Chapter 205 |
2019 -- H 5382 SUBSTITUTE A Enacted 07/15/2019 |
A N A C T |
RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM CONTRIBUTIONS AND BENEFITS |
Introduced By: Representatives Lima, O'Brien, Amore, Solomon, and Casey |
Date Introduced: February 14, 2019 |
It is enacted by the General Assembly as follows: |
SECTION 1. Sections 8-3-16 and 8-3-17 of the General Laws in Chapter 8-3 entitled |
"Justices of Supreme, Superior, and Family Courts" are hereby amended to read as follows: |
8-3-16. Retirement contribution. |
(a) Judges engaged after December 31, 1989, shall have deducted from total salary |
beginning December 31, 1989, and ending June 30, 2012, an amount equal to a rate percent of |
compensation as specified in § 36-10-1 relating to member contributions to the state retirement |
system. Effective July 1, 2012, all active judges, whether engaged before or after December 31, |
1989, shall have deducted from compensation as defined in subsection 36-8-1(8) an amount equal |
to twelve percent (12%) of compensation, except active Supreme Court Judges as of June 30, |
2012, who shall have deducted from compensation as defined in section 36-8-1(8) an amount |
equal to the percent of compensation in effect on June 30, 2012. Proceeds deposited shall be held |
in trust for the purpose of paying retirement benefits to participating judges or their beneficiaries |
on the date contributions are withheld but no later than three (3) business days following the pay |
period ending in which contributions were withheld. The retirement board shall establish rules |
and regulations to govern the provisions of this section. |
(b) The state is required to deduct and withhold member contributions and to transmit |
same to the retirement system and is hereby made liable for the contribution. In addition, any |
amount of employee contributions actually deducted and withheld shall be deemed to be a special |
fund in trust for the benefit of the member and shall be transmitted to the retirement system as set |
forth herein. |
(b)(c) A member of the judiciary who withdraws from service or ceases to be a member |
for any reason other than retirement, shall be paid on demand a refund consisting of the |
accumulated contributions standing to his or her credit in his or her individual account in the |
judicial retirement benefits account. Any member receiving a refund shall thereby forfeit and |
relinquish all accrued rights as a member of the system together with credits for total service |
previously granted to the member; provided, however, that if any member who has received a |
refund shall subsequently reenter the service and again become a member of the system, he or she |
shall have the privilege of restoring all money previously received or disbursed to his or her credit |
as refund of contributions plus regular interest for the period from the date of refund to the date of |
restoration. Upon the repayment of the refund as herein provided, the member shall again receive |
credit for the amount of total service which he or she had previously forfeited by the acceptance |
of the refund. |
(c)(d) Whenever any judge dies from any cause before retirement and has no surviving |
spouse, domestic partner, or minor child(ren), a payment shall be made of the accumulated |
contributions standing to his or her credit in his or her individual account in the judicial |
retirement benefits account. The payment of the accumulated contributions of the judge shall be |
made to such person as the judge shall have nominated by written designation duly executed and |
filed with the retirement board, or if the judge has filed no nomination, or if the person so |
nominated has died, then to the estate of the deceased judge. |
8-3-17. State contributions. |
The state of Rhode Island shall make its contribution for the maintaining of the system |
established by § 8-3-16 and providing the annuities, benefits, and retirement allowances in |
accordance with the provisions of this chapter by annually appropriating an amount which that |
will pay a rate percent of the compensation paid after December 31, 1989, to judges engaged after |
December 31, 1989. Such The rate percent shall be computed and certified in accordance with |
the procedures set forth in §§ 36-8-13 and 36-10-2 under rules and regulations promulgated by |
the retirement board pursuant to § 36-8-3. The amounts that would have been contributed shall be |
deposited in a special fund and not used for any purpose on the date contributions are withheld |
but no later than three (3) business days following the pay period ending in which contributions |
were withheld. |
SECTION 2. Sections 8-8-10.1 and 8-8-10.2 of the General Laws in Chapter 8-8 entitled |
"District Court" are hereby amended to read as follows: |
8-8-10.1. Retirement contribution. |
(a) Judges engaged after December 31, 1989, shall have deducted from total salary |
beginning December 31, 1989, and ending June 30, 2012, an amount equal to a rate percent of |
compensation as specified in § 36-10-1 relating to member contributions to the state retirement |
system. Effective July 1, 2012, all active judges, whether engaged before or after December 31, |
1989, shall have deducted from compensation as defined in subsection 36-8-1(8) an amount equal |
to twelve percent (12%) of compensation. The receipts collected under this provision shall be |
deposited in a restricted revenue account entitled "Judicial retirement benefits" " on the date |
