2019 -- H 6236

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LC002860

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TOWNS AND CITIES - RETIREMENT OF MUNICIPAL EMPLOYEES AND

CLOSED MUNICIPAL RETIREMENT PLANS

     

     Introduced By: Representatives Maldonado, and McLaughlin

     Date Introduced: June 20, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 45-21-8 and 45-21-16.2 of the General Laws in Chapter 45-21

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

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     45-21-8. Membership in system.

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     Membership in the retirement system does not begin before the effective date of

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participation in the system as provided in §§§ 45-21-4, 45-21.4-2 or 45-21.4-3 and consists of the

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following:

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     (a) Any employee of a participating municipality as defined in this chapter, who becomes

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an employee on and after the effective date of participation, shall, under contract of his or her

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employment, become a member of the retirement system; provided, that the employee is not

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receiving any pension or retirement allowance from any other pension or retirement system

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supported wholly or in part by a participating municipality, and is not a contributor to any other

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pension or retirement system of a participating municipality. Any employee who is elected to an

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office in the service of a municipality after the effective date and prior to July 1, 2012, has the

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option of becoming a member of the system, which option must be exercised within sixty (60)

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days following the date the employee assumes the duties of his or her office, otherwise that

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person is not entitled to participate under the provisions of this section;

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     (b) Any employee or elected official of a participating municipality in service prior to the

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effective date of participation, who is not a member of any other pension or retirement system

 

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supported wholly or in part by a participating municipality, and who does not notify the

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retirement board in writing before the expiration of sixty (60) days from the effective date of

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participation that he or she does not wish to join the system, shall automatically become a

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member; and

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     (c) Any employee of a participating municipality in service prior to the effective date of

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participation, who is a member of any other pension or retirement system supported wholly or in

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part by a participating municipality on the effective date of participation of their municipality,

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who then or thereafter makes written application to join this system, and waives and renounces all

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accrued rights and benefits of any other pension or retirement system supported wholly or in part

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by a participating municipality, becomes a member of this retirement system and shall not be

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required to make contribution under any other pension or retirement system of a participating

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municipality, anything to the contrary notwithstanding.

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     (d) Notwithstanding the provisions of this section, present firefighters employed by the

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town of Johnston shall establish a pension plan separate from the state of Rhode Island retirement

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system. If the town of Johnston is thirty (30) days or more late on employer or employee

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contributions to the pension plan, the auditor general is authorized to redirect any Johnston funds

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to cover the shortfall or to deduct that amount from any moneys due the town from the state for

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any purpose other than for education. Disability determinations of present firefighters shall be

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made by the state retirement board, subject to the provisions of § 45-21-19, at the town of

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Johnston's expense. All new firefighters hired by the town of Johnston shall become members of

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the state retirement system.

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     (e) Notwithstanding the provisions of this section, any city of Cranston employees who

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are presently members of Teamsters Local Union No. 251, hired between the dates of July 1,

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2005, and June 30, 2010, inclusive, and who are currently members of the retirement system

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established by this chapter may opt out of said retirement system and choose to enroll in a defined

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contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the city of Cranston.

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     (f) Notwithstanding the provisions of this section, any city of Cranston employees who

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are presently members of the Laborers International Union of North America Local 1322 hired

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between the dates of July 1, 2008, and June 30, 2013, inclusive, and who are currently members

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of the retirement system established by this chapter may opt out of said retirement system and

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choose to enroll in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof)

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established by the city of Cranston.

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     (g) Notwithstanding the provisions of this section, any city of Cranston employees who

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will be members of Teamsters Local Union No. 251, hired after June 30, 2010, shall be enrolled

 

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in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the city of

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Cranston and shall not be a member of the retirement system established by this chapter.

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     (h) Notwithstanding the provisions of this section, any city of Cranston employees who

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are presently members of the Laborers International Union of North America Local 1322 hired

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after April 23, 2013, shall be enrolled in a defined contribution plan (i.e., 403(b) plan or

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equivalent thereof) established by the city of Cranston and shall not be a member of the

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retirement system established by this chapter.

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     (i) Notwithstanding the provisions of this section, any city of Cranston employees

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defined in (e) and (f) of this section shall be precluded from purchase of service credit for time

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served on or after July 1, 2010, while participating in the defined contribution plan (i.e., a 403(b)

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plan or equivalent thereof) established by the city of Cranston should the member cease

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employment with the city of Cranston or Teamsters Local Union No. 251 and re-enter the system

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with another participating employer who has accepted the provisions as defined, in § 45-21-4.

