2023 -- S 0997

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LC002826

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM -

CONTRIBUTIONS AND BENEFITS

     Introduced By: Senators Ciccone, DiPalma, Lombardo, F. Lombardi, and Lawson

     Date Introduced: May 15, 2023

     Referred To: Senate 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; and

     (2) Amortize the unfunded liability of the system in accordance with § 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 on the

date contributions are withheld but no later than three (3) business days following the pay period

ending in which contributions were withheld, and for teachers in a manner pursuant to § 16-16-22.

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

requirements of § 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 § 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 § 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 § 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 subsections (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 10.3 of this title, 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 10.3 of this title, 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) For each fiscal year in which the vacancies for authorized and appropriated full-time

equivalent positions for state employees exceeds three (3%) percent, and those positions are

substituted with contract employees, the governor shall include an appropriation to that system

equivalent to the average annual employer contribution for each vacant position.

     (3)(4) 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)(5) Assessments pursuant to § 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, the

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

amortization in the next following actuarial valuation to be performed.

     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 provide that vacancies in excess of three percent (3%) for full-time

equivalent state employees which are substituted with contract employees shall require an

appropriation to the pension fund equal to the average annual employer contribution for each vacant

position.

     This act would take effect upon passage.

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