2014 -- H 7885

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LC005082

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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 -

CONTRIBUTIONS AND BENEFITS

     Introduced By: Representatives Handy, Hull, Bennett, Tomasso, and Canario

     Date Introduced: March 06, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 36-10-2 of the General Laws in Chapter 36-10 entitled "Retirement

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

     36-10-2. State contributions. -- (a) The State of Rhode Island shall make its contribution

for the maintenance of the system, including the proper and timely payment of benefits in

accordance with the provisions of this chapter and chapters 8, 16, 28, 31 and 42 of this title, by

annually appropriating an amount equal to a percentage of the total compensation paid to the

active membership. The percentage shall be computed by the actuary employed by the retirement

system and shall be certified by the retirement board to the director of administration on or before

the fifteenth day of October in each year. In arriving at the yearly employer contribution the

actuary shall determine the value of:

      (1) The contributions made by the members;

      (2) Income on investments; and

      (3) Other income of the system.

      (b) The Actuary shall thereupon compute the yearly employer contribution that will:

      (1) Pay the actuarial estimate of the normal cost for the next succeeding fiscal year;

      (2) Amortize the unfunded liability of the system in accordance with section 36-10-

2.1(b).

      (c) The State of Rhode Island shall remit to the general treasurer the employer's share of

the contribution for state employees, state police, and judges on a payroll frequency basis, and for

teachers in a manner pursuant to section 16-16-22.

      (d) (1) In accordance with the intent of section 36-8-20 that the retirement system satisfy

the requirements of section 401(a) of the Internal Revenue Code of 1986, the state shall pay to the

retirement system:

      (i) By June 30, 1995, an amount equal to the sum of the benefits paid to state legislators

pursuant to section 36-10-10.1 in excess of ten thousand dollars ($10,000) per member (plus

accrued interest on such amount at eight percent (8%)) for all fiscal years beginning July 1, 1991,

and ending June 30, 1995, but this amount shall be paid only if section 36-10-10.1(e) becomes

effective January 1, 1995; and

      (ii) By December 31, 1994, twenty million seven hundred eighty eight thousand eight

hundred twelve dollars and nineteen cents ($20,788,812.19) plus accrued interest on that amount

at eight percent (8%) compounded monthly beginning March 1, 1991, and ending on the date this

payment is completed (reduced by amortized amounts already repaid to the retirement system

with respect to the amounts withdrawn by the state during the fiscal year July 1, 1990 -- June 30,

1991); and

      (iii) By June 30, 1995, the sum of the amounts paid by the retirement system for retiree

health benefits described in section 36-12-4 for all fiscal years beginning July 1, 1989, and ending

June 30, 1994, to the extent that the amounts were not paid from the restricted fund described in

subsection (c).

      (2) Any and all amounts paid to the retirement system under this subsection shall not

increase the amount otherwise payable to the system by the state of Rhode Island under

subsection (a) for the applicable fiscal year. The actuary shall make such adjustments in the

amortization bases and other accounts of the retirement system as he or she deems appropriate to

carry out the provisions and intent of this subsection.

      (e) In addition to the contributions provided for in subsection (a) through (c) and in order

to provide supplemental employer contributions to the retirement system, commencing in fiscal

year 2006, and each year thereafter:

      (1) Except for fiscal year 2009, fiscal year 2010 and fiscal year 2011, for each fiscal year

in which the actuarially determined state contribution rate for state employees, including state

contributions under chapter 36-10.3, is lower than that for the prior fiscal year, the governor shall

include an appropriation to that system equivalent to twenty percent (20%) of the rate reduction

for the state's contribution rate for state employees to be applied to the actuarial accrued liability

of the state employees' retirement system for state employees for each fiscal year;

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      (2) Except for fiscal year 2009, fiscal year 2010 and fiscal year 2011, for each fiscal year

in which the actuarially determined state contribution rate for teachers, including state

contributions under chapter 36-10.3, is lower than that for the prior fiscal year, the governor shall

include an appropriation to that system equivalent to twenty percent (20%) of the rate reduction

for the state's share of the contribution rate for teachers to be applied to the actuarial accrued

liability of the state employees' retirement system for teachers for each fiscal year;

      (3) The amounts to be appropriated shall be included in the annual appropriation bill and

shall be paid by the general treasurer into the retirement system.

      (4) Assessments pursuant to section 42-149-3.1 shall be included in the annual

appropriation bill and shall be paid by the general treasurer into the retirement system beginning

FY2013.

      (f) While the retirement system's actuary shall not adjust the computation of the annual

required contribution for the year in which supplemental contributions are received, such

contributions once made may be treated as reducing the actuarial liability remaining for

amortization in the next following actuarial valuation to be performed.

      (g) In no event shall the state contribution to the retirement system be a lesser amount

than that made the previous year until such time as the fund ratio meets or exceeds eighty percent

(80%).

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES - -RETIREMENT SYSTEM -

CONTRIBUTIONS AND BENEFITS

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     This act would require the yearly state contribution to the pension system not be reduced

until the fund ratio meets or exceeds eighty percent (80%).

     This act would take effect upon passage.

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