Settlement Agreement

EXHIBIT 1 SETTLEMENT AGREEMENT This Settlement Agreement is made and entered into as of the ____ day of _______, 2015 by and among each Plaintiff listed on Exhibit A annexed hereto and made a part hereof (individually, a “Plaintiff” and collectively the “Plaintiffs”); Gina Raimondo in her capacity as Governor of the State of Rhode Island and not individually (the “Governor”); Seth Magaziner in his capacities as General Treasurer of the State of Rhode Island and Chairperson of the Rhode Island Retirement Board and not individually (the “Treasurer”); Frank J. Karpinski in his capacity as Secretary to the Retirement Board and not individually (the “Secretary”); Employees’ Retirement System of the State of Rhode Island (“ERSRI”); and the Rhode Island Retirement Board (the “Board”) (the Governor, the Treasurer, the Secretary, ERSRI and the Board are sometimes hereinafter referred to collectively as the “State Defendants”); and the Town of Barrington, the Barrington School Department, the Town of Bristol, the Town of Burrillville, the City of Central Falls, the Town of Cumberland, the Cumberland Fire District, the Town of East Greenwich, the City of East Providence, the Town of Foster, the Town of Glocester, the Town of Johnson, the Johnston School Committee, the Town of Middletown, the Town of New Shoreham, the Town of North Kingstown, the Town of North Providence, the North Providence Housing Authority, the Town of North Smithfield, the City of Pawtucket, the Town of Richmond, the Town of Smithfield, the Town of South Kingstown, the Town of Tiverton, the Town of Warren, the Town of West Greenwich, the Town of Woonsocket and the City of Cranston (collectively, the “Municipal Entities”) (the Plaintiffs, the State Defendants and the Municipal Entities are sometimes hereinafter referred to collectively as the “Parties”). W I T N E S S E T H: WHEREAS, Plaintiffs listed as numbers 1 through 11 inclusive on Exhibit A commenced a civil action in the Rhode Island Superior Court (the “Court”) against the State Defendants (C.A. No. PC12-3166) requesting injunctive, declaratory and other relief to prohibit the implementation of Public Law 2011 Chapters 408 and 409, otherwise known as the Rhode Island Retirement Security Act of 2011 (“RIRSA”) as it relates to retirement benefits of already retired Rhode Island public employees; and WHEREAS, Plaintiffs listed as numbers 12 through 78 inclusive on Exhibit A commenced a civil action in the Court against the State Defendants (C.A. No. PC12-3167) requesting injunctive, declaratory and other relief to prohibit the implementation of RIRSA as it relates to retirement benefits of active Rhode Island municipal general employees; and WHEREAS, Plaintiffs listed as numbers 79 through 159b inclusive on Exhibit A commenced a civil action in the Court against the State Defendants (C.A. No. PC12-3168) requesting injunctive and other equitable relief and for declaratory judgment to prohibit the implementation of RIRSA as it relates to employees of the State of Rhode Island and public school teachers; and WHEREAS, Plaintiffs listed as numbers 177 through 197 inclusive on Exhibit A (as well as Cranston Fire Fighters IAFF Local 1363, which is not a party to this Agreement), commenced a civil action in the Court against the State Defendants (C.A. No. PC12-3579) requesting injunctive, declaratory and other relief to prohibit the implementation of RIRSA as it relates to retirement benefits of active Rhode Island municipal fire fighters; and WHEREAS, Plaintiffs listed as numbers 198 through 205 inclusive on Exhibit A commenced a civil action in the Court against the State Defendants (C.A. No. PC 10-2859) 2 requesting injunctive and other equitable relief and for declaratory judgment with respect to Rhode Island Public Law 2009 Chapter 68 and Rhode Island Public Law 2010 Chapter 23, Article 16; and WHEREAS, Municipal Defendants listed as numbers 206 through 266 inclusive on Exhibit A were joined as indispensable parties in C.A. PC 12-3166 as a result of the Court’s decision on the State Defendants’ Motion to Join Municipal Entities as Indispensable Parties and/or Parties Whose Rights May be Affected by the Declarations Sought dated August 4, 2014 and the Court’s September 5, 2014 Order granting the State Defendants’ Motion for Reconsideration and/or Clarification of this Court’s August 4, 2014 Decision; WHEREAS, Municipal Defendants listed as numbers 267 through 304 inclusive on Exhibit A were joined as indispensable parties in C.A. PC 12-3167 as a result of the Court’s decision on the State Defendants’ Motion to Join Municipal Entities as Indispensable Parties and/or Parties Whose Rights May be Affected by the Declarations Sought dated August 4, 2014; WHEREAS, Municipal Defendants listed as numbers 305 through 327 inclusive on Exhibit A were joined as indispensable parties in C.A. PC 12-3579 as a result of the Court’s decision on the State Defendants’ Motion to Join Municipal Entities as Indispensable Parties and/or Parties Whose Rights May be Affected by the Declarations Sought dated August 4, 2014; WHEREAS, Municipal Defendants listed as numbers 209, 211, 213, 214, 215, 220, 224, 228, 231, 237, 239, 244, 248, 250, 251, 252, 255, 259, 262, 263, 269, 271, 273, 278, 280, 281, 290, 292 and 296 on Exhibit A have been dismissed from the case with prejudice, which were granted by the Court, and therefore, such Municipal Defendants are no longer parties to C.A. PC 12-3166, C.A. PC 12-3167, or C.A. PC 12-3579; 3 WHEREAS, the above civil actions are hereinafter referred to collectively as the “Lawsuits” and the complaints referenced above initiating the Lawsuits are hereinafter referred to collectively as the “Complaints;” and WHEREAS, the Parties have agreed upon a settlement of the Lawsuits and desire to commit their agreement to writing. NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the Parties agree as follows: 1. Class Action Complaint. Immediately following the execution of this Settlement Agreement, Plaintiffs will cause to be filed a Class Action Complaint for settlement purposes only. (a) Simultaneously with the filing of the Class Action Complaint, Plaintiffs to the Class Action Complaint will file a Motion for Class Certification of certain plaintiff and defendant classes and for preliminary approval of a class settlement pursuant to Rule 23(b)(1) and/or Rule 23(b)(2) of the Rhode Island Rules of Civil Procedure. (b) In the event the Motion for Class Certification is granted pursuant to Rule 23(b)(1) and/or Rule 23(b)(2), the Parties will submit for the Court’s approval, an order providing that any settlement of the Lawsuits will be binding on all class members and no class member will be entitled to elect not to participate under Rule 23(b)(1) and/or Rule 23(b)(2). 