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     (j) Notwithstanding the provisions of this section, any town of Middletown employees,

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who will be members of the Teamsters Local Union No. 251 bargaining unit, hired after June 30,

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2012, and any town of Middletown employees who are employed as full-time civilian

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dispatchers, hired after June 30, 2012, and any town of Middletown employees who are not

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affiliated with any recognized collective bargaining representative or union hired after June 30,

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2012, shall be enrolled in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof)

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established by the town of Middletown and shall not be members of the retirement system

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established by this chapter. Said town of Middletown employees defined herein shall be

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precluded from the purchase of service credit for time served on or after July 1, 2012, while

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participating in the defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established

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by the town of Middletown should the member cease employment with the town of Middletown

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or in the Teamsters Local Union No. 251 bargaining unit and re-enter the system with any

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participating employer who has accepted the provisions as defined in § 45-21-4.

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     (k) Notwithstanding the provisions of this section, any town of Middletown employees,

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who will be members of the Middletown Municipal Employees Association NEARI Local 869

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bargaining unit hired after June 30, 2012, shall be enrolled in a defined contribution plan (i.e., a

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403(b) plan or equivalent thereof) established by the town of Middletown and shall not be

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members of the retirement system established by this chapter. Said town of Middletown

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employees defined herein shall be precluded from the purchase of service credit for time served

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on or after July 1, 2012, while participating in the defined contribution plan (i.e., a 403(b) plan or

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equivalent thereof) established by the town of Middletown should the member cease employment

 

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with the town of Middletown or in the Middletown Municipal Employees Association NEARI

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Local 869 bargaining unit and re-enter the system with any participating employer who has

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accepted the provisions as defined in § 45-21-4.

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     (l) Notwithstanding the provisions of this section, any Cranston public school employees

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who will be members of National Association of Government Employees (NAGE), Local RI-153,

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hired after June 30, 2012, shall be enrolled in a defined contribution plan (i.e., a 401(a) plan or

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equivalent thereof) established by the Cranston school department and shall not be a member of

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the retirement system established by this chapter.

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     (m) Notwithstanding the provisions of this section, any Cranston public school

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employees defined in subsection (h) shall be precluded from the purchase of service credit for

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time served on or after July 1, 2012, while participating in the defined contribution plan (i.e., a

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401(a) plan or equivalent thereof) established by the Cranston public schools should the member

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cease employment with the Cranston public schools or National Association of Government

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Employees (NAGE), Local RI-153 and re-enter the system with another participating employer

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who has accepted the provisions as defined in § 45-21-4.

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     (n) Notwithstanding the provisions of this section, the chief of police for the city of

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Cranston who was hired on or about September 2014, shall be enrolled in a defined contribution

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plan (i.e., 401(a) plan or any equivalent thereof) established by the city of Cranston, and shall not

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be a member of the retirement system established by this chapter.

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     45-21-16.2. Electronic funds transfer.

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     All members of the municipal employees retirement system retiring under the provisions

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of this title on or after July 1, 1998, or joining the system pursuant to §45-21.4-2 or §45-21.4-3,

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are required to participate in electronic funds transfer and to supply the municipal employees

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retirement system with a bank routing number to effectuate a monthly transfer of benefits.

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     SECTION 2. Section 45-21.2-3 of the General Laws in Chapter 45-21.2 entitled

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"Optional Retirement for Members of Police Force and Fire Fighters" is hereby amended to read

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as follows:

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     45-21.2-3. Optional retirement for police and fire fighters.

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     In addition to the retirement system established under the provisions of chapter 21 of this

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title, any municipality may accept this chapter in the manner stated in § 45-21-4. Withdrawal

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from the system is in the same manner as stated in § 45-21-5 subject to the provisions of § 45-

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21.4-3.

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     SECTION 3. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby

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amended by adding thereto the following chapter:

 

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CHAPTER 21.4

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RELATING TO CENTRAL FALLS PENSION PLAN

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     45-21.4-1. Legislative findings.

