2016 -- S 2353

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LC004319

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO TOWNS AND CITIES -- RETIREMENT SECURITY ACT FOR LOCALLY

ADMINISTERED PENSION FUNDS

     

     Introduced By: Senators McCaffrey, and Lombardi

     Date Introduced: February 10, 2016

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 45-65-4 and 45-65-6 of the General Laws in Chapter 45-65

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entitled "Retirement Security Act for Locally Administered Pension Funds" are hereby amended

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to read as follows:

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     45-65-4. Definitions. -- As used in this chapter the following terms shall have the

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following meanings:

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      (1) "Actuarial experience study" means a report provided by an actuary that includes a

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recent discussion of plan experience, recommendations for actuarial assumptions and methods,

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and information about the actuarial impact of these recommendations on the liabilities and other

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key actuarial measures. The report shall include a twenty (20) year amortization schedule of

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annual required contribution, actuarial accrued liability, unfunded actuarial accrued liability and

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plan funding percentage.

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      (2) "Annual actuarial valuation study" means a valuation of a locally administered plan

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completed by an actuary, and a certification based on that valuation indicating whether such plan

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is or is not in critical status, on an annual basis.

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      (3) "Critical status" means that, as determined by its actuary, as of the beginning of the

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plan year, a plan's funded percentage for such plan year is less than sixty percent (60%).

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      (4) "Locally administered plan" or "plan" means any defined benefit pension plan

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established by a municipality for its employees, other than: (a) A plan that is part of the

 

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Employees' Retirement System of Rhode Island as defined in chapter 36-8 or the Municipal

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Employees' Retirement System of Rhode Island as defined in chapter 45-21; or (b) A plan

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established by a municipality that has filed for bankruptcy protection pursuant to chapter 9 of title

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11 of the United States Code, a plan established by a municipality for which a receiver has been

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appointed pursuant to chapter 45-9 or a plan established by a municipality for which a fiscal

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overseer has been appointed pursuant to chapter 45-9.

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      (5) "Municipality" means any town or city in the State of Rhode Island, any city or town

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

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as established by chapter 14 of title 37.

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     45-65-6. Certification and notice requirements. -- (1) Every municipality that

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maintains a locally administered plan shall submit its initial annual actuarial valuation study to

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the study commission created herein under ยง 45-64-8 on or before April 1, 2012, and for each

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plan year ending on or after December 31, 2012, within six (6) months of completing such plan

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year. The initial actuarial experience study shall be submitted to the study commission on or

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before April 1, 2012, and .

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     (2) subsequent Subsequent actuarial experience studies must be submitted to the study

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commission completed by the municipality administering the plan no less frequently than once

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every three (3) years.

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      (2)(3) In any case in which an actuary certifies that a locally administered plan is in

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critical status for a plan year, the municipality administering such a plan shall, not later than thirty

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(30) business days following the certification, provide notification of the critical status to the

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participants and beneficiaries of the plan and to the general assembly, the governor, the general

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treasurer, the director of revenue, and the auditor general. The notification shall also be posted

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electronically on the general treasurer's website. Within one hundred eighty (180) days of sending

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the critical status notice, the municipality shall submit to the study commission general treasurer,

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the director of revenue, and the auditor general a reasonable alternative funding improvement

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plan to emerge from critical status.

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     (3) The state shall reimburse every municipality for fifty percent (50%) of the cost of

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undertaking its annual actuarial valuation study, which is due on April 1, 2012.

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      (4) Notwithstanding any other law to the contrary, the funding improvement plans and

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actuarial valuation studies submitted pursuant to this section shall be public records.

 

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     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 TOWNS AND CITIES -- RETIREMENT SECURITY ACT FOR LOCALLY

ADMINISTERED PENSION FUNDS

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     This act would require municipalities to include in their locally administered defined

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benefit pension plan triennial reports a twenty (20) year amortization schedule of annual required

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contributions, actuarial accrued liability, unfunded actuarial accrued liability, and plan funding

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percentage. The act would also require that in instances wherein an actuary certifies that a locally

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administered plan is in critical status for a plan year, the municipality must submit to the general

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treasurer, the director of revenue and auditor general within one hundred eighty (180) days from

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the date the notice is sent a reasonable alternative funding improvement plan to emerge from

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critical status.

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     This act would take effect upon passage.

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