2. (a) Condition Precedent – Court Approval. This Settlement is subject to certification of the class action by the Court and approval by the Court following notice to class members and a “fairness hearing” after which the Court will decide whether to approve this Settlement. The Parties agree that they shall consult with one another to ensure, to the fullest 4 extent practicable, that all Court filings and other documents of any party to effectuate the Settlement are assented to or approved by all Parties hereto. (b) Condition Precedent – Legislative Approval. Attached hereto and made a part hereof as Exhibit B is a term sheet setting forth the economic terms of the settlement and attached hereto and made a part hereof as Exhibit C is an Act Relating to Public Officers and Employees (the “Legislation”) which, if enacted, would amend Rhode Island Retirement Security Act to effectuate the terms of the Settlement set forth in Exhibit B (the “Settlement”). The Parties acknowledge that enactment of the Legislation can only be effected by action of the Rhode Island General Assembly. The Settlement is expressly conditioned on enactment of the Legislation attached as Exhibit C, provided that a change to the Legislation that solely addresses funding by the state and has no impact on levels of employee contributions or levels of employee benefits as set forth in the Legislation attached as Exhibit C shall not be a violation of this provision and provided further that a change to the Legislation that includes other participants in ERSRI or MERS on terms no different than those provided to Plaintiffs in the State’s final offer of March 13, 2015, attached hereto as Exhibit E, shall not be a violation of this provision. (c) Failure of Conditions Precedent. If the class action is not certified by the Court, or if the proposed settlement is rejected by the Court after a fairness hearing, or if the Legislation as defined in Paragraph 2(b) is not enacted by the General Assembly, the Parties will dismiss the Class Action Complaint without prejudice and return to non-class litigation, without prejudice as to their respective rights again to seek class certification or not to do so in connection with the respective litigations. Employers, including the Municipal Defendants, shall make payroll changes in anticipation of a July 1, 2015 effective date, however, in the event of a failure of the conditions precedent, employers, including the Municipal Defendants, shall have 5 until August 15, 2015 to implement any necessary payroll corrections, and the Parties will cooperate with the employers and take any reasonable steps necessary to implement those corrections. 3. Covenants. Through this Settlement Agreement, the Parties intend to fully and finally resolve any and all matters with respect to the Lawsuits. Accordingly, each of the Parties covenant and agree that from and after the date hereof through and including final approval of the settlement and enactment of the Legislation and entry of judgment in the form contemplated by and set forth in Exhibit D (except as to 3(c) and 3(d) which are unlimited as to time): (a) They will work diligently in good faith and with all due speed to support and accomplish in all respects the Settlement in accordance with the provisions of this Agreement. (b) They will not, directly or indirectly, propose, support, encourage or advocate for any legislative action concerning or relating to retirement benefits other than the adoption of the Legislation. (c) They will not, directly or indirectly, propose, support, encourage and/or advocate that any other person, firm or entity do anything or refrain from doing something that a party to this Settlement Agreement would be prohibited from doing or refraining from doing hereunder. (d) Each of the Organizational Plaintiffs and the Plaintiff classes certified by the Court shall be bound by the judgment entered by the Court and shall be foreclosed from filing, maintaining and/or supporting (financially or otherwise) in a court, arbitration, administrative proceeding or any other kind of legal proceeding any suit, claim, grievance, unfair labor practice or any other action or challenges of any kind whatsoever to RIRSA, or to the changes imposed by RIRSA (as enacted in 2011) and/or 2009 and 2010 legislative retirement changes (collectively “Actions”), and any such Actions existing at the date of the enactment of the Legislation shall be 6 dismissed, including claims that were raised or could have been raised in the Lawsuits and/or Actions or challenges of any kind whatsoever with respect to this Settlement and the Legislation, except for any action to enforce the terms of the Settlement set forth herein. Moreover, the Parties will not support (financially or otherwise) any such Actions pursued by any non-settling party or parties in the Lawsuits. 4. Representations and Warranties and Acknowledgments. Each of the Parties represents and warrants that his, her or its respective signatories is of legal age and has the necessary authority to execute this Settlement Agreement. The Parties acknowledge that they have read this entire Settlement Agreement including the Legislation, understand the terms and effects thereof and have consulted with independent counsel in relation thereto. The Parties acknowledge that they have freely and voluntarily entered into this Settlement Agreement. 