ARTICLE 7 SUBSTITUTE A AS AMENDED

Relating To public officers and employees -- retirement system

SECTION 1. Sections 16-16-12, 16-16-13 and 16-16-40 of the General Laws in Chapter 16-16 entitled "Teachers' Retirement" are hereby amended to read as follows:

16-16-12. Procedure for service retirement. -- Retirement of a member on a service retirement allowance shall be made by the retirement board as follows:

(1) (a) Any member may retire upon his or her written application to the retirement board as of the first day of the calendar month in which the application was filed, provided the member was separated from service prior to filing the application, and further provided however, that if separation from service occurs during the month in which the application is filed, the effective date shall be the first day following the separation from service, and provided further that the member on retirement date has attained the age of sixty (60) years and has completed at least ten (10) years of total contributory service on or before July 1, 2005, or regardless of age has completed twenty-eight (28) years of total service and has completed at least ten (10) years of contributory service on or before July 1, 2005.

(b) Any member, who has not completed at least ten (10) years of contributory service on or before July 1, 2005, may retire upon his or her written application to the retirement board as of the first day of the calendar month in which the application was filed; provided, the member was separated from service prior thereto; and further provided, however, that if separation from service occurs during the month in which application is filed, the effective date shall be the first day following that separation from service; provided, the member on his or her retirement date had attained the age of fifty-nine (59) and had completed at least twenty-nine (29) years of total service; or provided, that the member on his or her retirement date had attained the age of sixty-five (65) and had completed at least ten (10) years of contributory service; or provided, that the member on his or her retirement date had attained the age of fifty-five (55) and had completed twenty (20) years of total service and provided, that the retirement allowance, as determined according to the formula in section 16-16-13 is reduced actuarially for each month that the age of the member is less than sixty-five (65) years.

(2) Any member also paying into the retirement system under the provisions of chapter 9 of title 36 shall not be disqualified from receiving benefits provided by that chapter and the provisions of this chapter simultaneously.

(3) (i) Except as specifically provided in sections 36-10-9.1, 36-10-12 through 36-10-15, and 45-21-19 through 45-21-22, no member shall be eligible for pension benefits under this chapter unless the member shall have been a contributing member of the employees' retirement system for at least ten (10) years.

(ii) Provided, however, a person who has ten (10) years service credit shall be vested.

(iii) Furthermore, any past service credits purchased in accordance with section 36-9-38 shall be counted towards vesting.

(iv) Any person who becomes a member of the employees' retirement system pursuant to section 45-21-8 shall be considered a contributing member for the purpose of chapter 21 of title 45 and this chapter.

(v) Notwithstanding any other provision of law, no more than five (5) years of service credit may be purchased by a member of the system. The five (5) year limit shall not apply to any purchases made prior to January 1, 1995. A member who has purchased more than five (5) years of service credit before January 1, 1995, shall be permitted to apply the purchases towards the member's service retirement. However, no further purchase will be permitted. Repayment, in accordance with applicable law and regulation, of any contribution previously withdrawn from the system shall not be deemed a purchase of service credit.

(4) No member of the teachers' retirement system shall be permitted to purchase service credits for casual or seasonal employment, for employment as a page in the general assembly, or for employment at any state college or university while the employee is a student or graduate of the college or university.

(5) Except as specifically provided in sections 16-16-6.2 and 16-16-6.4, a member shall not receive service credit in this retirement system for any year or portion of a year which counts as service credit in any other retirement system in which the member is vested or from which the member is receiving a pension and/or any annual payment for life. This subsection shall not apply to any payments received pursuant to the federal Social Security Act, 42 U.S.C. section 301 et seq.

(6) A member who seeks to purchase or receive service credit in this retirement system shall have the affirmative duty to disclose to the retirement board whether or not he or she is a vested member in any other retirement system and/or is receiving a pension, retirement allowance, or any annual payment for life. The retirement board shall have the right to investigate as to whether or not the member has utilized the same time of service for credit in any other retirement system. The member has an affirmative duty to cooperate with the retirement board including, by way of illustration and not by way of limitation, the duty to furnish or have furnished to the retirement board any relevant information that is protected by any privacy act.

