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| ARTICLE 16 AS AMENDED |
| ARTICLE _______ |
| AN ACT RELATING TO CENTRAL FALLS RETIREES' BENEFICIARIES |
| SECTION 1. Section 45-21-67 of the General Laws in Chapter 45-21 entitled "Retirement |
| of Municipal Employees" is hereby amended to read as follows: |
| 45-21-67. Central Falls retirees -- Settlement agreement. |
| (a) Definitions. As used in this section: |
| (1) "Base pension benefit" is the amount listed on Appendix A, Appendix D-A, and |
| Appendix E-A, attached to the settlement agreement, under the column labeled "amount prior to |
| reduction", which is the amount each Central Falls retiree was receiving as of July 31, 2011. |
| (2) "Central Falls retirees" are the retirees, or the beneficiaries of retirees, of the city of |
| Central Falls, listed on Appendix A to the settlement agreement, as amended from time to time, |
| when a retiree or beneficiary dies. |
| (3) "Settlement agreement" shall mean that settlement and release agreement, as set forth |
| in P.L. 2012, Ch. 241, Art. 22, signed by and between the receiver of the city of Central Falls, the |
| director of revenue and the participating retirees, approved by the bankruptcy court by order dated |
| January 9, 2012. |
| (b) Legislative findings and purpose. |
| (1) Pursuant to P.L. 2012, Ch. 241, Art. 22, which defined the terms of the initial |
| appropriation, the state made an appropriation of two million six hundred thirty-six thousand nine |
| hundred thirty-two dollars ($2,636,932), which was deposited into a restricted account held by the |
| city of Central Falls, for the purpose of supplementing the reduced pensions of the Central Falls |
| retirees, to enable the city to pay the Central Falls retirees seventy-five percent (75%) of their base |
| pension benefit as of July 31, 2011, for a five-year (5) period, with the last supplemental |
| appropriation to be paid on or within thirty (30) days of July 1, 2015. |
| (2) The drastic pension reductions experienced by the Central Falls retirees provided a |
| harsh example of the risks of unfunded-pension liabilities, which, in turn, provided the primary |
| incentive toward successful pension negotiations with other municipal, police, and fire retirees, |
| saving the state more than sixty million dollars ($60,000,000). |
| (3) If said appropriation is not made prior to July 1, 2016, the Central Falls retirees, many |
| of whom sustained serious and permanent injuries in service to the city, will have their pensions |
| reduced yet again, in some instances to less than sixty percent (60%) of the pension they were |
| receiving on July 11, 2011. |
| (4) It is fair and just that the state appropriate sufficient funds to the city to supplement the |
| city's funding of the pension benefits to the Central Falls retirees to ensure that the Central Falls |
| retirees continue to receive no less than seventy-five percent (75%) of the base pension benefit, |
| after taking into account all applicable cost-of-living adjustments, for their lifetime, and to the |
| extent applicable, for the life of their beneficiaries. |
| (c) Appropriation payment. |
| (1) Appropriation payment and restrictions on use. In accordance with the terms set forth |
| in Article 22 and the settlement agreement, the state shall annually appropriate sufficient funds to |
| the restricted account for the city of Central Falls to supplement the city's funding for payments to |
| Central Falls retirees in order that they continue to receive no less than seventy-five percent (75%) |
| of their base pension benefit as of July 31, 2011, after taking into account all applicable cost-of- |
| living adjustments, for their lifetime, and to the extent applicable, for the life of their beneficiaries. |
| Such appropriation shall be determined annually by an actuarial valuation ("appropriation |
| amount"), and it is expected over the life of the existing retirees to total four million eight hundred |
| seventeen thousand seven hundred eight dollars ($4,817,708). |
| (2) Deposit of appropriation payment and payments to Central Falls retirees. The |
| appropriation payment shall be immediately deposited by the city into the previously established |
| "participating retirees restricted five-year (5) account", which shall be redesignated as the |
| "participating retirees' restricted account." The participating retirees' account shall be administered |
| by the city and not by any third-party pension-fund manager. |
| (d) Any and all withdrawals, transfers, and payments from the participating retirees' |
| account shall be made as set forth in the settlement agreement and accompanying appendices and |
| said Article 22 (c) until the payments are made on July 1, 2015. |
| (e) Beginning on or within thirty (30) days of July 1, 2016, and annually thereafter, with |
| payments to be paid each retiree or beneficiary as applicable on or within thirty (30) days of July |
| 1 of each year they are eligible for benefits under the Central Falls pension plan, the city shall |