5. (a) Pre-judgment Violation. Should the provisions of this Settlement Agreement be violated by any party or should any party believe that any of the Parties (or other person making such covenant) has breached its, his or her covenants hereunder, then upon notice by a non-breaching party to the party or person in breach and to all Parties to this Agreement, the Parties consent to the Court’s jurisdiction and authority to hold a hearing to determine whether such breach occurred, and, if so, the appropriate remedy for such breach, which may include, but not be limited to, sanctions, fines, damages, equitable relief and in the event of a knowing, willful and material breach, the Parties acknowledge and agree that the Court may enter an order of contempt; and if the Court determines that such breach violates the essence of this Settlement Agreement so as to defeat its purpose, the Court may void this Settlement Agreement and this Settlement Agreement shall then terminate and be of no further force and effect, the Parties shall 7 cause to be filed a motion to terminate the class action; in such event the Lawsuits shall continue as non-class action suits. (b) Post-judgment Violation. Upon and after the entry of judgment, should the provisions of this Settlement Agreement be violated by any party or should any party believe that any of the Parties (or other person making such covenant) has breached its, his or her covenants hereunder, then upon notice by a non-breaching party to the party or person in breach and to all Parties to this Agreement, the Parties consent to the Court’s jurisdiction and authority to hold a hearing to determine whether such breach occurred, and, if so, the appropriate remedy for such breach, which may include, but not be limited to sanctions, fines, damages, equitable relief but shall not include relief to void this Settlement Agreement or to vacate the judgment theretofore entered. 6. Miscellaneous. (a) This Settlement Agreement is made and entered into in the State of Rhode Island and shall be governed by and construed in accordance with the laws of that State without reference to its conflict of laws principles. (b) The Settlement has been negotiated among the Parties and this Settlement Agreement has been drafted jointly by representatives of the Parties and shall not be construed for or against any of them by reason of authorship. (c) This Settlement Agreement sets forth the entire agreement and understanding among the Parties with respect to the subject matter hereof and merges any and all discussions, negotiations, or agreements in principle among them. No party shall be bound by any conditions, warranties, understandings or representations with respect to such subject matter 8 other than as expressly provided herein, or as duly set forth on or subsequent to the date hereof in writing and signed by a duly authorized signatory of each party. (d) This Settlement Agreement shall be binding upon and shall inure to the exclusive benefit of the Parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns. (e) Nothing in this Settlement Agreement or the Final Judgment to be entered by the Court shall be construed or interpreted to resolve, determine, or foreclose disputes now pending or hereinafter asserted by individual Plaintiff class members concerning the accuracy of calculation of retirement credits, benefits, or eligibility consistent with the terms of RIRSA, as amended by the Legislation. (f) Nothing contained in this Settlement Agreement or the Final Judgment to be entered by the Court, or omitted therefrom, shall constitute or be deemed a release by the Municipal Entities, or a covenant by the Municipal Entities against the pursuit, of any current or future claims or disputes between any of the Municipal Entities, on the one hand, and ERSRI and its agents, on the other hand, concerning the administration of the Municipal Employees Retirement System, all such claims and disputes being expressly reserved hereby and not waived. (g) Notice by mail to Plaintiff class: The Parties agree that the Retirement Board shall identify and forward by first class mail, postage prepaid in accordance with its existing mailing lists a copy of the Notice of Class Action Lawsuit and Proposed Settlement as approved by the Court. In addition to the mailing lists, public notice will be published in the Providence Journal or such other publication required by the Court. 9 (h) Notice by mail to Municipal Defendant class: The Parties agree that the Retirement Board shall identify and forward by first class mail, postage prepaid, to each municipal entity participating in MERS a copy of the Notice of Class Action Lawsuit and Proposed Settlement as approved by the Court. (i) The Parties agree that all expenses of Notices by mail, publication, or such other method as directed by the Court shall be borne by the ERSRI and/or the Governor and Treasurer. (j) Upon and following entry of judgment in accordance herewith, only the following terms shall remain in full force and effect: the covenants contained in paragraphs 3(c) and 3 (d); the post-judgment provisions of paragraph 5(b), and the terms set forth in paragraphs 6 (d), (e) and (f). All other terms shall be deemed to have terminated upon the entry of judgment. 7. Execution by Counterparts. Each of the Parties agree that this Settlement Agreement may be executed in counterparts and by each party hereto under separate counterpart, all of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Each of the Parties further agree that delivery of an executed counterpart of a signature page to this Settlement Agreement by telecopier, facsimile or email transmission shall be effective as delivery of a manually executed counterpart of this Settlement Agreement. IN WITNESS WHEREOF, the Parties have executed this Settlement Agreement as of the date first written above. 10 Name: Gina M. Raimondo Title: Governor of the State of Rhode Island Name: Seth Magaziner Title: General Treasurer of the State of Rhode Island Employees’ Retirement System of the State of Rhode Island, Retirement Board By: Name: Seth Magaziner Title: Chairperson By: Name: Frank J. Karpinski Title: Secretary Town of Barrington, the Barrington School Department, the Town of Bristol, the Town of Burrillville, the City of Central Falls, the Town of Cumberland, the Cumberland Fire District, the Town of East Greenwich, the City of East Providence, the Town of Foster, the Town of Glocester, the Town of Johnson, the Johnston School Committee, the Town of Middletown, the Town of New Shoreham, the Town of North Kingstown, the Town of North Providence, the North Providence Housing Authority, the Town of North Smithfield, the City of Pawtucket, the Town of Richmond, the Town of Smithfield, the Town of South Kingstown, the Town of Tiverton, the Town of Warren, the Town of West Greenwich and the Town of Woonsocket By: Name: Their Attorneys 11 The City of Cranston By: Name: Its Attorney 12 EXHIBIT A Plaintiffs 1. 1a. Rhode Island Public Employees’ Retiree Coalition 1b. AFSCME, Council 94 Retiree Chapter 2. 