SECTION 1. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement System — Contributions and Benefits" is hereby amended to read as follows: 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 their 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 §§ 36-10-12 — 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 § 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. Such cost of living adjustments are available to members who retire before October 1, 2009, or are eligible to retire as of September 30, 2009.
(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, or were not eligible to retire as of September 30, 2009, 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.
(d) For state employees not eligible to retire in accordance with this chapter as of September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage 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 or three percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by 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 or three percent (3%), whichever is less, on the month following the anniversary date of each succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not apply.
(e) All legislators and all beneficiaries of legislators who are receiving a retirement allowance pursuant to the provisions of § 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.
(f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section.
(g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015.
(1) Notwithstanding the prior paragraphs of this section, and subject to subsection (g)(2) below, for all present and former employees, active and retired members, and beneficiaries receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the Five-Year Average Investment Return of the retirement system determined as of the last day of the plan year preceding the calendar year in which the adjustment is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The “Five-Year Average Investment Return” shall mean the average of the investment returns of the most recent five (5) plan years as determined by the retirement board. Subject to subsection (g)(2) below, the benefit adjustment provided by this subsection (g)(1) shall commence upon the third
(3rd) anniversary of the date of retirement or the date on which the retiree reaches their Social Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted either upward or downward in the same amount.
(2) Except as provided in subsection (g)(3), the benefit adjustments under this section for any plan year shall be suspended in their entirety unless the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all members for such plan year. In determining whether a funding level under this subsection (g)(2) has been achieved, the actuary shall calculate the funding percentage after taking into account the reinstatement of any current or future benefit adjustment provided under this section.
(3) Notwithstanding subsection (g)(2), in each fifth plan year commencing after June 30, 2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five plan years, a benefit adjustment shall be calculated and made in accordance with subsection (g)(1) above until the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty percent (80%).
(4) Notwithstanding any other provision of this chapter, the provisions of this subsection
(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or prior to June 30, 2012.
(h) This subsection (h) shall become effective July 1, 2015. (1)(A) As soon as administratively reasonable following the enactment into law of this subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent (2%) of the lesser of either the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be provided without regard to the retiree’s age or number of years since retirement.
(B) Notwithstanding the prior subsections of this section, for all present and former employees, active and retired members, and beneficiaries receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2) below, shall be equal to (I) multiplied by (II):
(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where:
(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the five-year average investment return of the retirement system determined as of the last day of the plan year preceding the calendar year in which the adjustment is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent (0%). The “five-year average investment return” shall mean the average of the investment returns of the most recent five (5) plan years as determined by the retirement board. In the event the retirement board adjusts the actuarially assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted either upward or downward in the same amount.
(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%).
(II) is equal to the lesser of either the member’s retirement allowance or the first twenty- five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above. The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, and for all other retirees the benefit adjustments shall commence upon the third anniversary of the date of retirement or the date on which the retiree reaches their Social Security retirement age, whichever is later.
(2) Except for members and/or beneficiaries of members who retired on or before June 30, 2012, the benefit adjustments under subsection (h)(1)(B) for any plan year shall be reduced to twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all members for such plan year. Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, of exceeding eighty percent (80%) for the benefit adjustment to be reinstated for all members for such plan year shall be replaced with seventy-five percent (75%). In determining whether a funding level under this subsection (h)(2) has been achieved, the actuary shall calculate the funding percentage after taking into account the reinstatement of any current or future benefit adjustment provided under this section.
(3) Effective for members and/or beneficiaries of members who retired after June 30, 2012, or on or before June 30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand eight hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six dollars ($31,026) until the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, of exceeding eighty percent (80%) shall be replaced with seventy-five percent (75%).
(i) Effective for members and/or beneficiaries of members who have retired on or before July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) days following the enactment of the legislation implementing this provision, and a second one-time stipend of five hundred dollars ($500) in the same month of the following year. These stipends shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable payment date and shall not be considered cost of living adjustments under the prior provisions of this section. (j)(1) Notwithstanding the provisions of subsection (h) of this section, beginning on January 1, 2026, and every January 1 thereafter, in addition to the provisions of this subsection, the defined benefit retirement allowance for all retired former state employees and all beneficiaries of retired former state employees, excluding all retired judges and retired members of the state police, shall be adjusted and computed by multiplying the retirement allowance by the percentage of annual increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor Bureau of Labor Statistics for the third quarter of the prior calendar year. It is further provided, however, that the amount of the cost of living adjustment shall be either the CPI-U or three percent (3%), whichever is less. Such adjustment shall be compounded into the retiree’s total retirement benefits each year. The new total retirement benefit as compounded shall be the basis for the CPI calculation each subsequent year.