contributions are withheld but no later than three (3) business days following the pay period |
ending in which contributions were withheld. Proceeds deposited in this account shall be held in |
trust for the purpose of paying retirement benefits to participating judges or their beneficiaries. |
The retirement board shall establish rules and regulations to govern the provisions of this section. |
(b) The state is required to deduct and withhold member contributions and to transmit |
same to the retirement system and is hereby made liable for the contribution. In addition, any |
amount of employee contributions actually deducted and withheld shall be deemed to be a special |
fund in trust for the benefit of the member and shall be transmitted to the retirement system as set |
forth herein. |
(b)(c) A member of the judiciary who withdraws from service or ceases to be a member |
for any reason other than retirement shall be paid on demand a refund consisting of the |
accumulated contributions standing to his or her credit in his or her individual account in the |
judicial retirement benefits account. Any member receiving a refund shall thereby forfeit and |
relinquish all accrued rights as a member of the system together with credits for total service |
previously granted to the member; provided, however, that if any member who has received a |
refund shall subsequently reenter the service and again become a member of the system, the |
member shall have the privilege of restoring all money previously received or disbursed to his or |
her credit as refund of contributions plus regular interest for the period from the date of refund to |
the date of restoration. Upon the repayment of the refund as herein provided, the member shall |
again receive credit for the amount of total service which he or she had previously forfeited by |
the acceptance of the refund. |
(c)(d) Whenever any judge dies from any cause before retirement and has no surviving |
spouse, domestic partner, or minor child(ren), a payment shall be made of the accumulated |
contributions standing to his or her credit in his or her individual account in the judicial |
retirement benefits account. The payment of the accumulated contributions of the judge shall be |
made to such person as the judge shall have nominated by written designation duly executed and |
filed with the retirement board, or if the judge has filed no nomination, or if the person so |
nominated has died, then to the estate of the deceased judge. |
8-8-10.2. State contributions. |
The state of Rhode Island shall make its contribution for the maintaining of the system |
established by § 8-8-10.1 and providing the annuities, benefits, and retirement allowances in |
accordance with the provisions of this chapter by annually appropriating an amount which that |
will pay a rate percent of the compensation paid after December 31, 1989, to judges engaged after |
December 31, 1989. The rate percent shall be computed and certified in accordance with the |
procedures set forth in § 36-8-13 and § 36-10-2 under rules and regulations promulgated by the |
retirement board pursuant to § 36-8-3 and shall be transmitted on the date contributions are |
withheld but no later than three (3) business days following the pay period ending in which |
contributions were withheld. |
SECTION 3. Sections 8-8.2-7 and 8-8.2-8 of the General Laws in Chapter 8-8.2 entitled |
"Traffic tribunal" are hereby amended to read as follows: |
8-8.2-7. Retirement contribution. |
(a) Judges of the administrative adjudication court engaged after December 31, 1989, |
who are reassigned by this chapter to the traffic tribunal shall have deducted from their total |
salary beginning December 31, 1989, and ending June 30, 2012, an amount equal to a rate percent |
of compensation as specified in § 36-10-1 relating to member contributions to the state retirement |
system. Effective July 1, 2012, all active judges whether engaged before or after December 31, |
1989, shall have deducted from compensation as defined in 36-8-1(8) an amount equal to twelve |
percent (12%) of compensation. The receipts collected under this provision shall be deposited in a |
restricted revenue account entitled "administrative adjudication retirement benefits" on the date |
contributions are withheld but no later than three (3) business days following the pay period |
ending in which contributions were withheld. Proceeds deposited in this account shall be used to |
pay judges' retirement costs. The retirement board shall establish rules and regulations to govern |
the provisions of this section. |
(b) The state is required to deduct and withhold member contributions and to transmit |
same to the retirement system and is hereby made liable for the contribution. In addition, any |
amount of employee contributions actually deducted and withheld shall be deemed to be a special |
fund in trust for the benefit of the member and shall be transmitted to the retirement system as set |
forth herein. |
(b)(c) A judge of the administrative adjudication court reassigned by this chapter to the |
traffic tribunal who withdraws from service or ceases to be a member for any reason other than |
death or retirement, shall be paid on demand a refund consisting of the accumulated contributions |
standing to his or her credit in his or her individual account in the administrative adjudication |