2a.NEARI – Retired 2 b. RI AFT/R Local 8037 3. Rhode Island Retired Teachers Association 4. Rhode Island Association of Retired Principals 5. Rhode Island Laborers’ Retiree Council 6. David Florio 7. James Gillis 8. Carol Keiser 9. Mark Kurtzman 10. Mary Ann Parker 11. Anthony Piccirilli 12. Bristol/Warren Regional School Employees Local 581, AFSCME , Council 94, AFL-CIO 13. Bristol Civilian Police Department Employees Local 1853, AFSCME, Council 94, AFL-CIO 14. Bristol Sewer Employees, Local 1853, AFSCME, Council 94, AFL-CIO 15. Burrillville Town Employees Union, Local 186, AFSCME, Council 94, AFL-CIO 16. Burrillville School Department Employees, Local 2231, AFSCME, Council 94, AFL-CIO 17. Central Falls City & School Employees, Local 1627, AFSCME, Council 94, AFL-CIO 18. Cranston School Secretarial Employees, Local 2044, AFSCME, Council 94, AFL-CIO 19. East Providence School Employees, Local 2969, AFSCME, Council 94, AFL-CIO 20. East Providence Managerial & Technical Employees, Local 3223, AFSCME Council 94 21. Exeter-West Greenwich School Department Employees, Local 2636, AFSCME, Council 94, AFL-CIO 22. Hopkinton Town Employees, Local 3163, AFSCME, Council 94, AFL-CIO 23. Johnstown [sic] Town Employees, Local 1491, AFSCME, Council 94, AFL-CIO 24. Middletown School Employees, Local 1823, AFSCME, Council 94, AFL-CIO 25. Newport City Employees, Local 911, AFSCME, Council 94, AFL-CIO 26. Newport School Department Employees, Local 841, AFSCME, Council 94, AFL-CIO 27. New Shoreham Town & School Employees, Local 2855, AFSCME, Council 94, AFL-CIO 28. North Providence Public Works Department Employees, Local 1491-1, AFSCME, Council 94, AFL-CIO 29. North Smithfield Town Employees, Local 937, AFSCME, Council 94, AFL-CIO 30. Pawtucket City Employees, Local 1012, AFSCME, Council 94, AFL-CIO 31. Pawtucket School Employees, Local 1352, AFSCME, Council 94, AFL-CIO 32. Pawtucket Professional & Technical Employees, Local 3960, AFSCME, Council 94, AFL-CIO 33. South Kingstown Town Employees, Local 1612, AFSCME, Council 94, AFL-CIO 34. South Kingstown School Employees, Local 3125, AFSCME, Council 94, AFL-CIO 35. Tiverton School Employees, Local 2670, AFSCME, Council 94, AFL-CIO 36. Tiverton Town Employees, Local 2670-1, AFSCME, Council 94, AFL-CIO 37. West Warwick Housing Authority, Local 2045-1, AFSCME, Council 94, AFL-CIO 38. Woonsocket City Employees, Local 670, AFSCME, Council 94, AFL-CIO 39. Woonsocket School Employees, Local 1137, AFSCME, Council 94, AFL-CIO 40. Woonsocket Professional & Technical Employees, Local 3851, AFSCME, Council 94, AFL-CIO 41. Barrington Educational Support Staff Team, NEARI, Local 868, AFL-CIO 2 42. Independent Cumberland School Employees, NEARI, Local 863 43. East Greenwich Municipal Employees’ Association, NEARI, Local 851 44. East Greenwich Educational Support Professionals, NEARI, Local 856 45. East Greenwich Custodial and Maintenance Employees, NEARI, Local 811 46. East Providence Teachers’ Assistants, NEARI, Local 896 47. East Providence Secretaries Association, NEARI, Local 89 48. Foster Educational Support Professionals, NEARI 49. Glocester Educational Support Professionals, NEARI, Local 857 50. Jamestown Educational Support Professionals, NEARI, Local 824 51. Little Compton Municipal Employees Association, NEARI, Local 860 52. Little Compton Educational Support Professionals, NEARI, Local 862 53. Middletown Auxiliary School Personnel, NEARI, Local 853 54. Middletown Municipal Employees’ Association, NEARI, Local 869 55. Narragansett Educational Support Professionals, NEAR,I Local 885 56. Newport Municipal Employee, NEARI, Local 840 57. North Kingstown Educational Support Professionals, NEARI, Local 864 58. North Smithfield Educational Support Professionals, NEARI, Local 854 59. Ponaganset Educational Support Professionals, NEARI, Local 858 60. Portsmouth Municipal Employees’ Association, NEARI, Local 871 61. Scituate Paraprofessionals, NEARI, Local 804 62. Smithfield Educational Support Professionals, NEARI, Local 891 63. South Kingstown Educational Support Professionals, NEARI, Local 890 64. South Kingstown Municipal Employees’ Association, NEARI, Local 826 65. Woonsocket Teacher Assistants, RIFTHP, AFL-CIO, Local 951 66. Cranston Teacher Assistants RIFTHP, AFL-CIO, Local 1704 3 67. North Providence Educational Workers RIFTHP, AFL-CIO, Local 2435 68. Northern Rhode Island Collaborative Employees’ Union, Local 4940 69. Rhode Island Laborers’ District Council, Local Union 808 70. Rhode Island Laborers’ District Council, Local Union 1033 71. Rhode Island Laborers’ District Council, Local Union 1217 72. Rhode Island Laborers’ District Council, Local Union 1322 73. National Association of Government Employees, Local 153 74. National Association of Government Employees, Local 68 75. National Association of Government Employees, Local 69 76. National Association of Government Employees, Local 97 77. International Brotherhood of Police Officers, Local 472 78. International Brotherhood of Police Officers, Local 555 79. Boys & Girls Training School, Local 314, AFSCME, Council 94, AFL-CIO 80. University of RI, Local 528, AFSCME, Council 94, AFL-CIO 81. Veterans Home, Local 904, AFSCME, Council 94, AFL-CIO 82. NBC/Blackstone Valley Facility, Local 1010, AFSCME, Council 94, AFL-CIO 83. Department of Transportation, Local 1245, AFSCME, Council 94, AFL-CIO 84. RI Class, Local 1293, AFSCME, Council 94, AFL-CIO 85. Medical Center, Local 1350, AFSCME, Council 94, AFL-CIO 86. RI Family Court, Local 2203, AFSCME, Council 94, AFL-CIO 87. Med. Ctr. Physical Plant & Mgmt. Services, Local 2392, AFSCME, Council 94, AFL-CIO 88. Deputy Sheriffs Local 2409, AFSCME, Council 94, AFL-CIO 89. Department of Administration, Local 2448, AFSCME, Council 94, AFL-CIO 90. Department of Labor & Training, Local 2869, AFSCME, Council 94, AFL-CIO 91. Department of Health, Local 2870, AFSCME, Council 94, AFL-CIO 4 92. Department of Education, Local 2872, AFSCME, Council 94, AFL-CIO 93. Rhode Island Airport Corporation, Local 2873, AFSCME, Council 94, AFL-CIO 94. Registry of Motor Vehicles, Local 2874, AFSCME, Council 94, AFL-CIO 95. Dept. of Children, Youth & Families, Local 2876, AFSCME, Council 94, AFL-CIO 96. URI Professional/Technical Administrative, Local 2877, ASFCME, Council 94, AFL-CIO 97. Rhode Island College Security & Facilities, Local 2878, AFSCME, Council 94, AFL-CIO 98. Rhode Island College Clerical, Local 2879, AFSCME, Council 94, AFL-CIO 99. Department of Environmental Management, Local 2881, AFSCME, Council 94, AFL-CIO 100. Department