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     The general assembly finds and declares the following:

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     (1) All Rhode Islanders deserve retirement security, including those who have spent their

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careers serving their communities as first responders and municipal employees; and

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     (2) The city of Central Falls has shown great resilience in emerging from bankruptcy and

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thriving economically and culturally against great odds; and

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     (3) The bankruptcy occurred in part because the pension plan in Central Falls had become

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severely underfunded, and as a result many first responders and retirees in the city of Central

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Falls experienced significant hardship in the form of benefit reductions; and

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     (4) The city of Central Falls, the labor organizations representing its first responders, and

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the state of Rhode Island are united in their desire to see the city of Central Falls remain on the

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path of fiscal health, and that the predictability and sustainability of the pension system is vital to

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maintaining fiscal health for the city of Central Falls and retirement security for its first

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responders and retirees.

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     (5) The general assembly adopts this act to facilitate the assistance of the municipal

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employees' retirement system of the state of Rhode Island in administering the local Central Falls

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pension plan

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     45-21.4-2. Alternative acceptance by the city of Central Falls of optional retirement

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for police and fire fighters.

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     (a) The provisions of this section shall apply only to locally administered plans within the

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city of Central Falls hereinafter referred collectively as the "Central Falls plan".

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     (b) On or after the effective date of this section, Central Falls may accept the provisions

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of this chapter, by resolution or an ordinance of its governing body stating the group or groups of

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employees to be included as provided in § 45-21-4; provided that, any and all labor organizations

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representing active employees of the municipality to be included have assented to such

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participation of their respective memberships, through a collective bargaining agreement and

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ratification of the decision by a majority vote of those members of any such labor organization

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present and voting. A copy of the resolution or ordinance and proof of assent from the applicable

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labor organization shall be immediately forwarded to the retirement board for review. A vote of

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the retirement board to accept the entry of the group or groups of employees in to the system shall

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be required.

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     (c) Effective August 31, 2019, the Central Falls plan shall be closed to new members.

 

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     (d) Members of the Central Falls plan in active service as of August 30, 2019 shall

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continue to be subject to the applicable retirement ages and restrictions, and accrue benefits on

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total service at the rates of the Central Falls plan pursuant to the collective bargaining agreements

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in effect on August 30, 2019 between Central Falls and the labor organizations representing

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members of the Central Falls plan.

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     (e) Disability determinations shall be made by the retirement board, subject to the

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procedures and standards of §§ 45-21.2-7 and 45-21.2-9 as applicable, for members hired prior to

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August 31, 2019. If a disability retirement pension is granted, the member shall receive benefits

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provided by the Central Falls pension plan pursuant to the collective bargaining agreements in

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effect on August 30, 2019.

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     (f) Beginning August 31, 2019 members of the Central Falls plan in active service shall

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contribute an amount equal to eleven and seven-tenths percent (11.7%) of the salary or

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compensation earned or accruing to the member.

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     (g) Subject to the provisions of subsection (b) of this section being met, new employees

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hired on or after August 31, 2019 shall be subject to all of the provisions of § 45-21.2, including

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all applicable disability provisions and benefits provided by §§ 36-10.3-4 and 45-21-52.

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     (h) Notwithstanding anything in § 45-21-42.2 to the contrary, the cost to evaluate Central

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Falls prospective membership in the retirement system pursuant to this section or § 45-21.4-3,

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shall be borne by the retirement board.

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     (i) Notwithstanding anything in § 45-21-43.1 to the contrary, determination of the

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employer contribution rate of the closed Central Falls pension plan pursuant to this section, shall

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be computed using an amortization period for the unfunded actuarial accrued liability as

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determined by the board, based upon the recommendation of the plan's actuary. Future actuarial

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gains and losses accruing within a plan year will be amortized over individual new twenty (20)

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year closed periods consistent with § 45-21-43.1(c).

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     (j) Notwithstanding anything in § 45-21-56 to the contrary, if a Central Falls pension plan

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pursuant to this section is in critical status as defined in § 45-65-4, and an employee of the

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Central Falls pension plan leaves employment and is hired by another participating municipality

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that is not in critical status as defined in § 45-65-4, then the retirement system shall transfer the

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amount of the member's total accrued liability with the Central Falls pension plan, multiplied by

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the funded status of the Central Falls pension plan, to the account of the current employing

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municipality.

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     (k) Upon the conditions of subsection (b) of this section being met, the city of Central

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Falls shall remain liable to the retirement system for the cost of funding a retirement system for

 

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its employees who are members of the system as provided herein, and the retirement board

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maintains the right to enforce payment of any liability as provided in chapter 21 of this title.