retirement benefits account. Any member receiving a refund shall thereby forfeit and relinquish |
all accrued right as a member of the system together with credits for total service previously |
granted to the member; provided, however, that if any member who has received a refund shall |
subsequently reenter the service and again become a member of the system, he or she shall have |
the privilege of restoring all moneys previously received or disbursed to his or her credit as a |
refund of contributions plus regular interest for the period from the date of refund to the date of |
restoration. Upon the repayment of the refund as herein provided, such member shall again |
receive credit for the amount of total service which he or she had previously forfeited by the |
acceptance of the refund. |
(c)(d) Whenever any judge of the administrative adjudication court dies from any cause |
before retirement and has no surviving spouse or domestic partner or minor child(ren), a payment |
shall be made of the accumulated contributions standing to his or her credit in his or her |
individual account in the administrative adjudication court judges' retirement account. The |
payment of the accumulated contributions of the judge shall be made to such person as the judge |
shall have nominated by written designation duly executed and filed with the retirement board, or |
if the judge has no filed nomination, or if the person so nominated has died, then to the estate of |
the deceased judge. |
8-8.2-8. State contributions. |
The state of Rhode Island shall make its contribution for maintaining the system |
established by § 8-8.2-7 and providing the annuities, benefits, and retirement allowances in |
accordance with the provisions of this chapter, by annually appropriating an amount which that |
will pay a rate percent of the compensation paid after December 31, 1989, to judges of the |
administrative adjudication court engaged after December 31, 1989, who are reassigned by this |
chapter to the traffic tribunal. The rate percent shall be computed and certified in accordance with |
the procedures set forth in § 36-8-13 and § 36-10-2 under rules and regulations promulgated by |
the retirement board pursuant to § 36-8-3 and shall be transmitted on the date contributions are |
withheld but no later than three (3) business days following the pay period ending in which |
contributions were withheld. |
SECTION 4. Sections 16-16-22 and 16-16-22.1 of the General Laws in Chapter 16-16 |
entitled "Teachers' Retirement [See Title 16 Chapter 97 - The Rhode Island Board of Education |
Act]" are hereby amended to read as follows: |
16-16-22. Contributions to state system. |
(a) Prior to July 1, 2012, each teacher shall contribute into the system nine and one-half |
percent (9.5%) of compensation as his or her share of the cost of annuities, benefits, and |
allowances. Effective July 1, 2012, each teacher shall contribute an amount equal to three and |
three quarters percent (3.75%) of his or her compensation. Effective July 1, 2015, each teacher |
with twenty (20) or more years of total service as of June 30, 2012, shall contribute an amount |
equal to eleven percent (11%) of his or her compensation. The employer contribution on behalf of |
teacher members of the system shall be in an amount that will pay a rate percent of the |
compensation paid to the members, according to the method of financing prescribed in the State |
Retirement Act state retirement act in chapters 8 -- 10 and 10.3 of title 36. This amount shall be |
paid forty percent (40%) by the state, and sixty percent (60%) by the city, town, local educational |
agency, or any formalized commissioner-approved cooperative service arrangement by whom the |
teacher members are employed, with the exception of teachers who work in federally funded |
projects and further with the exception of any supplemental contributions by a local municipality |
employer under chapter 36-10.3 10.3 of title 36 which supplemental employer contributions shall |
be made wholly by the local municipality. Provided, however, that the rate percent paid shall be |
rounded to the nearest hundredth of one percent (.01%). |
(b) The employer contribution on behalf of teacher members of the system who work in |
fully or partially federally funded programs shall be prorated in accordance with the share of the |
contribution paid from the funds of the federal, city, town, or local educational agency, or any |
formalized commissioner-approved cooperative service arrangement by whom the teacher |
members are approved. |
(c) In case of the failure of any city, town, or local educational agency, or any formalized |
commissioner-approved cooperative service arrangement, to pay to the state retirement system |
the amounts due from it under this section within the time prescribed, the general treasurer is |
authorized to deduct the amount from any money due the city, town, or local educational agency |
from the state. |
(d) The employer's contribution shared by the state shall be paid in the amounts |
prescribed in this section for the city, town, or local educational agency and under the same |
payment schedule. Notwithstanding any other provisions of this chapter, the city, town, or local |
educational agency or any formalized commissioner-approved cooperative service arrangement |
shall remit to the general treasurer of the state the local employer's share of the teacher's |