of Human Services, Local 2882, AFSCME, Council 94, AFL-CIO 101. MHRH (Supervisory), Local 2883, AFSCME, Council 94, AFL-CIO 102. Amalgamated, Local 2884, AFSCME, Council 94, AFL-CIO 103. Executive/Military Staff, Local 2886, AFSCME, Council 94, AFL-CIO 104. NEA Barrington, Local 801, NEARI 105. Bristol/Warren EA, Local 802, NEARI 106. Burrillville EA, Local 803, NEARI 107. NEA Chariho, Local 898, NEARI 108. Cumberland Teachers, Local 808, NEARI 109. Davies Faculty, Local 875, NEARI 110. East Greenwich Ed. Assoc., Local 809, NEARI 111. East Providence Ed. Assoc., Local 810, NEARI 112. Exeter/West Greenwich Tch. Assoc., Local 987, NEARI 113. Foster Teachers Assoc., Local 812, NEARI 114. Glocester Teachers Assoc., Local 813, NEARI 115. Jamestown Teachers Assoc., Local 815, NEARI 116. Little Compton Teachers Assoc., Local 818, NEARI 5 117. NEA Middletown, Local 819, NEARI 118. NEA Narragansett, Local 820, NEARI 119. Teachers Assn. of Newport, Local 821, NEARI 120. New Shoreham Teacher Assoc., Local 822, NEARI 121. NEA North Kingstown, Local 823, NEARI 122. North Smithfield Teacher Assoc., Local 825, NEARI 123. NEA Ponaganset, Local 899, NEARI 124. NEA Portsmouth, Local 827, NEARI 125. RI School For The Deaf Teacher Assoc., Local 841, NEARI 126. Scituate Teachers Assoc., Local 830, NEARI 127. NEA Smithfield, Local 831, NEARI 128. NEA South Kingstown, Local 832, NEARI 129. NEA Tiverton, Local 833, NEARI 130. Westerly Teachers Assoc., Local 836, NEARI 131. CCRI/NEARI ESPA, Local 852, NEARI 132. CCRI Faculty Assn., Local 872, NEARI 133. CCRI/PSA, Local 893, NEARI 134. RI Dept of Health PSA, Local 859, NEARI 135. URI/ACT, Local 879, NEARI 136. URI Physicians, Local 877, NEARI 137. URI/PSA, Local 888, NEARI 138. RI School For The Deaf Teacher Asst., Local 884, NEARI 139. Davies Teacher Asst., Local 867, NEARI 140. Warwick Teachers Union, Local 915, RIFTHP 141. North Providence Federation of Teachers, Local 920, RIFTHP 6 142. Pawtucket Teachers Alliance, Local 930, RIFTHP 143. Woonsocket Teachers Guild, Local 951, RIFTHP 144. Providence Teachers Union, Local 958, RIFTHP 145. West Warwick Teachers Alliance, Local 1017, RIFTHP 146. Coventry Teachers Alliance, Local 1075, RIFTHP 147. Lincoln Teachers Association, Local 1461, RIFTHP 148. Central Falls Teachers Union, Local 1567, RIFTHP 149. Johnston Federal of Teachers, Local 1702, RIFTHP 150. Cranston Teachers Alliance, Local 1704, RIFTHP 151. Northern Rhode Island Collaborative Educational Union, Local 4940, RIFTHP 152. Howard Union of Teachers, Local 1171, RIFTHP 153. RI Court Reporters Alliance, Local 4829, RIFTHP 154. RI Dept of Education, Local 2012, RIFTHP 155. Rhode Island Brotherhood of Correctional Officers 156. International Federation of Professional and Technical Engineers Local 400 157. National Association of Government Employees/International Brotherhood of Police Officers Local 79 158. Rhode Island Employment Security Alliance, Local 401 159. Rhode Island Alliance of Social Service Employees, Local 580 159a. Rhode Island Laborers’ District Council Local Union 808 insofar as said Local Union serves as the certified bargaining representative for various State employees employed by the State of Rhode Island 159b. Rhode Island Laborers’ District Council Local Union 1033 insofar as said Local Union serves as the certified bargaining representative for various State employees employed by the State of Rhode Island 160 through 176 intentionally omitted 7 177. Woonsocket Fire Fighters, IAFF Local 732, AFL-CIO 178. North Kingstown Fire Fighters, IAFF Local 1651, AFL-CIO 179. Tiverton Fire Fighters, IAFF Local 1703, AFL-CIO 180. Barrington Fire Fighters, IAFF Local 1774, AFL-CIO 181. Middletown Fire Fighters, IAFF Local 1933, AFL-CIO 182. Johnston Fire Fighters, IAFF Local 1950, AFL-CIO 183. Smithfield Fire Fighters, IAFF Local 2050, AFL-CIO 184. North Providence Fire Fighters, IAFF Local 2334, AFL-CIO 185. North Cumberland Fire Fighters, IAFF Local 2722, AFL-CIO 186. Cumberland Rescue Service, IAFF Fire Fighters, Local 2725, AFL-CIO 187. Valley Falls Fire Fighters, IAFF Local 2729, AFL-CIO 188. Cumberland Hill Fire Fighters, IAFF Local 2762, AFL-CIO 189. Lincoln Rescue and Fire Fighters, IAFF Local 3023, AFL-CIO 190. Hopkins Hill Fire Fighters, IAFF Local 4824, AFL-CIO 191. East Greenwich Fire Fighters, IAFF Local 3328, AFL-CIO 192. South Kingstown Emergency Medical Services, IAFF Local 3365, AFL-CIO 193. Coventry Fire Fighters, IAFF Local 3372, AFL-CIO 194. Foster Emergency Services, IAFF Local 3422, AFL-CIO 195. North Smithfield Fire Fighters, IAFF Local 3984, AFL-CIO 196. Cumberland Fire Fighters, IAFF Local 4114, AFL-CIO 197. West Greenwich Fire and Rescue, IAFF Local 4771, AFL-CIO 198. Rhode Island Council 94, AFSCME, AFL-CIO 199. National Education Association Rhode Island 200. Rhode Island Federation of Teachers and Health Professionals 8 201. Rhode Island Brotherhood of Correctional Officers 202. International Federation of Professional and Technical Engineers Local 400 203. National Association of Government Employees, Local 79 204. Rhode Island Employment Security Alliance, Local 401 205. Rhode Island Alliance of Social Service Employees, Local 580 Municipal Defendants 206. Town of Barrington 207. Barrington School Committee 208. Town of Bristol 209. Bristol/Warren Regional School Committee 210. Town of Burrillville 211. Burrillville School Committee 212. City of Central Falls 213. Central Falls School District 214. Central Falls Housing Authority 215. Chariho Regional School Committee 216. Coventry Housing Authority 217. Coventry School Committee 218. Coventry Fire District 219. City of Cranston 220. Cranston School Committee 221. Cumberland School Committee 222. Cumberland Housing Authority 223. Town of East Greenwich 224. East Greenwich School Committee 9 225. City of East Providence 226. East Providence Housing Authority 227. East Providence School Committee 228. Exeter-West Greenwich Regional School Committee 229. Town of Foster 230. Town of Glocester 231. Foster-Glocester Regional School Committee 232. Town of Hopkinton 233. Town of Jamestown 234. Town of Johnston 235. Johnston Housing Authority 236. Johnston School Committee 237. Lincoln School Committee 238. Lincoln Housing Authority 239. Middletown School Committee 240. City of Newport 241. Newport School Committee 242. Town of New Shoreham 243. Town of North Kingstown 244. North Kingstown School Committee 245. Town of North Providence 246. North