(7) A member who fails to cooperate with the retirement board shall not have the time of service credit counted toward total service credit until the time the member cooperates with the retirement board and until the time the retirement board determines the validity of the service credit.

(8) A member who knowingly makes a false statement to the retirement board regarding service time or credit shall not be entitled to a retirement allowance and is entitled only to the return of his or her contributions without interest.

16-16-13. Amount of service retirement allowance. -- (a)(1) Upon retirement from service under section 16-16-12 the a teacher whose membership commenced before July 1, 2005 and who has completed at least ten (10) years of contributory service on or before July 1, 2005, shall, receive a retirement allowance which shall be determined in accordance with schedule A:

SCHEDULE A

YEARS OF SERVICE PERCENTAGE ALLOWANCE

1^st through 10^th inclusive 1.7%

11^th through 20^th inclusive 1.9%

21^st through 34^th inclusive 3.0%

35^th 2.0%

(2) Upon retirement from service under section 16-16-12 a teacher whose membership commenced after July 1, 2005 or who has not completed at least ten (10) years of contributory service as of July 1, 2005 shall receive a retirement allowance which shall be determined in accordance with Schedule B.

SCHEDULE B

YEARS OF SERVICE PERCENTAGE ALLOWANCE

1^st through 10^th inclusive 1.60%

11^th through 20^th inclusive 1.80%

21^st through 25^th inclusive 2.0%

26^th through 30th inclusive 2.25%

31^st through 37^th inclusive 2.50%

38th 2.25% (b) The retirement allowance of any teacher whose membership commenced before July 1, 2005 and who has completed at least ten (10) years of contributory service on or before July 1, 2005 shall be in an amount equal to the percentage allowance specified in schedule A of his or her average highest three (3) consecutive years of compensation multiplied by the number of years of total service, but in no case to exceed eighty percent (80%) of the compensation, payable at completion of thirty-five (35) years of service. The retirement allowance of any teacher whose membership commenced after July 1, 2005 or who has not completed at least ten (10) years of contributory service as of July 1, 2005 shall be in an amount equal to the percentage allowance specified in Schedule B of his or her average highest three (3) consecutive years of compensation multiplied by the number of years of total service, but in no case to exceed seventy-five percent (75%) of the compensation, payable at completion of thirty-eight (38) years of service. Any teacher who has in excess of thirty-five (35) years on or before June 2, 1985 shall not be entitled to any refund, and any teacher with thirty-five (35) years or more on or after June 2, 1985 shall contribute from July 1, 1985 until his or her retirement.

16-16-40. Additional benefits payable to retired teachers. -- (a) All teachers and all beneficiaries of teachers receiving any service retirement or ordinary disability retirement allowance pursuant to the provisions of this chapter and chapter 17 of this title, on or before December 31, 1967, shall receive a cost of living retirement adjustment equal to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, for each year the retirement allowance has been in effect. For purposes of computation credit shall be given for a full calendar year regardless of the effective date of the retirement allowance. This cost of living retirement adjustment shall be added to the amount of the service retirement allowance as of January 1, 1970, and payment shall begin as of July 1, 1970. An additional cost of living retirement adjustment shall be added to the original retirement allowance equal to three percent (3%) of the original retirement allowance on the first day of January, 1971, and each year thereafter through December 31, 1980.

(b) All teachers and beneficiaries of teachers receiving any service retirement or ordinary disability retirement allowance pursuant to the provisions of this title who retired on or after January 1, 1968, shall, on the first day of January, next following the third (3rd) year on retirement, receive a cost of living adjustment, in addition to his or her retirement allowance, an amount equal to three percent (3%) of the original retirement allowance. In each succeeding year thereafter, on the first day of January, the retirement allowance shall be increased an additional three percent (3%) of the original retirement allowance, not compounded, to be continued through December 31, 1980.