retirement payments on a monthly basis, payable by the fifteenth (15th) of the following month |
on the date contributions are withheld but no later than three (3) business days following the pay |
period ending in which contributions were withheld. The amounts that would have been |
contributed shall be deposited by the state in a special fund and not used for any purpose. The |
general treasurer, upon receipt of the local employer's share, shall effect transfer of a matching |
amount of money from the state funds appropriated for this purpose by the general assembly into |
the retirement fund. |
Upon reconciliation of the final amount owed to the retirement fund for the employer |
share, the state shall ensure that any local education aid reduction assumed for the FY 2010 |
revised budget in excess of the actual savings is restored to the respective local entities. |
(e) This section is not subject to §§ 45-13-7 through 45-13-10. |
16-16-22.1. City or town payment of teacher member contributions. |
(a) Each city or town, pursuant to the provisions of § 414(h)(2) of the United States |
Internal Revenue Code, 26 U.S.C. § 414(h)(2), may, pursuant to appropriate local action by the |
city or town, pick up and pay the contributions which that would be payable by the employees as |
teacher members under § 16-16-22. The contributions so picked up shall be treated as employer |
contributions in determining tax treatment under the United States Internal Revenue Code. |
Employee contributions picked up pursuant to this section shall be treated and identified as |
teacher member contributions for all purposes of the retirement system except as specifically |
provided to the contrary in this section. |
(b) Teacher member contributions picked up by a city or town shall be paid from the |
same source of funds used for the payment of compensation to a teacher member. A deduction |
shall be made from a teacher member's compensation equal to the amount of his or her |
contributions picked up by his or her city or town employer. This deduction, however, shall not |
reduce his or her compensation for purposes of computing benefits under the retirement system |
pursuant to this chapter or chapter 10 of title 36. Picked up contributions shall be transmitted to |
the retirement system in accordance with the provisions of § 16-16-22 and § 36-10-1 on the date |
contributions are withheld but no later than three (3) business days following the pay period |
ending in which contributions were withheld. |
(c) Every employer is required to deduct and withhold member contributions and to |
transmit same to the retirement system and is hereby made liable for the contribution. In addition, |
any amount of employee contributions actually deducted and withheld shall be deemed to be a |
special fund in trust for the benefit of the member and shall be transmitted to the retirement |
system as set forth herein. |
(d) The liability of an employer who fails to segregate such these trust funds, or refuses |
to deduct and withhold member contributions from its employees, is enforceable by the |
retirement board through an appropriate action in the superior court. The general treasurer is also |
authorized to deduct the amount due from any money due the employer from the state. |
SECTION 5. Sections 28-30-18.1 and 28-30-18.2 of the General Laws in Chapter 28-30 |
entitled "Workers' Compensation Court" are hereby amended to read as follows: |
28-30-18.1. Retirement contribution. |
(a) Workers' compensation judges engaged after December 31, 1989, shall have deducted |
from total salary beginning December 31, 1989, and ending on June 30, 2012, an amount equal to |
a rate percent of compensation as specified in § 36-10-1 relating to member contributions to the |
state retirement system. Effective July 1, 2012, all active workers' compensation judges whether |
engaged before or after December 31, 1989, shall have deducted from compensation as defined in |
§ 36-8-1(8) an amount equal to twelve percent (12%) of compensation. The receipts collected |
under this provision shall be deposited in a restricted revenue account entitled "workers' |
compensation judges' retirement benefits" on the date contributions are withheld but no later than |
three (3) business days following the pay period ending in which contributions were withheld. |
Proceeds deposited in this account shall be held in trust for the purpose of paying retirement |
benefits to participating judges or their beneficiaries. The retirement board shall establish rules |
and regulations to govern the provisions of this section. |
(b) The state is required to deduct and withhold member contributions and to transmit |
same to the retirement system and is hereby made liable for the contribution. In addition, any |
amount of employee contributions actually deducted and withheld shall be deemed to be a special |
fund in trust for the benefit of the member and shall be transmitted to the retirement system as set |
forth herein. |
(b)(c) A judge of the court who withdraws from service or ceases to be a judge for any |
reason other than retirement shall be paid on demand a refund consisting of the accumulated |
contributions standing to his or her credit in his or her individual account in the workers' |
compensation judges' retirement benefits account. Any judge receiving a refund shall forfeit and |
relinquish all accrued rights as a member of the system together with credits for total service |