Providence School Committee 247. North Providence Housing Authority 248. North Smithfield School Committee 249. City of Pawtucket 10 250. Pawtucket School Committee 251. Pawtucket Housing Authority 252. Portsmouth School Committee 253. Scituate School Committee 254. Town of Smithfield 255. Smithfield School Committee 256. Town of South Kingstown 257. South Kingstown School Committee 258. Town of Tiverton 259. Tiverton School Committee 260. Town of Warren 261. Town of West Greenwich 262. City of Warwick 263. West Warwick School Committee 264. West Warwick Housing Authority 265. City of Woonsocket 266. Woonsocket School Committee 267. The Barrington School Committee 268. The Town of Barrington 269. The Burrillville School Committee 270. The Town of Burrillville 271. The Central Falls School District 272. The Town of Charlestown 273. The Cranston School Committee 274. The City of Cranston 11 275. The Cranston Housing Authority 276. The Cumberland Housing Authority 277. The Town of East Greenwich 278. The East Greenwich School Committee 279. The East Providence Housing Authority 280. The Exeter-West Greenwich Regional School Committee 281. The Foster-Glocester Regional School Committee 282. The Glocester School Committee 283. The Town of Glocester 284. The Town of Hopkinton 285. The Jamestown School Committee 286. The Town of Jamestown 287. The Town of Middletown 288. The Town of New Shoreham 289. The Town of North Kingstown 290. The North Kingstown School Committee 291. The Town of North Smithfield 292. The Northern Rhode Island Collaborative 293. The Pawtucket Housing Authority 294. The Scituate School Committee 295. The Town of Smithfield 296. The Smithfield School Committee 297. The South Kingstown School Committee 298. The Town of South Kingstown 299. The Town of Tiverton 12 300. The Tiverton School Committee 301. The Warren Housing Authority 302. The West Warwick Housing Authority 303. The Woonsocket School Committee 304. The City of Woonsocket 305. The City of Woonsocket 306. The Town of North Kingstown 307. The Town of Tiverton 308. The Town of Barrington 309. The Town of Middletown 310. The Town of Johnston 311. The Town of Smithfield 312. The Town of North Providence 313. North Cumberland Fire District 314. The Town of Cumberland 315. Valley Falls Fire District 316. Cumberland Hill Fire District 317. The Town of Lincoln 318. Albion Fire District 319. The Town of East Greenwich 320. The Town of South Kingstown 321. Coventry Fire District 322. Central Coventry Fire District 323. The Town of Foster 324. North Smithfield Fire & Rescue 13 325. Cumberland Fire District 326. The Town of West Greenwich 327. Hopkins Hill Fire District 14 709744.v1 Exhibit OUTLINE OF TERMS FOR SETTLEMENT AGREEMENT The following terms are effective July 1, 2015, except as otherwise provided. I. Cost of Living Adjustment and Other Payments: A. One-Time COLA. Effective for participants and/or beneficiaries of participants who retired on or before June 30, 2012, a one-time COLA payment of 2% applied to first $25,000 of pension benefit and amount added to base (but will not affect indexing in #5 below) to be paid as soon as administratively reasonable following the passage of the legislation based on the amount of benefit payable on the effective date of the legislation. The one-time COLA will be paid to all participants in a COLA program and who retired on or before June 30, 2012, without regard to any other eligibility requirement (such as age or number of years since retirement). B. Annual COLAs. 1. Effective for all current and future retirees annual COLAs will be applied when plan funding level reaches 80% as measurement is set forth in RIRSA. For MERS each MERS unit will continue to be separately evaluated as to achievement of 80% funding level. For State employees and teachers, the 80% will continue to be calculated on an aggregate basis with Judicial Retirement Benefits Trust and State Police Retirement Benefits Trust. Payments under I(A) and I(C) do not depend on funding level. 2. For Funds which have not reached 80% funding level there will be a COLA calculation and payment, if any, due every four years until plans reach 80% funding, with clarification that first 4th year (for those pension Funds having not yet met 80% funding) will be the calendar year commencing January 2017. 3. Retirees who are in plans that are more than 80% funded and/or participants who retire after June 30, 2015, will have COLAs calculated on the first $25,000 of the benefit. Effective for participants and/or beneficiaries of participants who retired on or before June 30, 2015, the $25,000 COLA cap will be increased to $30,000 for any COLA payable in plans with less than 80% funding. 4. COLA Formula: 50% of COLA calculated using previous 5 year average of investment return under RIRSA (max of 4%), and 50% calculated using previous year’s CPI-U (max of 3%) for a total maximum COLA of 3.5%. Note: COLA Formula will be calculated annually, regardless of funding level and will never produce a number less than 0.0%. 5. COLA caps will be indexed every year, using previous RIRSA 5 year average of investment return for period July 1, 2012 to June 30, 2015, and COLA formula in #4 above commencing July 1, 2015. Indexing will take place annually commencing on January 1st, whether COLA is actually applied (based on funding level), or not applied. 6. COLA will be compounded for all receiving COLA (i.e., includes all MERS units entitled to COLA through MERS under RIRSA). C. Stipends. Effective for participants and/or beneficiaries of participants who have retired on or before July 1, 2015, (i) a one-time five hundred dollar ($500.00) stipend (not added to COLA base) shall be payable within sixty (60) days of July 1, 2015, and (ii) a second one-time five hundred dollar ($500.00) stipend (not added to COLA base) shall be payable in the same month of the following year to all retired participants and beneficiaries receiving a benefit as of the payment date. II. Terms Applicable to State Workers, Teachers and General MERS. In addition to the COLA benefits in I(B)(1)(2)(4)(5)(6): A. Accrual (applies to those actives with 20 years or more of service as of 6/30/12): 1. They will stay in the defined benefit plan. Effective July 1, 2015, the accrual increases to 2% per year. For this accrual, employees in general MERS will pay an additional 2.25% (new contribution amount will be either 8.25% or 9.25%). State workers and teachers will increase their contribution to 11%. 