(2) The adjustment described in subsection (j)(1) of this section shall be based on:
(i) The retirement benefit received by a retiree on January 1, 2026; or
(ii) For employees not receiving benefits at the time of the effective date of this subsection, upon their defined benefit retirement entitlement.
(3) The provisions of this subsection shall be deemed to apply prospectively only, and no retroactive benefit shall be awarded.
(4) The provisions of subsections (j)(1) and (j)(2) of this section providing for a cost of living allowance shall be covered by funds held by the employee retirement system of Rhode Island and shall not modify nor increase the amount by which public employers that participate in the employee retirement system of Rhode Island contribute to that system.
(5) The provisions of this subsection shall sunset and expire on July 1, 2035.
SECTION 2. Sections 16-16-23 and 16-16-40 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: 16-16-23. Applicability of public employees’ retirement law. Except as specifically provided otherwise in this chapter, and except for § 36-10-35(h) all provisions of chapters 8 — 10 of title 36 shall extend and apply to the persons made members of the retirement system by the provisions of this chapter. All members of the retirement system shall be entitled to the benefits of § 36-10-35(h). 16-16-40. Additional benefits payable to retired teachers.
(a) All teachers and all beneficiaries of teachers receiving any service retirement or ordinary or accidental 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 their 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 §§ 16-16-14 — 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 § 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. Such cost of living adjustments are available to teachers who retire before October 1, 2009, or are eligible to retire as of September 30, 2009.
(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, or were not eligible to retire as of September 30, 2009, 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.
(d) For teachers not eligible to retire in accordance with this chapter as of September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage 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 or three percent (3%), whichever is less. The first thirty-five thousand dollars ($35,000), as indexed, of retirement allowance shall be multiplied by 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 or three percent (3%), whichever is less, on the month following the anniversary date of each succeeding year. For teachers eligible to retire as of September 30, 2009, or eligible upon passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not apply.
(e) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section.
(f) This subsection (f) shall be effective for the period July 1, 2012, through June 30, 2015.
(1) Notwithstanding the prior paragraphs of this section, and subject to subsection (f)(2) below, for all present and former teachers, active and retired teachers, and beneficiaries receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the Five-Year Average Investment Return of the retirement system determined as of the last day of the plan year preceding the calendar year in which the adjustment is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of the teacher’s retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same percentage as determined under (f)(1)(A) above. The “Five-Year Average Investment Return” shall mean the average of the investment returns of the most recent five (5) plan years as determined by the retirement board. Subject to subsection (f)(2) below, the benefit adjustment provided by this subsection (f)(1) shall commence upon the third (3rd) anniversary of the date of retirement or the date on which the retiree reaches their Social Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted either upward or downward in the same amount.
(2) Except as provided in subsection (f)(3), the benefit adjustments under this section for any plan year shall be suspended in their entirety unless the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan year. In determining whether a funding level under this subsection (f)(2) has been achieved, the actuary shall calculate the funding percentage after taking into account the reinstatement of any current or future benefit adjustment provided under this section.
(3) Notwithstanding subsection (f)(2), in each fifth plan year commencing after June 30, 2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five plan years, a benefit adjustment shall be calculated and made in accordance with subsection (f)(1) above until the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty percent (80%).
(4) Notwithstanding any other provisions of this chapter, the provisions of this subsection
(f) shall become effective July 1, 2012, and shall apply to any benefit adjustments not granted on or prior to June 30, 2012.
(g) This subsection (g) shall become effective July 1, 2015. (1)(A) As soon as administratively reasonable following the enactment into law of this subsection (g)(1)(A), a one-time benefit adjustment shall be provided to teachers and/or beneficiaries of teachers who retired on or before June 30, 2012, in the amount of two percent (2%) of the lesser of either the teacher’s retirement allowance or the first twenty-five thousand dollars ($25,000) of the teacher’s retirement allowance. This one-time benefit adjustment shall be provided without regard to the retiree’s age or number of years since retirement.