(c) (1) Beginning on January 1, 1981, for all teachers and beneficiaries of teachers receiving any service retirement and all teachers and all beneficiaries of teachers who have completed at least ten (10) years of contributory service on or before July 1, 2005, pursuant to the provisions of this chapter, and for all teachers and beneficiaries of teachers who receive a disability retirement allowance pursuant to sections 16-16-14 through 16-16-17, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of the original retirement allowance or the retirement allowance as computed in accordance with section 16-16-40.1, compounded annually from the year for which the cost of living adjustment was determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) of this section.

(2) The provisions of this subsection shall be deemed to apply prospectively only and no retroactive payment shall be made.

(3) The retirement allowance of all teachers and all beneficiaries of teachers who have not completed at least ten (10) years of contributory service on or before July 1, 2005, shall, on the month following the third anniversary date of the retirement, and on the month following the anniversary date of each succeeding year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor Statistics, determined as of September 30 of the prior calendar year, whichever is less; the cost of living adjustment shall be compounded annually from the year for which the cost of living adjustment was determined payable by the retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased from the retirement allowance provided immediately before such adjustment. This section shall not apply to all teachers and beneficiaries of teachers who receive a disability retirement allowance pursuant to sections 16-16-14 through 16-16-17.

(d) The provisions of sections 45-13-7 through 45-13-10 shall not apply to this section.

SECTION 2. Sections 36-10-2, 36-10-9, 36-10-10, 36-10-10.3, 36-10-11 and 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement System-Contributions and Benefits" are 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:

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

(ii) Amortize the unfunded liability of the system as of June 30, 1999 utilizing a time period not to exceed thirty (30) years.

(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) From the rate percent computed pursuant to subsection (b), the state shall contribute a sum equal to one eighth of one percent (0.125%) of each member's rate of compensation and an additional sum equal to one eighth of one percent (0.125%) of each member's rate of compensation effective July 1, 1990, as the state's share of the cost of providing retiree health benefits in accordance with the provisions of section 36-10-4. Contributions shall be actuarially adjusted to reflect refunds made to employees. The contribution shall be placed in a restricted fund and shall be used solely for providing health benefits to retirees as provided in section 36-12-4. The adequacy of the fund will be actuarially reevaluated during the fiscal year prior to July 1, 1993, to determine the required amount to maintain this benefit in effect. If at any time during the aforementioned period the cost for health coverage exceeds the contributions in the restricted fund account, the state shall assume the liability for that cost by making advances to the restricted fund which advances shall be repaid from any subsequent excess funds in the restricted fund.

(e) 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 as amended [26 U.S.C. section 401(a)] the restricted fund for providing health benefits to retirees described in subsection (d) shall constitute a separate retiree medical benefits account within the meaning of section 401(h) of the code [26 U.S.C. section 401(h)]and the account shall be administered in accordance with the applicable requirements. Prior to the satisfaction of all retiree health liabilities no part of the corpus or income of the account shall be used for, or diverted to, any purpose other than the payment of retiree medical benefits in accordance with the provisions of section 36-12-4. However, this requirement shall not restrict the collective investment of funds of that account with funds of the retirement account. Following the satisfaction of all retiree health liabilities, any funds remaining in the retiree medical benefits account shall be paid to the state.

(f) (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.

(g) 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:

(i) for each fiscal year in which the actuarially determined state contribution rate for state employees 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;

(ii) for each fiscal year in which the actuarially determined state contribution rate for teachers 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;

(iii) 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.

(h) 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.

36-10-9. Retirement on service allowance -- In general. -- Retirement of a member on a service retirement allowance shall be made by the retirement board as follows:

(1)(a) Any member may retire upon his or her written application to the retirement board as of the first day of the calendar month in which the application was filed; provided, the member was separated from service prior thereto; and further provided, however, that if separation from service occurs during the month in which application is filed, the effective date shall be the first day following that separation from service; and provided further that the member on his or her retirement date attained the age of sixty (60) and completed at least ten (10) years of total contributory service on or before July 1, 2005 or who, regardless of age, has completed twenty-eight (28) years of total service and has completed at least ten (10) years of contributory service on or before July 1, 2005.