previously granted to the judge; provided, that if any judge who has received a refund |
subsequently reenters the service and again becomes a member of the system, he or she shall have |
the privilege of restoring all money previously received or disbursed to his or her credit as refund |
of contributions, together with regular interest for the time period from the date of refund to the |
date of restoration. Upon the repayment of the refund, the judge shall again receive credit for the |
amount of total service that he or she had previously forfeited by the acceptance of the refund. |
(c)(d) Whenever any judge of the workers' compensation court dies from any cause |
before retirement and has no surviving spouse, domestic partner, or minor child(ren), a payment |
shall be made of the accumulated contributions standing to his or her credit in his or her |
individual account in the workers' compensation judges' retirement account. The payment of the |
accumulated contributions of the judge shall be made to such person as the judge shall have |
nominated by written designation duly executed and filed with the retirement board, or if the |
judge has filed no nomination, or if the person so nominated has died, then to the estate of the |
deceased judge. |
28-30-18.2. State contributions. |
The state of Rhode Island shall make its contribution for the maintaining of the system |
established by § 28-30-18.1 and providing the annuities, benefits, and retirement allowances in |
accordance with the provisions of this chapter by annually appropriating an amount which that |
will pay a rate percent of the compensation paid after December 31, 1989, to judges engaged after |
December 31, 1989. The rate percent shall be computed and certified in accordance with the |
procedures set forth in §§ 36-8-13 and 36-10-2 under rules and regulations promulgated by the |
retirement board pursuant to § 36-8-3 and shall be transmitted on the date contributions are |
withheld but no later than three (3) business days following the pay period ending in which |
contributions were withheld. |
SECTION 6. Sections 36-10-1.1 and 36-10-2 of the General Laws in Chapter 36-10 |
entitled "Retirement System - Contributions and Benefits" are hereby amended to read as follows: |
36-10-1.1. Department payment of member contributions. |
(a) Each department, pursuant to the provisions of § 414(h)(2) of the United States |
Internal Revenue Code, 26 U.S.C. § 414(h)(2), shall pick up and pay the contributions which |
that would be payable by the employees as members under §§ 36-10-1, 8-3-16, 8-8-10.1, 8-8.2-7, |
28-30-18.1, and 42-28-22.1. The contributions so picked up shall be treated as employer |
contributions in determining tax treatment under the United States Internal Revenue Code; and |
shall not be included as gross income of the employee until such time as they are distributed. |
Employee contributions which that are picked up pursuant to this section shall be treated and |
identified as member contributions for all purposes of the retirement system except as specifically |
provided to the contrary in this section. |
(b) Member contributions picked up by a department shall be paid from the same source |
of funds used for the payment of compensation to a member. A deduction shall be made from a |
member's compensation equal to the amount of his or her contributions picked up by his or her |
departmental employer. This deduction, however, shall not reduce his or her compensation for |
purposes of computing benefits under the applicable retirement system. Picked up contributions |
shall be transmitted to the retirement system in accordance with the provisions of § 36-10-1, on |
the date contributions are withheld but no later than three (3) business days following the pay |
period ending in which contributions were withheld. |
(c) The state is required to deduct and withhold member contributions and to transmit |
same to the retirement system and is hereby made liable for the contribution. In addition, any |
amount of employee contributions actually deducted and withheld shall be deemed to be a special |
fund in trust for the benefit of the member and shall be transmitted to the retirement system as set |
forth herein. |
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 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 section § 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 subsection 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 36-10.3 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; |
(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 36-10.3 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) 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) 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, such 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 7. Sections 36-10.3-4, 36-10.3-5 and 36-10.3-6 of the General Laws in |
Chapter 36-10.3 entitled "Defined Contribution Retirement Plan" are hereby amended to read as |
follows: |
36-10.3-4. Member contributions. |
(1) Each regular member shall contribute to the member's individual account in the plan |
an amount equal to five percent (5%) of the member's compensation from July 1 to the following |
June 30. |
(2) Each public safety member not participating in Social Security under the Federal Old |
Age, Survivors and Disability Income program, shall contribute to the member's individual |
