2017 -- H 5746

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LC001287

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

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

CONTRIBUTIONS AND BENEFITS

     

     Introduced By: Representatives Handy, O`Grady, Marshall, Fogarty, and Carson

     Date Introduced: March 01, 2017

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 36-10-2 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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     36-10-2. State contributions.

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     (a) The State of Rhode Island shall make its contribution for the maintenance of the

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system, including the proper and timely payment of benefits in accordance with the provisions of

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this chapter and chapters 8, 16, 28, 31 and 42 of this title, by annually appropriating an amount

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equal to a percentage of the total compensation paid to the active membership. The percentage

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shall be computed by the actuary employed by the retirement system and shall be certified by the

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retirement board to the director of administration on or before the fifteenth day of October in each

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year. In arriving at the yearly employer contribution the actuary shall determine the value of:

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     (1) The contributions made by the members;

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     (2) Income on investments; and

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     (3) Other income of the system.

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

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

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

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2.1(b).

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

 

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

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

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

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

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retirement system:

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

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

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

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

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January 1, 1995; and

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

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

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

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

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

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1991); and

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

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

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

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subsection (c).

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

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

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

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

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carry out the provisions and intent of this subsection.

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

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

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year 2006, and each year thereafter:

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

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

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

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

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

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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

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

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

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

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

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

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

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

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

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bill and shall be paid by the general treasurer into the retirement system beginning FY2013.

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

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

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

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amortization in the next following actuarial valuation to be performed.

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

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

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(80%).

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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 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

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

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     This act would take effect upon passage.

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