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     (l) Subject to the provisions of subsection (b) of this section being met, the Central Falls

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plan and the provisions of this section shall be administered in the same manner provided in

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chapter 21 of this title; credits for prior service and collection of contributions are determined

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through reference to that chapter; provided, that where the provisions of that chapter conflict with

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this chapter, then the provisions of this chapter control. Liability of contributions is enforced in

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the same manner as stated in chapter 21 of this title.

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     45-21.4-3. Retiree participation in optional requirement plan.

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     (a) The provisions of this section shall apply only to locally administered plans within the

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city of Central Falls.

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     (b) Notwithstanding any provision of this chapter to the contrary, on or before August 31,

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2019, Central Falls may accept the provisions of this chapter by an ordinance of its governing

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body stating the group or groups of retired former employees to be included as provided in § 45-

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21-4; provided that, a majority of retired former employees have consented in writing to joining

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the system or any duly constituted retiree organization that represents said retired former

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employees has assented to joining the system. A copy of the ordinance shall be immediately

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forwarded to the retirement board for review. A vote of the retirement board to accept the entry of

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the group or groups of employees in to the system shall be required.

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     For purposes of this section, "retired former employees" means any Central Falls police

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officer or fire fighter who has retired prior to August 31, 2019, pursuant to the provisions of the

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Central Falls' retirement plan.

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     (c) Notwithstanding any other provisions of this section or other applicable law, upon

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acceptance into the system, all "Central Falls retirees," as defined in § 45-21-67(a)(2), and their

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beneficiaries, and also all other former retired employees and their beneficiaries who are entitled

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to benefits under the "settlement agreement" that is identified in § 45-21-67(a)(3), shall retain all

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of the benefits accrued and calculated to them as provided in accordance with such settlement

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agreement (and, for clarification, irrespective of and notwithstanding any possible expiration of

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any "term" in respect to certain provisions of such agreement), including disability and post-

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retirement benefits, and their entitlement to all payments provided under § 45-21-67, and none of

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the foregoing shall be made unavailable or conditioned, nor be diminished or reduced, by virtue

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of entry into the system. The retired former employee, including any "Central Falls retiree", shall

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not be entitled to any retirement allowance or benefit from the system otherwise available or

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calculated pursuant to the provisions of §§ 45-21.2-6, 45-21.2-13, or 45-21.2-20, 45-21.2-21, or

 

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45-21.2-22.

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     (d) Withdrawal of a plan consisting solely of retired former Central Falls police officers

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or fire fighters, that had joined the retirement system pursuant to this section, shall be as provided

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in § 45-21-5.

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     (e) The cost to evaluate Central Falls' prospective membership in the retirement system,

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and costs related to obtaining consent of retirees to join the system pursuant to this section shall

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be borne by the retirement board.

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     (f) Upon the conditions of subsection (b) of this section being met, the city of Central

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Falls shall remain liable to the retirement system for the cost of funding a retirement system for

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its employees who are members of the system and the retirement board maintains the right to

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enforce payment of any liability as provided in chapter 21 of this title.

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     (g) Subject to the provisions of subsection (b) of this section being met, the provisions of

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this section shall be administered in the same manner provided in chapter 21 of this title;

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provided, that where the provisions of that chapter conflict with this chapter, then the provisions

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of this chapter control. Liability of the municipality is enforced in the same manner as stated in

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chapter 21 of this title.

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     45-21.4-4. Transfer of assets.

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     (a) Subject to the provisions of §§ 45-21.4-2(b) and 45-21.4-3(b) being met, on

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December 31, 2019, the system shall be responsible for administering the Central Falls plan,

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including the administration of any supplemental payments as provided in § 45-21-67, and

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Central Falls shall transfer to the system the accumulated contributions of each member entering

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the system and any other assets of the Central Falls plan.

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     (b) Beginning January 1, 2020, all appropriations made pursuant to § 45-21-67 shall be

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appropriated to the system and disbursed by the system in accordance with § 45-21-67.

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     SECTION 4. 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 OF MUNICIPAL EMPLOYEES AND

CLOSED MUNICIPAL RETIREMENT PLANS

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     This act would facilitate the locally administered Central Falls retirement plans joining

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the municipal employees retirement system of the state, by providing greater flexibility in funding

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policies than would otherwise be required, depending upon the needs and circumstances of the

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community.

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     This act would take effect upon passage.

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