dollars ($35,000) of

25

retirement allowance, indexed annually, and shall commence upon the third (3rd) anniversary of

26

the date of retirement or when the retiree reaches age sixty-five (65), whichever is later. The

27

thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage increase in

28

the Consumer Price Index for all Urban Consumer (CPI-U) as published by the United States

29

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

30

percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, of

31

retirement allowance shall be multiplied by the percentage of increase in the Consumer Price

32

Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor

33

Statistics determined as of September 30 of the prior calendar year or three percent (3%),

34

whichever is less on the month following the anniversary date of each succeeding year. For

 

LC004870 - Page 59 of 70

1

judges eligible to retire as of September 30, 2009 or eligible upon passage of this article, and for

2

their beneficiaries, the provisions of this subsection (c) shall not apply.

3

      (d) This subsection shall be effective for the period July 1, 2012 through June 30, 2014.

4

     (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (d)(2)

5

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

6

any retirement, disability or death allowance or benefit of any kind, whether provided for or on

7

behalf of justices engaged on or prior to December 31, 1989 as a non-contributory justice or

8

engaged after December 31, 1989 as a contributory justice, the annual benefit adjustment

9

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

10

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

11

"subtrahend") from the Five-Year Average Investment Return of the retirement system

12

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

13

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

14

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

15

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

16

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

17

"Five-Year Average Investment Return" shall mean the average of the investment return of the

18

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

19

below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd)

20

anniversary of the date of retirement or the date on which the retiree reaches his or her Social

21

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

22

actuarially assumed rate of return for the system, either upward or downward, the subtrahend

23

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

24

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

25

any plan year shall be suspended in their entirely unless the GASB Funded Ratio of the

26

Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the

27

State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis,

28

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

29

justices for such plan year.

30

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

31

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

32

any current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall

33

mean the ratio of the actuarial value of assets to the actuarial accrued liability.

34

      (3) Notwithstanding paragraph (d)(2), in each fifth plan year commencing after June 30,

 

LC004870 - Page 60 of 70

1

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

2

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

3

(d)(1) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode

4

Island, the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust,

5

calculated by the system's actuary on an aggregate basis, exceeds eighty percent (80%).

6

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

7

(d) of section 28-30-18 shall become effective July 1, 2012 and shall apply to any benefit

8

adjustment not granted on or prior to June 30, 2012.

9

     (e) This subsection shall become effective July 1, 2014.

10

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

11

subsection (e)(l)(A), a one-time benefit adjustment shall be provided to justices and/or

12

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

13

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

14

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

15

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

16

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

17

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

18

allowance or benefit of any kind, whether provided for or on behalf of justices engaged on or

19

prior to December 31, 1989 as a non-contributory justice or engaged after December 31, 1989 as

20

a contributory justice, the annual benefit adjustment provided in any calendar year under this

21

section for adjustments on and after January 1, 2015, and subject to subsection (e)(2) below, shall

22

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

23

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

24

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

25

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

26

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

27

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

28

(0%). The "Five-Year Average Investment Return" shall mean the average of the investment

29

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

30

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

31

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

32

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

33

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

34

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

 

LC004870 - Page 61 of 70

1

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

2

less than zero percent (0%).

3

     (II) Is equal to the lesser of either the justice's retirement allowance or the first twenty-

4

five thousand one hundred and sixty-eight dollars ($25,168) of retirement allowance, such

5

amount to be indexed annually in the same percentage as determined under subsection (e)(l)(B)(I)

6

above.

7

     The benefit adjustments provided by this subsection (e)(l)(B) shall be provided to all

8

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

9

and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary

10

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

11

retirement age, whichever is later.

12

     (2) Except as provided in paragraph (e)(3), the benefit adjustments under subsection

13

(e)(l)(B) for any plan year shall be suspended in their entirety unless the Actuarial Funded Ratio

14

of the Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust,

15

and the State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate

16

basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for

17

all justices for such plan year.

18

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

19

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

20

any current or future benefit adjustment provided under this section. "Actuarial Funded Ratio"

21

shall mean the ratio of the actuarial value of assets to the actuarial accrued liability.