account an amount equal to three percent (3%) of the member's compensation from July 1 to the |
following June 30. |
(3) Contributions by supplemental members shall be governed by § 36-10.3-6. |
(4) The employer shall deduct the contribution from the member's compensation at the |
end of each payroll period, and shall remit such the contributions 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 the contribution shall be credited by the plan to the member's |
individual account. The contributions shall be deducted from the member's compensation before |
the computation of applicable federal taxes and shall be treated as employer contributions under |
26 U.S.C. § 414(h)(2). A member shall not have the option of making the payroll deduction |
directly in cash instead of having the contribution picked up by the employer. |
(5) Contributions of employees shall be made by payroll deductions. Every member shall |
be considered to consent to payroll deductions. It is of no consequence that a payroll deduction |
may cause the compensation paid in cash to an employee to be reduced below the minimum |
required by law. Payment of an employee's compensation, less payroll deductions, is a full and |
complete discharge and satisfaction of all claims and demands by the employee relating to |
remuneration of services during the period covered by the payment, except with respect to the |
benefits provided under the plan. |
(6) Additional voluntary member contributions may be permitted in accordance with this |
section in such manner as determined in the discretion of the commission. |
(7) Every employer is required to deduct and withhold member contributions and to |
transmit same to the retirement system and is hereby made liable for the contribution. In addition, |
any amount of employee contributions actually deducted and withheld shall be deemed to be a |
special fund in trust for the benefit of the member and shall be transmitted to the retirement |
system as set forth herein. |
36-10.3-5. Employer contributions. |
(1) An employer shall contribute to each regular member's individual account the |
following amounts on the date contributions are withheld but no later than three (3) business days |
following the pay period ending in which contributions were withheld: |
(i) For members with fewer than ten (10) years of total service as of June 30, 2012, an |
amount equal to one percent (1%) of the member's compensation at the end of each payroll period |
from July 1 to the following June 30; |
(ii) For members with ten (10) or more, but fewer than fifteen (15) years of total service |
as of June 30, 2012, an amount equal to one percent (1%) of the member's compensation at the |
end of each payroll period from July 1, 2012 through June 30, 2015, and effective July 1, 2015, |
an amount equal to one and one-quarter percent (1.25%) of the member's compensation at the end |
of each payroll period; and |
(iii) For members with fifteen (15) or more, but fewer than twenty (20) years of total |
service as of June 30, 2012, an amount equal to one percent (1%) of the member's compensation |
at the end of each payroll period from July 1, 2012 through June 30, 2015, and effective July 1, |
2015, an amount equal to one and one-half percent (1.5%) of the member's compensation at the |
end of each payroll period from July 1 to the following June 30. |
(2) An employer shall contribute to the individual account of each public safety member, |
not participating in Social Security under the Federal Old Age, Survivors and Disability Income |
program, an amount equal to three percent (3%) of the member's compensation from July 1 to the |
following June 30. |
(3) Contributions by supplemental employers shall be governed by § 36-10.3-6. |
36-10.3-6. Supplemental employer and member contributions. |
(a) A supplemental member shall contribute to the member's individual account an |
amount equal to two percent (2%) of the member's compensation from July 1 to the following |
June 30 in addition to the requirements of § 36-10.3-4. For such these members, a supplemental |
employer shall contribute to the member's individual account an amount equal to two percent |
(2%) of the member's compensation from July 1 to the following June 30 in addition to the |
requirements of § 36-10.3-5. |
(b) A supplemental employer may request a different level of supplemental member |
contributions and supplemental employer contributions subject to the approval of the state |
investment commission. |
(c) Such The contributions shall be transmitted 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 every employer is required to deduct and withhold member supplemental |
contributions and to transmit same to the retirement system and is hereby made liable for the |
contribution. In addition, any amount of employee contributions actually deducted and withheld |
shall be deemed to be a special fund in trust for the benefit of the member and shall be |
transmitted to the retirement system as set forth herein. |
SECTION 8. Sections 42-28-22.1 and 42-28-22.2 of the General Laws in Chapter 42-28 |
entitled "State Police" are hereby amended to read as follows: |
42-28-22.1. Retirement contribution. |
(a) Legislative findings. The general assembly finds that: |
(1) A trust was created for retirement purposes for members of the state police who were |
hired after July 1, 1987; however, as of January 1, 2015, there was an unfunded liability of |