(b) Any member, who has not completed at least ten (10) years of contributory service on or before July 1, 2005, may retire upon his or her written application to the retirement board as of the first day of the calendar month in which the application was filed; provided, the member was separated from service prior thereto; and further provided, however, that if separation from service occurs during the month in which application is filed, the effective date shall be the first day following that separation from service; provided, the member or his or her retirement date had attained the age of fifty-nine (59)_and had completed at least twenty-nine (29) years of total service or provided that the member on his or her retirement date had attained the age of sixty-five (65) and had completed at least ten (10) years of contributory service; or provided, that the member on his or her retirement date had attained the age of fifty-five (55) and had completed twenty (20) years of total service provided, that the retirement allowance, as determined according to the formula in section 36-10-10 is reduced actuarially for each month that the age of the member is less than sixty-five(65) years.

(2) Any faculty employee at a public institution of higher education under the jurisdiction of the board of governors for higher education shall not be involuntarily retired upon attaining the age of seventy (70) years.

(3)(i) Except as specifically provided in section 36-10-9.1, sections 36-10-12 -- 36-10-15, and sections 45-21-19 -- 45-21-22, no member shall be eligible for pension benefits under this chapter unless the member shall have been a contributing member of the employee's retirement system for at least ten (10) years.

(i) (ii) Provided, however, a person who has ten (10) years service credit on or before June 16, 1991, shall be vested.

(ii) (iii) Furthermore, any past service credits purchased in accordance with section 36-9-38 shall be counted towards vesting.

(iii) (iv) Any person who becomes a member of the employees' retirement system pursuant to section 45-21-4 shall be considered a contributing member for the purpose of chapter 21 of title 45 and this chapter.

(iv) (v) Notwithstanding any other provision of law, no more than five (5) years of service credit may be purchased by a member of the system. The five (5) year limit shall not apply to any purchases made prior to January 1, 1995. A member who has purchased more than five (5) years of service credits before January 1, 1995, shall be permitted to apply those purchases towards the member's service retirement. However, no further purchase will be permitted. Repayment in accordance with applicable law and regulation of any contribution previously withdrawn from the system shall not be deemed a purchase of service credit.

(4) No member of the employees' retirement system shall be permitted to purchase service credits for casual or seasonal employment, for employment as a page in the general assembly, or for employment at any state college or university while the employee is a student or graduate assistant of the college or university.

(5) Except as specifically provided in sections 16-16-6.2 and 16-16-6.4, a member shall not receive service credit in this retirement system for any year or portion of it, which counts as service credit in any other retirement system in which the member is vested or from which the member is receiving a pension and/or any annual payment for life. This subsection shall not apply to any payments received pursuant to the federal Social Security Act or to payments from a military pension earned prior to participation in state or municipal employment, or to military service credits earned prior to participation in state or municipal employment.

(6) A member who seeks to purchase or receive service credit in this retirement system shall have the affirmative duty to disclose to the retirement board whether or not he or she is a vested member in any other retirement system and/or is receiving a pension, retirement allowance, or any annual payment for life. The retirement board shall have the right to investigate as to whether or not the member has utilized the same time of service for credit in any other retirement system. The member has an affirmative duty to cooperate with the retirement board including, by way of illustration and not by way of limitations the duty to furnish or have furnished to the retirement board any relevant information which is protected by any privacy act.

(7) A member who fails to cooperate with the retirement board shall not have the time of service counted toward total service credit until such time as the member cooperates with the retirement board and until such time as the retirement board determines the validity of the service credit.

(8) A member who knowingly makes a false statement to the retirement board regarding service time or credit shall not be entitled to a retirement allowance and is entitled only to the return of his or her contributions without interest.