22

     (3) Notwithstanding paragraph (e)(2), in each fourth (4th) plan year commencing after

23

June 30, 2012 commencing with the plan year ending June 30. 2016, and subsequently at

24

intervals of four (4) plan years, a benefit adjustment shall be calculated and made in accordance

25

with subsection (e)(l)(B) above until the Actuarial Funded Ratio of the Employees' Retirement

26

System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police Retirement

27

Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty percent

28

(80%).

29

     SECTION 24. Section 45-21.2-5 of the General Laws in Chapter 45-21.2 entitled

30

"Optional Retirement for Members of Police Force and Fire Fighters" is hereby amended to read

31

as follows:

32

     45-21.2-5. Retirement on service allowance. -- (a) Retirement of a member on a service

33

retirement allowance for members eligible to retire on or before June 30, 2012 shall be made,

34

subject to paragraph (a)(11) below, by the retirement board as follows:

 

LC004870 - Page 62 of 70

1

      (1) Any member who has attained or attains age seventy (70) shall be retired as stated in

2

section 45-21-16 subject to the discretions contained in that section; provided, that any member

3

who is a member of the Woonsocket fire department who has attained or attains an age of sixty-

4

five (65) years shall be retired. Retirement occurs on the first day of the next succeeding calendar

5

month in which the member has attained the age of sixty-five (65) years.

6

      (2) Any member may retire pursuant to this subdivision upon written application to the

7

board stating at what time the member desires to retire; provided, that the member at the specified

8

time for retirement has attained an age of fifty-five (55) years and has completed at least ten (10)

9

years of total service, and notwithstanding that the member may have separated from service.

10

      (3) Any member may retire pursuant to this subdivision upon written application to the

11

board stating at what time the member desires to retire; provided, that the member at the specified

12

time for retirement has completed at least twenty-five (25) years of total service, and

13

notwithstanding that the member may have separated from service.

14

      (4) Any member may retire pursuant to this subdivision upon written application to the

15

board stating at what time the member desires to retire; provided, that the member at the specified

16

time for retirement has attained an age of fifty (50) years and has completed at least twenty (20)

17

years of total service, notwithstanding that the member may have separated from service;

18

provided, that the service retirement allowance, as determined according to the formula provided

19

in section 45-21.2-6, is reduced one-half of one percent ( 1/2%) for each month that the age of the

20

member is less than fifty-five (55) years.

21

      (5) Any member of the South Kingstown police department may retire pursuant to this

22

subdivision upon written application to the board stating at what time the member desires to

23

retire; provided, that the member at the specified time for retirement has earned a service

24

retirement allowance of fifty percent (50%) of final compensation pursuant to section 45-21.2-

25

6.1.

26

      (6) Any member of the Johnston police department may retire pursuant to this

27

subdivision upon written application to the board stating at what time the member desires to

28

retire; provided, that the member at the specified time for retirement has earned a service

29

retirement allowance of fifty percent (50%) of final compensation pursuant to section 45-21.2-

30

6.2.

31

      (7) Any member of the Cranston fire department hired after July 1, 1995, or any member

32

of the Cranston fire department with five (5) years or less of service effective July 1, 1995, may

33

retire pursuant to this subdivision upon written application to the board stating at what time the

34

member desires to retire; provided, that the member at the specified time for retirement has

 

LC004870 - Page 63 of 70

1

earned a service retirement allowance of fifty percent (50%) of final compensation for at least

2

twenty (20) years service; final compensation for Cranston fire department members is based on

3

the compensation components of weekly salary, longevity and holidays with longevity of the

4

members highest year of earnings and members shall receive a three percent (3%) escalation of

5

their pension payment compounded each year on January 1st following the year of retirement and

6

continuing on an annual basis on that date; further, any illness or injury not covered in title 45 of

7

the general laws relating to the presumption of disability is governed by the collective bargaining

8

agreement between the City of Cranston and members of the Cranston fire department.