| distribute to each participating retiree or beneficiary the annual amount listed on the actuarial |
| spreadsheets prepared by Sherman Actuarial Services, which shall supplement the pension |
| payments paid by the city in order that each retiree will receive no less than seventy-five percent |
| (75%) of his or her base pension benefit, after taking into account all applicable cost-of-living |
| adjustments, for his or her lifetime, and to the extent applicable, sixty-seven and one-half percent |
| (67.5%) of the base pension benefit, after taking into account all applicable cost-of-living |
| adjustments, to his or her beneficiaries for his or her lifetime. Such supplemental distributions shall |
| be made by the city when the funds appropriated by the state are made available to the city, which |
| shall be as close to July 1 as practicable. |
| (f) Relationship to base pension payments. The supplemental payments to the Central Falls |
| retirees from the participating retirees' restricted account shall not be included in the calculation of |
| base pension benefits for the purposes of determining a retiree's or beneficiary's cost-of-living |
| adjustment. |
| (g) The cost-of-living adjustments as set forth in the settlement agreement are to be paid |
| by the city of Central Falls to the Central Falls retirees, and to the extent applicable, their |
| beneficiaries. |
| (h) The following provision shall amend and supersede P.L. 2012, Ch. 241, Art. 22 (c)(4) |
| regarding the balance in the participating retirees' restricted account as of August 1, 2015: |
| (1) Distribution of balance. As of August 1, 2015, no further supplemental payments shall |
| be distributed to the Central Falls retirees under the terms of the settlement agreement. The balance |
| of monies in the participating retirees' restricted account shall be distributed in accordance with this |
| Article, in the amounts and to those retirees and beneficiaries listed on the actuarial spreadsheets |
| prepared by Sherman Actuarial Services, LLC and maintained and administered by the city. The |
| amounts set forth on the actuarial spreadsheets will supplement the pension payments being made |
| by the city in order that each retiree will receive no less than seventy-five percent (75%) of their |
| base pension benefit, after taking into account all applicable cost-of-living adjustments, for his or |
| her lifetime, and to the extent applicable, sixty-seven and one-half percent (67.5%) of the base |
| pension benefit, after taking into account all applicable cost-of-living adjustments, to their |
| beneficiaries for his or her lifetime. |
| (2) Any monies remaining in the participating retirees' restricted account after the last- |
| living retiree attains seventy-five percent (75%) of the base pension benefit, after taking into |
| account all applicable cost-of-living adjustments, or last-living beneficiary attains sixty-seven and |
| one-half percent (67.5%) of the base pension benefit, after taking into account all applicable cost- |
| of-living adjustments, shall be returned to the state under state law. |
| (i) Access to account information and records. The city shall maintain appropriate account |
| information and records relating to all receipts into, maintenance of, and distributions from, the |
| participating retirees' restricted account, and shall allow, at all reasonable times, for the full |
| inspection and copying and sharing of information about such account and any and all payments |
| therefrom with any participating retiree and the state. |
| (j) Unclaimed payments. Any monies distributed to a participating retiree or beneficiary |
| from the participating retirees' restricted account and not claimed by a participating retiree or |
| beneficiary after the city has exercised good faith attempts over a six-month (6) period to deliver it |
| to the best, last-known address of such participating retiree or beneficiary, shall not escheat under |
| state law, but shall remain in the participating retirees' restricted account until the conditions of |
| subsection (h) herein have been satisfied. |
| (k) Liabilities and penalties for inappropriate use of appropriation payment. Any person, |
| whether in his/her individual capacity, who uses, appropriates, or takes or instructs another to use, |
| appropriate, or take, the appropriation payment, or any portion thereof, that is not specifically used |
| for making payments to participating retirees or their beneficiaries as required hereunder and under |
| the terms of the settlement agreement, shall be personally liable for repayment of said funds and |
| further shall be subject to any and all applicable civil and criminal sanctions and/or penalties for |
| such act(s). |
| (l) Retirees' beneficiaries. Upon the death of any retiree covered by this section, their |
| beneficiary shall receive sixty-seven percent (67%) of the retiree's base pension benefit, as defined |
| in ยง 45-21-67(a)(1)." |