36-10-10. Amount of service retirement allowance. -- (a)(1) Upon retirement for service under section 36-10-9, a member whose membership commenced before July 1, 2005 and who has completed at least ten (10) years of contributory service on or before July 1, 2005 shall receive a retirement allowance which shall be determined in accordance with schedule A below:

Schedule A

Years of Service Percentage Allowance

1^st through 10^th inclusive 1.7%

11^th through 20^th inclusive 1.9%

21^st through 34^th inclusive 3.0%

35^th 2.0%

(2) Upon retirement for service under section 36-10-9, a member whose membership commenced after July 1, 2005, or who has not completed at least ten (10) years of contributory service as of July 1, 2005, shall, receive a retirement allowance which shall be determined in accordance with Schedule B below:

Schedule B

Years of Service Percentage Allowance

1^st through 10th inclusive 1.60%

11^th through 20^th inclusive 1.80%

21^st through 25 ^th inclusive 2.0%

26^th through 30^th inclusive 2,.25%

31^st through 37^th inclusive 2.50% 38^th 2.25%

(b) The retirement allowance of any member whose membership commenced before July 1, 2005 and who has completed at least ten (10) years of contributory service on or before July 1, 2005 shall be in an amount equal to the percentage allowance specified in schedule A of his or her average highest three (3) consecutive years of compensation multiplied by the number of years of total service, but in no case to exceed eighty percent (80%) of the compensation payable at completion of thirty-five (35) years of service. Any member who has in excess of thirty-five (35) years on or before June 2, 1985, shall not be entitled to any refund, and any member with thirty-five (35) years or more on or after June 2, 1985, shall contribute from July 1, 1985, until his or her retirement.

The retirement allowance of any member whose membership commenced after July 1, 2005 or who had not completed at least ten (10) years of contributory service as of July 1, 2005, shall, be in an amount equal to the percentage allowance specified in Schedule B of his or her average highest three (3) consecutive years of compensation multiplied by the number of years of total service, but in no case to exceed seventy-five percent (75%) of the compensation payable at the completion of thirty-eight (38) years of service.

(c) Any member with thirty-eight (38) years or more of service prior to December 31, 1985, shall not be required to make additional contributions. Contributions made between December 31, 1985, and July 1, 1987, by members with thirty-eight (38) or more years of service prior to December 31, 1985, shall be refunded by the retirement board to the persons, their heirs, administrators, or legal representatives.

36-10-10.3. Social security supplemental option. -- (a) In lieu of the lifetime service retirement allowance, a vested member who has completed at least ten (10) years of contributory service on or before July 1, 2005 who retires in accordance with sections 16-16-12, 36-10-9(a) 36-10-9 and 36-10-9.2 may choose an optional form of retirement benefit known as the social security supplemental option.

(b) This option provides for the payment of a larger benefit before the attainment of age sixty-two (62) and a reduced amount thereafter. The reduced amount shall be equal to the benefit before age sixty-two (62), including cost of living increases, minus the member's estimated social security benefit payable at age sixty-two (62). Under this option the benefits payable before and after the attainment of age sixty-two (62) will be actuarially determined to be equivalent to the lifetime service retirement allowance as determined in section 36-10-10.

(c) Election of this supplemental option shall be applicable only to those who elect the service retirement allowance determined in accordance with Schedule A as provided by section 36-10-10.

36-10-11. Service allowance to member withdrawing from service before retirement age. – (a) The right of a service retirement allowance under the provisions of this chapter shall vest in a member who shall withdraw from service prior to his or her attainment of the minimum age of retirement specified in sections 36-10-9 -- 36-10-9.3 who shall not have received a refund, provided the member shall have completed at least ten (10) years of total contributory service on or before July 1, 2005. The member shall become entitled to a service retirement allowance upon his or her attainment of the age of sixty (60) years or at his or her option at any date subsequent thereto. The rate of service retirement allowance payable in the case of any member shall be that provided in section 36-10-10, Schedule A, for the period of total service earned and accrued at the date of withdrawal from service of the member.

(b) For a member who shall not have completed at least ten (10) years of contributory service on or before July 1, 2005, the right of a service retirement allowance under the provisions of this chapter shall vest in a member who shall withdraw from service prior to his or her attainment of the minimum age of retirement specified in sections 36-10-9 through 36-10-9.3 who shall not have received a refund, provided, the member shall have completed at least ten (10) years of contributory service. The member shall become entitled to a service retirement allowance upon his or her attainment of the age of sixty-five (65) years or at his or her option at any date subsequent thereto. The rate of service retirement allowance payable in the case of any member shall be that provided in section 36-10-10, Schedule B, for the period of total service earned and accrued at the date of withdrawal from service of the member.