2. They will not participate in the defined contribution plan after June 30, 2015. They will continue to own the individual accounts created by RIRSA and funded through June 30, 2015. B. Retirement Age: All current and future employees shall be eligible to retire upon the attainment of age 65 with at least thirty (30) years of service, age 64 with at least thirty-one (31) years of service, age 63 with at least thirty-two (32) years of service, or age 62 with at least thirty-three (33) years of service, or, if earlier, under their eligible retirement date under RIRSA. C. Additional contributions by employer to defined contribution plan: 1. In cases where the person has at least 10 but fewer than 15 years of service as of 6/30/12: the employer will contribute 1.25% (3.25% for employees without Social Security) to the defined contribution plan [i.e., +0.25%] implemented for 2 future contributions as soon as administratively possible after passage of the legislation. 2. In cases where the person has at least 15 but fewer than 20 years of service as of 6/30/12: the employer will contribute 1.50% (3.5% for employees without Social Security) to the defined contribution plan [i.e., +0.50%] implemented for future contributions as soon as administratively possible after passage of the legislation. D. Fee waiver on defined contribution plan: Administration fee will be waived for those making $35,000 or less indexed using COLA formula effective July 1, 2012 (Fee is currently $40.00; the full amount will be waived, whether it continues to be $40.00 or not.). E. Part-time anti-spiking rule: If highest 5-year average salary calculation is less than $35,000 under RIRSA indexed using COLA formula, the pension will be based on the higher of the following two calculations:   III. Highest 10-year average earnings, or Highest 5-year average earnings with a $35,000 cap (indexed using COLA formula) Terms Applicable to MERS Firefighters (excluding Cranston fire). In addition to the COLA benefits in I(B)(1)(2)(4)(5)(6): A. Effective July 1, 2015 firefighters can retire with their full benefit if they are 50 years old and have at least 25 years of service or at any age if they have at least 27 years of service. Firefighters will pay an additional 2% employee contribution (that is, 9% for those not participating in MERS COLA, and 10% for those who do participate in MERS COLA) effective July 1, 2015. B. Effective July 1, 2015 firefighters who retire at age 57 with 30 years of service will accrue 2.25% per year for all years of service not already accrued at a higher rate. IV. Terms Applicable to Correctional Officers: Correctional officers with fewer than 25 years of service as of 6/30/12: Year 31 Year 32 Year 33 Year 34 Year 35 additional 1% accrual additional 1% accrual additional 1% accrual additional 1% accrual additional 1% accrual 3 V. Early Retirement Actuarial Reduction (RIRSA provides that employees with 20 or more years of total service and who have attained an age within 5 years of eligible retirement date may retire early subject to reduction in retirement allowance). Reduction (applicable to ALL categories of current employees) calculated as follows:      VI. Nine (9) percent Eight (8) percent Seven (7) percent Seven (7) percent Seven (7) percent Year 1 Year 2 Year 3 Year 4 Year 5 Re-amortization Option for Municipalities The amortization schedule applicable to employers participating in MERS commencing with fiscal year 2017 shall be extended to twenty-five (25) years in accordance with the statutory amortization methodology, provided that employers shall have the one-time option before August 1, 2015 to select no re-amortization or a re-amortization period shorter than twenty-five (25) years. The amortization schedule applicable to the municipal contribution responsibility for 60 percent of contributions to teacher pensions commencing with fiscal year 2017 shall be extended to twentyfive (25) years in accordance with the statutory amortization methodology. VII. Other than those proposed legislative changes, all other legislative provisions in existing RIRSA shall remain the same. 4 709746.v1 Exhibit 2015 -- H 0000 ======= LC00000 ======= STATE OF RHODE ISLAND IN GENERAL ASSEMBLY JANUARY SESSION, A.D. 2015 _____________ AN ACT RELATING TO PUBLIC OFFICERS AND EMPLOYEES – RETIREMENT SYSTEM— CONTRIBUTION AND BENEFITS Introduced By: Date Introduced: Referred To: It is enacted by the General Assembl y as follows: 1 SECTION 1. Legislative intent and findings. 2 SECTION 2. Section 36-8-1 of the General Laws in Chapter 36-8 entitled “Retirement 3 System-Administration” is hereby amended to read as follows: 4 § 36-8-1 Definition of terms. – The following words and phrases as used in chapters 8 to 5 10 of this title unless a different meaning is plainly required by the context, shall have the 6 following meanings: 7 8 (1) "Accumulated contributions" shall mean the sum of all the amounts deducted from the compensation of a member and credited to his or her individual pension account. 9 (2) "Active member" shall mean any employee of the state of Rhode Island as defined in 10 this section for whom the retirement system is currently receiving regular contributions pursuant to 11 §§ 36-10-1 and 36-10-1.1. 12 13 (3) "Actuarial equivalent" shall mean an allowance or benefit of equal value to any other allowance or benefit when computed upon the basis of the actuarial tables in use by the system. 14 (4) "Annuity reserve" shall mean the present value of all payments to be made on account 15 of any annuity, benefit, or retirement allowance granted under the provisions of chapter 10 of this 16 title computed upon the basis of such mortality tables as shall be adopted from time to time by the 17 retirement board with regular interest. 18 (5)(a) "Average compensation" for members eligible to retire as of September 30, 2009 1 shall mean the average of the highest three (3) consecutive years of compensation, within the total 2 service when the average compensation was the highest. For members eligible to retire on or after 3 October 1, 2009, "Average compensation" shall mean the average of the highest five (5) 4 consecutive years of compensation within the total service when the average compensation was the 5 highest. 