approximately $200 million attributable to the retirement benefits for members of the state police |
hired on or before July 1, 1987, and no trust had been created for them. |
(2) Unless a trust is established, these members' benefits will continue to be funded on a |
pay-as-you-go basis and would not be recognized as a liability on the state's financial statements |
under generally accepted accounting purposes. |
(3) An investigation of Google, Inc., conducted by the Rhode Island U.S. attorney's office |
and the Rhode Island task force of the U.S. food and drug administration's office of criminal |
investigations, the department of the attorney general, and state and local police netted settlement |
amounts of approximately $230 million to the state, of which $45.0 million has been allocated for |
use by the state police. |
(4) The allocation of Google settlement monies to the state police presents a unique |
opportunity to reduce the amount of the unfunded liability attributable to the retirement benefits |
for members of the state police hired on or before July 1, 1987. |
(5) It is in the best interests of the members of the state police and the taxpayers of this |
state to reduce the amount of the unfunded liability attributable to retirement benefits for these |
police officers by creating a separate trust and to fund those benefits on an actuarial basis. |
(b) Each member of the state police initially hired after July 1, 1987, shall have deducted |
from "compensation" as defined in § 36-8-1(8) beginning July 1, 1989, an amount equal to a rate |
percent of such compensation of eight and three quarters percent (8.75%). The receipts collected |
from members of the state police shall be deposited in a restricted revenue account entitled "state |
police retirement benefits" on the date contributions are withheld but no later than three (3) |
business days following the pay period ending in which contributions were withheld. The |
proceeds deposited in this account shall be held in trust for the purpose of paying retirement |
benefits under this section to participating members of the state police or their beneficiaries. The |
retirement board shall establish rules and regulations to govern the provisions of this section. |
(c) The state is required to deduct and withhold member contributions and to transmit |
same to the retirement system and is hereby made liable for the contribution. In addition, any |
amount of employee contributions actually deducted and withheld shall be deemed to be a special |
fund in trust for the benefit of the member and shall be transmitted to the retirement system as set |
forth herein. |
(c)(d) A member of the state police initially hired after July 1, 1987, who withdraws from |
service or ceases to be a member for any reason other than death or retirement, will, at the |
member's request, be paid on demand a refund consisting of the accumulated contributions |
standing to his or her credit in his or her individual account in the state police retirement benefits |
account. Any member receiving a refund shall thereby forfeit and relinquish all accrued rights as |
a member of the system together with credits for total service previously granted to the member; |
provided, however, that if any member who has received a refund shall subsequently reenter the |
service and again become a member of the system, he or she shall have the privilege of restoring |
all moneys previously received or disbursed to his or her credit as refund of contributions, plus |
regular interest for the period from the date of refund to the date of restoration. |
(d)(e) Upon the repayment of the refund provided in subsection (c)(d) above, the member |
shall again receive credit for the amount of total service which he or she had previously forfeited |
by the acceptance of the refund. |
(f) The state shall deposit contributions for members of the state police initially hired on |
or before July 1, 1987, from time to time (as provided in § 42-28-22.2) to be held in trust. The |
proceeds of this trust shall pay retirement benefits under this section to participating members of |
the state police or their beneficiaries. The retirement board shall establish rules and regulations to |
govern the provisions of this section. |
42-28-22.2. State contributions. |
The state of Rhode Island shall make its contribution for the maintaining of the system |
established by § 42-28-22.1 and providing the annuities, benefits, and retirement allowances in |
accordance with the provisions of this chapter by (a) annually appropriating an amount which |
that will pay a rate percent of the compensation paid after July 1, 1989, to members of the state |
police hired after July 1, 1987, and (b) appropriating an amount which will amortize the unfunded |
liability associated with the benefits payable to members of the state police hired on or before |
July 1, 1987. The dollar amount specified in subsection (b) above shall be computed on an |
actuarial basis using an eighteen-(18) year (18) amortization schedule commencing on July 1, |
2015, taking into account an initial supplemental contribution from the state, and certified in |
accordance with the procedures set forth in §§ 36-8-13 and 36-10-2 under rules and regulations |
promulgated by the retirement board pursuant to § 36-8-3. Such The contributions shall be |
transmitted on the date contributions are withheld but no later than three (3) business days |
following the pay period ending in which contributions were withheld. |