36-10-35. Additional benefits payable to retired employees. -- (a) All state employees and all beneficiaries of state employees receiving any service retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded, for each calendar year the retirement allowance has been in effect. For the purposes of computation, credit shall be given for a full calendar year regardless of the effective date of the retirement allowance. This cost of living adjustment shall be added to the amount of the retirement allowance as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the original retirement allowance in each succeeding year during the month of January, and provided further, that this additional cost of living increase shall be three percent (3%) for the year beginning January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the above provisions, no employee receiving any service retirement allowance pursuant to the provisions of this title on or before December 31, 1967, or the employee's beneficiary, shall receive any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over the service retirement allowance where the employee retired prior to January 1, 1958.

(b) All state employees and all beneficiaries of state employees retired on or after January 1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of this title shall, on the first day of January next following the third anniversary date of the retirement, receive a cost of living retirement adjustment, in addition to his or her retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. In each succeeding year thereafter through December 31, 1980, during the month of January, the retirement allowance shall be increased an additional three percent (3%) of the original retirement allowance, not compounded, to be continued during the lifetime of the employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar year regardless of the effective date of the service retirement allowance.

(c) (1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state employees receiving any service retirement and all state employees, and all beneficiaries of state employees, who have completed at least ten (10) years of contributory service on or before July 1, 2005 pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries of state employees who receive a disability retirement allowance pursuant to sections 36-10-12 through 36-10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of the original retirement allowance or the retirement allowance as computed in accordance with section 36-10-35.1, compounded annually from the year for which the cost of living adjustment was determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) of this section.

(2) The provisions of this subsection shall be deemed to apply prospectively only and no retroactive payment shall be made.

(3) The retirement allowance of all state employees and all beneficiaries of state employees who have not completed at least ten (10) years of contributory service on or before July 1, 2005, shall, on the month following the third anniversary date of retirement, and on the month following the anniversary date of each succeeding year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor Statistics determined as of September 30 of the prior calendar year, whichever is less; the cost of living adjustment shall be compounded annually from the year for which the cost of living adjustment was determined payable by the retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased from the retirement allowance provided immediately before such adjustment. This section shall not apply to all state employees and all beneficiaries of state employees, who receive a disability retirement allowance pursuant to sections 36-10-12 through 36-10-15.

(d)(1) All legislators and all beneficiaries of legislators who are receiving a retirement allowance pursuant to the provisions of section 36-10-9.1 for a period of three (3) or more years, shall, commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance. In each succeeding year thereafter during the month of January, the retirement allowance shall be increased an additional three percent (3%) of the original retirement allowance, compounded annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of computation, credit shall be given for a full calendar year regardless of the effective date of the service retirement allowance.

(e) The provisions of sections 45-13-7 -- 45-13-10 shall not apply to this section.

SECTION 3. Joint Legislative Oversight Commission on employee retirement benefits.

RESOLVED, That a special joint legislative oversight commission be and the same is hereby created consisting of eight (8) members; four (4) of whom shall be from the house of representatives, not more than three (3) from the same political party to be appointed by the speaker; four (4) of whom shall be from the senate, not more than three (3) from the same political party to be appointed by the senate President.

The purpose of said joint commission shall be to study employee retirement benefits, including, but not limited to, quasi-public agencies, the judiciary, Rhode Island state police, and the Rhode Island Department of Corrections.

The members of the commission shall meet at the call of speaker and the president and shall select from among its members co-chairpersons. Vacancies in said commission shall be filled in a like manner as the original appointment.

The membership of said commission shall receive no compensation for their services.

All departments and agencies of the state shall furnish such advice and information documentary and otherwise, to said commission and its agent as is deemed necessary or desirable by the commission to facilitate the purposes of this resolution.

The speaker of the house is hereby authorized and directed to provide suitable quarters for said commission.

SECTION 4. This article shall take effect upon passage.