9

      (8) Any member of the Cranston police department hired after July 1, 1995, or any

10

member of the Cranston police department with five (5) years or less of service effective July 1,

11

1995, may retire pursuant to this subdivision upon written application to the board stating at what

12

time the member desires to retire; provided, that the member at the specified time for retirement

13

has earned a service retirement allowance of fifty percent (50%) of final compensation for at least

14

twenty (20) years service; final compensation for Cranston police department members is based

15

on the compensation components of weekly salary, longevity and holidays with longevity of the

16

members highest year of earnings and members shall receive a three percent (3%) escalation of

17

their pension payment compounded each year on January 1st following the year of retirement and

18

continuing on an annual basis on that date; further, any illness or injury not covered in title 45 of

19

the general laws relating to the presumption of disability is governed by the collective bargaining

20

agreement between the City of Cranston and members of the Cranston police department.

21

      (9) Any member of the Hopkinton police department may retire pursuant to this

22

subdivision upon written application to the board stating at what time the member desires to

23

retire; provided, that the member at the specified time for retirement has earned a service

24

retirement allowance of fifty percent (50%) of final compensation for at least twenty (20) years

25

service; final compensation for Hopkinton police department members is based on the

26

compensation components of weekly salary, longevity and holidays with longevity of the

27

members highest year of earnings and members shall receive a three percent (3%) escalation of

28

their pension payment compounded each year on January 1st following the year of retirement and

29

continuing on an annual basis on that date.

30

      (10) Any member of the Richmond police department may retire pursuant to this

31

subdivision upon written application to the board stating at what time the member desires to

32

retire; provided, that the member at the specified time for retirement has earned a service

33

retirement allowance of fifty percent (50%) of final compensation for at least twenty-two (22)

34

years' service pursuant to section 45-21.2-6.3.

 

LC004870 - Page 64 of 70

1

      (11) Notwithstanding any provision in this section to the contrary, for any service on or

2

after July 1, 2012, final compensation shall be defined in accordance with section 45-21.2-2, and

3

no benefit adjustments shall be provided except as set forth in subsection 45-21-52(c).

4

      (12) Notwithstanding any provisions of this section to the contrary, with respect to police

5

officers employed by the town of Johnston, only those police officers hired on or after July 1,

6

2010 shall be eligible to be members of the Municipal Employees' Retirement System of the state

7

of Rhode Island in accordance with this chapter.

8

      (b) Retirement of a member on a service retirement allowance eligible to retire on and

9

after July 1, 2012 shall be made by the retirement board as follows:

10

      (1) Any member may retire pursuant to this subdivision upon written application to the

11

board stating at what time the member desires to retire; provided, that:

12

     (A) the The member at the specified time for retirement attained the age of at least fifty-

13

five (55) years and has completed at least twenty-five (25) years of total service, and

14

notwithstanding that the member may have separated from service.

15

     (B) The member:

16

     (i) Was actively employed on or before June 30, 2012;

17

     (ii) Makes contributions to the plan effective July l, 2014 in accordance with § 45-21.2-

18

14; and

19

     (iii) The member at the specified time for retirement attained the age of at least fifty (50)

20

years and has completed at least twenty-five (25) years of total service, and notwithstanding that

21

the member may have separated from service.

22

      (2) Any member with contributory service on or after July 1, 2012, who has completed at

23

least five (5) years of contributory service but who has not completed twenty-five (25) years of

24

service, shall be eligible to retire upon the attainment of the member's Social Security retirement

25

age.

26

      (3) If a member had ten (10) or more years of contributory service and attained age

27

forty-five (45) prior to July 1, 2012 and would have been eligible to retire at or prior to age fifty-

28

two (52) in accordance with the rules in effect prior to July 1, 2012, the member may retire upon

29

attainment of age fifty-two (52).

30

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

31

attained an age within five (5) years of the eligible retirement age under subparagraphs (b)(1) or

32

(b)(2) above, may elect to retire provided that the retirement allowance shall be reduced

33

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

34

under subparagraphs (b)(1) or (b)(2) above in accordance with the following table:

 

LC004870 - Page 65 of 70

1

Year Preceding Retirement Cumulative Annual Reduction Cumulative Monthly Reduction

2

For Year 1 9% .75%

3

For Year 2 8% .667%

4

For Year 3 7% .583%

5

For Year 4 7% .583%

6

For Year 5 7% .583%.