(B) Notwithstanding the prior subsections of this section, for all present and former teachers, active and retired teachers, and beneficiaries receiving any retirement, disability, or death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year under this section for adjustments on and after January 1, 2016, and subject to subsection (g)(2) below, shall be equal to (I) multiplied by (II):
(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where:
(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the five-year average investment return of the retirement system determined as of the last day of the plan year preceding the calendar year in which the adjustment is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent (0%). The “five-year average investment return” shall mean the average of the investment returns of the most recent five (5) plan years as determined by the retirement board. In the event the retirement board adjusts the actuarially assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted either upward or downward in the same amount.
(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less than (0%) percent.
(II) is equal to the lesser of either the teacher’s retirement allowance or the first twenty- five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount to be indexed annually in the same percentage as determined under subsection (g)(1)(B)(I) above. The benefit adjustments provided by this subsection (g)(1)(B) shall be provided to all retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect, and for all other retirees the benefit adjustments shall commence upon the third anniversary of the date of retirement or the date on which the retiree reaches his or her Social Security retirement age, whichever is later.
(2) Except for teachers and/or beneficiaries of teachers who retired on or before June 30, 2012, the benefit adjustments under subsection (g)(1)(B) for any plan year shall be reduced to twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan year. Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, of exceeding eighty percent (80%) for the benefit adjustment to be reinstated for all teachers for such plan year shall be replaced with seventy-five percent (75%). In determining whether a funding level under this subsection (g)(2) has been achieved, the actuary shall calculate the funding percentage after taking into account the reinstatement of any current or future benefit adjustment provided under this section.
(3) Effective for teachers and/or beneficiaries of teachers who retired after June 30, 2012, or on or before June 30, 2015, the dollar amount in subsection (g)(1)(B)(II) of twenty-five thousand eight hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six dollars ($31,026) until the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on an aggregate basis, of exceeding eighty percent (80%) shall be replaced with seventy-five percent (75%).
(4) Effective for teachers and/or beneficiaries of teachers who have retired on or before July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) days following the enactment of the legislation implementing this provision, and a second one-time stipend of five hundred dollars ($500) in the same month of the following year. These stipends shall be payable to all retired teachers or beneficiaries receiving a benefit as of the applicable payment date and shall not be considered cost of living adjustments under the prior provisions of this section. (h)(1) Notwithstanding the provisions of subsection (g) of this section, beginning on January 1, 2026, and every January 1 thereafter, in addition to the provisions of this subsection, the defined benefit retirement allowance for all retired former teachers and all beneficiaries of retired teachers shall be adjusted and computed by multiplying the retirement allowance by the percentage of annual increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor Bureau of Labor Statistics for the third quarter of the prior calendar year. It is further provided, however, that the cost of living adjustment shall be either the CPI-U or three percent (3%), whichever is less. It is further provided, that the said adjustment shall be no less than zero percent (0.0%). Such adjustment shall be compounded into the retiree’s total retirement benefits each year. The new total retirement benefit as compounded shall be the basis for the CPI calculation each subsequent year.
(2) The adjustment described in subsection (h)(1) of this section shall be based on:
(i) The retirement benefit received by a retiree on January 1, 2026; or
(ii) For employees not receiving benefits at the time of the effective date of this subsection, upon their defined benefit retirement entitlement.
(3) The provisions of this subsection shall be deemed to apply prospectively only, and no retroactive benefit shall be awarded.
(4) The provisions of subsections (h)(1) and (h)(2) of this section providing for a cost of living allowance shall be covered by funds held by the employee retirement system of Rhode Island and shall not modify nor increase the amount by which public employers that participate in the employee retirement system of Rhode Island contribute to that system.
(5) The provisions of this subsection shall sunset and expire on July 1, 2035.
SECTION 3. Section 45-21-2 of the General Laws in Chapter 45-21 entitled "Retirement of Municipal Employees" is hereby amended to read as follows: 45-21-2. Definitions. The following words and phrases as used in this chapter have the following meanings unless a different meaning is plainly required by the context:
(1) “Accumulated contributions” means the sum of all amounts deducted from the compensation of a member and credited to the member’s individual account in the members’ contribution reserve account.