SECTION 9. Sections 45-21-41.1 and 45-21-42 of the General Laws in Chapter 45-21 |
entitled "Retirement of Municipal Employees" are hereby amended to read as follows: |
45-21-41.1. Municipality payment of member contributions. |
(a) Each municipality, pursuant to the provisions of 26 U.S.C. § 414(h)(2) of the United |
States Internal Revenue Code, may, pursuant to appropriate legal action by the municipality, pick |
up and pay the contributions which would be payable by the employees as members under § 45- |
21-41. The contributions so picked up shall be treated as employer contributions in determining |
tax treatment under the United States Internal Revenue Code; however, each municipality shall |
continue to withhold federal and state income taxes based upon these contributions until the |
Internal Revenue Service rules that pursuant to 26 U.S.C. § 414(h)(2) of the United States |
Internal Revenue Code, these contributions shall not be included as gross income of the employee |
until the time they are distributed. Employee contributions which are picked up pursuant to this |
section shall be treated and identified as member contributions for all purposes of the retirement |
system except as specifically provided to the contrary in this section. |
(b) Member contributions picked up by a municipality shall be paid from the same source |
of funds used for the payment of compensation to a member. A deduction shall be made from a |
member's compensation equal to the amount of the employee's contributions picked up by the |
employee's municipal employer. This deduction, however, shall not reduce the employee's |
compensation for purposes of computing benefits under the retirement system pursuant to this |
chapter. Picked up contributions shall be submitted to the retirement system in accordance with |
the provisions of § 45-21-41 on the date contributions are withheld but no later than three (3) |
business days following the pay period ending in which contributions were withheld. |
(c) Every employer is required to deduct and withhold member contributions and to |
transmit same to the retirement system and is hereby made liable for the contribution. In addition, |
any amount of employee contributions actually deducted and withheld shall be deemed to be a |
special fund in trust for the benefit of the member and shall be transmitted to the retirement |
system as set forth herein. |
(d) The liability of an employer who fails to segregate such the trust funds, or refuses to |
deduct and withhold member contributions from its employees, is enforceable by the retirement |
board through an appropriate action in the superior court. The general treasurer is also authorized |
to deduct the amount due from any money due the employer from the state. |
45-21-42. Contributions by municipalities. |
(a) Each municipality shall make contributions to the system to provide for the remainder |
of the obligation for retirement allowances, annuities, and other benefits provided in this chapter, |
after applying the accumulated contributions of the members, interest income on investments of |
the system, and other income accruing to the system. These contributions shall, in any event, be |
sufficient to establish and maintain a reserve equal to the sum of: |
(1) The full credits for accumulated contributions in the "members' contribution reserve" |
described in § 45-21-43,; |
(2) The present value, determined in accordance with the actuarial tables in use by the |
system, of the retirement allowances, disability allowances, accidental death benefits, and other |
benefits in force, chargeable to the "retirement reserve" described in § 45-21-43,; and |
(3) The present value of deferred annuities to members who have acquired a vested right |
under the provisions of § 45-21-18. |
(b) The rate of contribution on the part of each municipality, to meet its obligations under |
this chapter, is the rate certified by the retirement board at the date of participation of the |
municipality. The rate is redetermined at least once every five (5) years and certified by the |
retirement board, upon recommendation of the actuary, following an evaluation and analysis of |
the operating experience of the system and of the assets, liabilities, and reserves of the system. |
Nothing contained in this chapter is deemed to impose any obligation upon any municipality for |
service which may have been rendered by an employee of one municipality in behalf of another |
municipality. |
(c) In case of failure of any city or town to pay to the state the amounts due from it under |
this title within the time prescribed, the general treasurer is hereby authorized to deduct that |
amount from any moneys due the city or town from the state for any purpose other than for |
education. |
(d) Notwithstanding any other provisions of the general laws, the payment of the |
contributions for the employers' share shall be remitted to the retirement board on a monthly |
basis, payable by the 15th of the following month on the date contributions are withheld but no |
later than three (3) business days following the pay period ending in which contributions were |
withheld. |
(e) This section is not subject to §§ 45-13-7 -- 45-13-10, as amended. |
SECTION 10. This act shall take effect on July 1, 2020. |
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LC001207/SUB A |
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