7

      (5) Notwithstanding any other provisions of this section, a member on June 30, 2012,

8

may elect to retire at his or her eligible retirement date as determined under the rules in effect on

9

June 30, 2012 provided that a member making an election under this paragraph shall receive the

10

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

11

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

12

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

13

     SECTION 25. Section 45-21.2-6 of the General Laws in Chapter 45-21.2 entitled

14

"Optional Retirement for Members of Police Force and Fire Fighters" is hereby amended to read

15

as follows:

16

     45-21.2-6. Service retirement allowance. -- (a) Upon retirement from service pursuant

17

to section 45-21.2-5, a member receives a retirement allowance which is a life annuity terminable

18

at the death of the annuitant and shall be an amount equal to two percent (2%) of final

19

compensation multiplied by the years of total service, provided that a member that has attained

20

the age of at least fifty-seven (57) years and has completed at least thirty (30) years of total

21

service shall receive a retirement allowance which is a life annuity terminable at the death of the

22

annuitant and shall be an amount equal to two and one quarter percent (2.25%) of final

23

compensation multiplied by the years of total service, provided further that the life annuity under

24

this subsection (a) shall not but not to exceed seventy-five percent (75%) of final compensation.

25

      (b) Upon retirement, the member may elect to receive the actuarial equivalent of his or

26

her retirement allowance in a lesser retirement allowance as determined by actuarial calculation,

27

which is payable throughout life with the provision that:

28

      (1) Option 1. - A reduced retirement allowance payable during the member's life with the

29

provisions that after his or her death it shall continue during the life of and be paid to the person

30

that he or she nominated by written designation duly acknowledged and filed with the retirement

31

board at the time of retirement; or

32

      (2) Option 2. - A reduced retirement allowance payable during the member's life with the

33

provision that after his or her death an allowance equal to one-half ( 1/2) of his or her reduced

34

allowance shall continue during the life of and be paid to the person that he or she nominated by

 

LC004870 - Page 66 of 70

1

written designation duly acknowledged and filed with the board at the time of retirement.

2

      (c) If prior to July 1, 2012, a member elected an optional form of benefit other than a life

3

annuity in accordance with paragraph (b)(1) or (2) above, the member may elect to change his or

4

her form of benefit to a life annuity by filing an election with the retirement board on or before

5

June 30, 2013 provided that the member's beneficiary is still alive at the time the election is filed.

6

     SECTION 26. Section 45-21.2-14 of the General Laws in Chapter 45-21.2 entitled

7

"Optional Retirement for Members of Police Force and Fire Fighters" is hereby amended to read

8

as follows:

9

     45-21.2-14. Contributions. -- (a) Each member shall contribute an amount equal to

10

seven percent (7%) of the salary or compensation earned or accruing to the member, provided

11

that effective July 1, 2014 each member actively employed prior to July 1, 2012 shall contribute

12

an amount equal to nine percent (9%) of the salary or compensation earned or accruing to the

13

member. Special compensation or additional fees shall not be considered as compensation for

14

contribution purposes.

15

      (b) Deductions are made in accordance with section 45-21-14 and credited in accordance

16

with section 45-21-43.

17

      (c) Each municipality shall make contributions to the system to provide the remainder of

18

the obligation for retirement allowances, annuities, and other benefits provided in this section,

19

after applying the accumulated contribution of members, interest income on investments, and

20

other accrued income. The contribution shall be compiled in accordance with sections 45-21-42 --

21

45-21-44, except that contributions for the first five (5) years of the system shall likewise be

22

determined by the board.

23

      (d) Provided, that members of the South Kingstown police department, beginning July 1,

24

1985 and until June 30, 2012, contribute an amount equal to eight percent (8%) of salary or

25

compensation or additional fees are not considered as compensation for retirement purposes. For

26

service on and after July 1, 2012, a member of the South Kingstown police department shall make

27

contributions in accordance with paragraph (a) above.