(2) “Active member” means any employee of a participating municipality as defined in this section for whom the retirement system is currently receiving regular contributions pursuant to § 45-21-41, § 45-21-41.1, or § 45-21.2-14.
(3) “Actuarial reserve” means the present value of all payments to be made on account of any annuity, retirement allowance, or benefit, computed upon the basis of mortality tables adopted by the retirement board with regular interest.
(4) “Beneficiary” means any person in receipt of a retirement allowance, annuity, or other benefit as provided by this chapter.
(5) For purposes of this chapter, “domestic partner” shall be defined as a person who, prior to the decedent’s death, was in an exclusive, intimate, and committed relationship with the decedent, and who certifies by affidavit that their relationship met the following qualifications:
(i) Both partners were at least eighteen (18) years of age and were mentally competent to contract;
(ii) Neither partner was married to anyone else;
(iii) Partners were not related by blood to a degree which would prohibit marriage in the state of Rhode Island;
(iv) Partners resided together and had resided together for at least one year at the time of death; and
(v) Partners were financially interdependent as evidenced by at least two (2) of the following:
(A) Domestic partnership agreement or relationship contract;
(B) Joint mortgage or joint ownership of primary residence;
(C) Two (2) of: (I) Joint ownership of motor vehicle; (II) Joint checking account; (III) Joint credit account; (IV) Joint lease; and/or
(D) The domestic partner had been designated as a beneficiary for the decedent’s will, retirement contract, or life insurance.
(6) “Effective date of participation” means the date on which the provisions of this chapter have become applicable to a municipality accepting the provisions of the chapter in the manner stated in § 45-21-4.
(7) “Employee” means any regular and permanent employee or officer of any municipality, whose business time at a minimum of twenty (20) hours a week is devoted to the service of the municipality, including elective officials and officials and employees of city and town housing authorities. Notwithstanding the previous sentence, the term “employee,” for the purposes of this chapter, does not include any person whose duties are of a casual or seasonal nature. The retirement board shall decide who are employees within the meaning of this chapter, but in no case shall it deem as an employee any individual who annually devotes less than twenty (20) business hours per week to the service of the municipality and who receives less than the equivalent of minimum wage compensation on an hourly basis for their services, except as provided in § 45-21-14.1 [repealed]. Casual employees mean those persons hired for an occasional period or a period of emergency to perform special jobs or functions not necessarily related to the work of regular employees. Any commissioner of a municipal housing authority, or any member of a part-time state board commission, committee, or other authority is not deemed to be an employee within the meaning of this chapter. (8)(a) “Final compensation” for members who are eligible to retire on or prior to June 30, 2012, means the average annual compensation, pay, or salary of a member for services rendered during the period of three (3) consecutive years within the total service of the member when the average was highest, and as the term average annual compensation is further defined in § 36-8- 1(5)(a). For members eligible to retire on or after July 1, 2012, “final compensation” means the average of the highest five (5) consecutive years of compensation within the total service when the final compensation was the highest. For members eligible to and who retire on or after July 1, 2024, “final compensation” means the average of the highest three (3) consecutive years of compensation within the total service when the final compensation was the highest.
(b) For members who become eligible to retire on or after July 1, 2012, if more than one half (½) of the member’s total years of service consist of years of service during which the member devoted less than thirty (30) business hours per week to the service of the municipality, but the member’s average compensation consists of three (3) or more years during which the member devoted more than thirty (30) business hours per week to the service of a municipality, such member’s average compensation shall mean the average of the highest ten (10) consecutive years of compensation within the total service when the average compensation was the highest; provided however, effective July 1, 2015, if such member’s average compensation as defined in subsection
(a) above is equal to or less than thirty-five thousand dollars ($35,000), such amount to be indexed annually in accordance with § 45-21-52(d)(1)(B), such member’s average compensation shall mean the greater of: (i) The average of the highest ten (10) consecutive years of compensation within the total service when the average compensation was the highest; or (ii) The member’s average compensation as defined in subsection (a) above. To protect a member’s accrued benefit on June 30, 2012, under this subsection (8)(b), in no event shall a member’s average compensation be lower than his or her average compensation determined as of June 30, 2012. Notwithstanding the preceding provisions, in no event shall a member’s final compensation be lower than the member’s final compensation determined as of June 30, 2012.
(c) Notwithstanding the provisions of subsections (8)(a) and (8)(b) of this section, beginning on January 1, 2026, and every January 1 thereafter, the defined benefit retirement allowance for all retired municipal employees who are part of the employee retirement system of Rhode Island and all beneficiaries of retired municipal employees who were part of the employee retirement system of Rhode Island shall be adjusted and computed by multiplying the retirement allowance by the percentage of annual increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States Department of Labor Bureau of Labor Statistics for the third quarter of the prior calendar year. It is further provided, however, that the amount of the cost of living adjustment shall be either the CPI-U or three percent (3%), whichever is less. It is further provided, that the said adjustment shall be no less than zero percent (0.0%). Such adjustment shall be compounded into the retiree’s total retirement benefits each year. The new total retirement benefit as compounded shall be the basis for the CPI calculation each subsequent year.
(d) The adjustment described in subsection (8)(c) of this section shall be based on:
(1) The retirement benefit received by a retiree on January 1, 2026; or
(2) For employees not receiving benefits at the time of the effective date of this subsection, upon their defined benefit retirement entitlement.
(e) The provisions of subsection (8)(c) and (8)(d) of this section providing for a cost of living allowance shall be covered by funds held by the employee retirement system of Rhode Island and shall not modify nor increase the amount by which public employers that participate in the employee retirement system of Rhode Island contribute to that system. The provisions of this section shall sunset and expire on July 1, 2035.
(f) The provisions of this subsection shall be deemed to apply prospectively only, and no retroactive benefit shall be awarded.
(9) “Fiscal year” means the period beginning on July 1 in any year and ending on June 30 of the next succeeding year.
(10) “Full actuarial costs” or “full actuarial value” mean the lump sum payable by a member claiming service credit for certain employment for which payment is required, which is determined according to the age of the member and their annual rate of compensation at the time he or she applies for service credit, and which is expressed as a rate percent of the annual rate of compensation to be multiplied by the number of years for which the member claims the service credit, as prescribed in a schedule adopted by the retirement board, from time to time, on the basis of computation by the actuary. Except as provided in §§ 16-16-7.1, 36-5-3, 36-9-31, 36-10-10.4, and 45-21-53: (i) All service credit purchases requested after June 16, 2009, and prior to July 1, 2012, shall be at full actuarial value; and (ii) All service credit purchases requested after June 30, 2012, shall be at full actuarial value which shall be determined using the system’s assumed investment rate of return minus one percent (1%).
(11) “Governing body” means any and all bodies empowered to appropriate monies for, and administer the operation of, the units as defined in subdivision (13) of this section.
(12) “Member” means any person included in the membership of the retirement system as provided in § 45-21-8.
(13) “Municipality” means any town or city in the state of Rhode Island, any city or town housing authority, fire, water, sewer district, regional school district, public building authority as established by chapter 14 of title 37 [repealed], or any other municipal financed agency to which the retirement board has approved admission in the retirement system.
(14) “Participating municipality” means any municipality which has accepted this chapter, as provided in § 45-21-4.
(15) “Prior service” means service as a member rendered before the effective date of participation as defined in this section, certified on the member’s prior service certificate, and allowable as provided in § 45-21-15.
(16) “Regular interest” means interest at the assumed investment rate of return, compounded annually, as may be prescribed from time to time by the retirement board.
(17) “Retirement allowance” or “annuity” means the amounts paid to any member of the municipal employees’ retirement system of the state of Rhode Island, or a survivor of the member, as provided in this chapter. All retirement allowances or annuities shall be paid in equal monthly installments for life, unless otherwise specifically provided.
(18) “Retirement board” or “board” means the state retirement board created by chapter 8 of title 36.
(19) “Retirement system” means the “municipal employees’ retirement system of the state of Rhode Island” as defined in § 45-21-32.
(20) “Service” means service as an employee of a municipality of the state of Rhode Island as defined in subdivision (7).
(21) “Total service” means prior service as defined in subdivision (15) plus service rendered as a member on or after the effective date of participation.
(22) Any term not specifically defined in this chapter and specifically defined in chapters 8 through 10 of title 36 shall have the same definition as set forth in chapters 8 through 10 of title 36.
SECTION 4. This act shall take effect upon passage.