28

      (e) Provided, further, that for service on or prior to June 30, 2012, members of the City

29

of Cranston fire department hired after July 1, 1995, beginning July 1, 1995, contribute an

30

amount equal to ten percent (10%) of their weekly salary; and those members of the City of

31

Cranston fire department with five (5) years or less of service effective July 1, 1995, have the

32

option to either remain in the City of Cranston pension plan to which they belonged prior to the

33

adoption of local ordinance by the Cranston city council as stated in section 45-21.2-22 or

34

contribute to the State of Rhode Island optional twenty (20) year retirement on service allowance

 

LC004870 - Page 67 of 70

1

an amount equal to ten percent (10%) of their weekly salary commencing July 1, 1995. The City

2

of Cranston may request and the retirement board may authorize additional members of the City

3

of Cranston fire department hired after July 1, 1987, the option to either remain in the City of

4

Cranston pension plan to which they belonged prior to the adoption of local ordinance by the

5

Cranston city council as stated in section 45-21.2-22 or contribute to the State of Rhode Island

6

optional twenty (20) year retirement on service allowance an amount equal to ten percent (10%)

7

of their weekly salary beginning on a date specified by the retirement board. For service on and

8

after July 1, 2012, a member of the City of Cranston fire department shall make contributions in

9

accordance with paragraph (a) above and a member's benefit shall be calculated in accordance

10

with subsection 45-21.2-22(b).

11

      (f) Further, provided, that for service on and prior to June 30, 2012, members of the City

12

of Cranston police department hired after July 1, 1995, beginning July 1, 1995, contribute an

13

amount equal to ten percent (10%) of their weekly salary; and those members of the City of

14

Cranston police department with five (5) years or less of service effective July 1, 1995, have the

15

option to either remain in the City of Cranston pension plan to which they belonged prior to the

16

adoption of local ordinance by the Cranston city council as stated in section 45-21.2-22 or

17

contribute to the State of Rhode Island optional twenty (20) year retirement on service allowance

18

an amount equal to ten percent (10%) of their weekly salary commencing July 1, 1995. The City

19

of Cranston may request and the retirement board may authorize additional members of the City

20

of Cranston police department hired after July 1, 1987, the option to either remain in the City of

21

Cranston pension plan to which they belonged prior to the adoption of local ordinance by the

22

Cranston city council as stated in section 45-21.2-22 or contribute to the State of Rhode Island

23

optional twenty (20) year retirement on service allowance an amount equal to ten percent (10%)

24

of their weekly salary beginning on a date specified by the retirement board. For service on and

25

after July 1, 2012, a member of the City of Cranston police department shall make contributions

26

in accordance with paragraph (a) above and a member's benefit shall be calculated in accordance

27

with subsection 45-21.2-22(b).

28

     SECTION 27. This Section 27 of this act shall take effect upon passage. The remainder

29

of this act shall take effect upon an affirmative vote by a majority of members from each union

30

that is a party to the state pension legislation litigation entitled "In re Pension cases, "P.C.C.A.

31

Numbers 12-3166, 12-3167, 12-3168, 12-3169, and 12-3579, and the case of "Rhode Island

32

council 94 et al. v. Chaffee et al., "C.A. No. 10-2859, which vote accepts the proposed

33

settlements of said litigation.

 

LC004870 - Page 68 of 70

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LC004870

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LC004870 - Page 69 of 70

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM--

CONTRIBUTION AND BENEFITS

***

1

     This act would enact and codify changes to the employees' retirement system, based upon

2

a settlement of litigation between the state and various public employees' unions.

3

     This Section 27 of this act would take effect upon passage. The remainder of this act

4

would take effect upon an affirmative vote by a majority of members from each union that is a

5

party to the state pension legislation litigation entitled "In re Pension cases, "P.C.C.A. Numbers

6

12-3166, 12-3167, 12-3168, 12-3169, and 12-3579, and the case of "Rhode Island council 94 et

7

al. v. Chaffee et al., "C.A. No. 10-2859, which vote accepts the proposed settlements of said

8

litigation..

========

LC004870

========

 

LC004870 - Page 70 of 70