6 (b) For members who become eligible to retire on or after July 1, 2012, if more than one 7 half (1/2) of the member's total years of service consist of years of service during which the 8 member devoted less than thirty (30) business hours per week to the service of the state, but the 9 member's average compensation consists of three (3) or more years during which the member 10 devoted more than thirty (30) business hours per week to the service of the state, such member's 11 average compensation shall mean the average of the highest ten (10) consecutive years of 12 compensation within the total service when the average compensation was the highest, provided 13 however, effective July 1, 2015, if such member’s average compensation as defined in paragraph 14 (a) above is equal to or less than thirty-five thousand dollars ($35,000), such amount to be indexed 15 annually in accordance with Section 36-10-35(h)(1)(B), such member’s average compensation 16 shall mean the greater of: (i) the average of the highest ten (10) consecutive years of compensation 17 within the total service when the average compensation was the highest, or (ii) the member’s 18 average compensation as defined in paragraph (a) above. To protect a member’s accrued benefit 19 on June 30, 2012 under this §36-8-1(5)(b), in no event shall a member’s average compensation be 20 lower than his or her average compensation determined as of June 30, 2012. 21 22 (6) "Beneficiary" shall mean any person in receipt of a pension, an annuity, a retirement allowance, or other benefit as provided by chapter 10 of this title. 23 24 (7) "Casual employee" shall mean those persons hired for a temporary period, a period of emergency or an occasional period. 25 (8) "Compensation" as used in chapters 8 – 10 of this title, chapters 16 and 17 of title 16, 26 and chapter 21 of title 45 shall mean salary or wages earned and paid for the performance of duties 27 for covered employment, including regular longevity or incentive plans approved by the board, but 28 shall not include payments made for overtime or any other reason other than performance of duties, 29 including but not limited to the types of payments listed below: 30 (i) Payments contingent on the employee having terminated or died; 31 (ii) Payments made at termination for unused sick leave, vacation leave, or compensatory 32 time; 33 (iii) Payments contingent on the employee terminating employment at a specified time in 34 the future to secure voluntary retirement or to secure release of an unexpired contract of 2 1 employment; 2 3 (iv) Individual salary adjustments which are granted primarily in anticipation of the employee's retirement; 4 5 (v) Additional payments for performing temporary or extra duties beyond the normal or regular work day or work year. 6 (9) "Employee" shall mean any officer or employee of the state of Rhode Island whose 7 business time is devoted exclusively to the services of the state, but shall not include one whose 8 duties are of a casual or seasonal nature. The retirement board shall determine who are employees 9 within the meaning of this chapter. The governor of the state, the lieutenant governor, the secretary 10 of state, the attorney general, the general treasurer, and the members of the general assembly, ex 11 officio, shall not be deemed to be employees within the meaning of that term unless and until they 12 elect to become members of the system as provided in § 36-9-6, but in no case shall it deem as an 13 employee, for the purposes of this chapter, any individual who devotes less than twenty (20) 14 business hours per week to the service of the state, and who receives less than the equivalent of 15 minimum wage compensation on an hourly basis for his or her services, except as provided in § 36- 16 9-24. Any commissioner of a municipal housing authority or any member of a part-time state, 17 municipal or local board, commission, committee or other public authority shall not be deemed to 18 be an employee within the meaning of this chapter. 19 (10) "Full actuarial costs" or "full actuarial value" shall mean the lump sum payable by a 20 member claiming service credit for certain employment for which that payment is required which 21 is determined according to the age of the member and the employee's annual rate of compensation 22 at the time he or she applies for service credit and which is expressed as a rate percent of the 23 employee's annual rate of compensation to be multiplied by the number of years for which he or 24 she claims service credit as prescribed in a schedule adopted by the retirement board from time to 25 time on the basis of computation by the actuary. Except as provided in §§ 16-16-7.1, 36-5-3, 36-9- 26 31, 36-10-10.4, 45-21-53, 36-10-8, 45-21-29, 8-3-16(b), 8-8-10.1(b), 42-28-22.1(b) and 28- 30- 27 18.1(b). 28 29 (i) all service credit purchases requested after June 16, 2009 and prior to July 1, 2012, shall be at full actuarial value and 30 (ii) all service credit purchases requested after June 30, 2012 shall be at full actuarial value 31 which shall be determined using the system's assumed investment rate of return minus one percent 32 (1%). 33 The rules applicable to a service credit purchase shall be the rules of the retirement system in effect 34 at the time the purchase application is submitted to the retirement system. 3 1 2 3 4 5 6 7 8 9 10 (11) “Funded Ratio” shall mean the ratio of the actuarial value of assets to the actuarial accrued liability consistent with the funding policy of the retirement board as defined in § 36-8-4. (11)(12) "Inactive member" shall mean a member who has withdrawn from service as an employee but who has not received a refund of contributions. (12)(13) "Members" shall mean any person included in the membership of the retirement system as provided in §§ 36-9-1 – 36-9-7. (13)(14) "Prior service" shall mean service as a member rendered before July 1, 1936, certified on his or her prior service certificate and allowable as provided in § 36-9-28. (14)(15) "Regular interest" shall mean interest at the assumed investment rate of return, compounded annually, as may be prescribed from time to time by the retirement board. 11 (15)(16) "Retirement allowance" shall mean annual payments for life made after retirement 12 under and in accordance with chapters 8 to 10 of this title. All allowances shall be paid in equal 13 monthly installments beginning as of the effective date thereof; provided, that a smaller pro rata 14 amount may be paid for part of a month where separation from service occurs during the month in 15 which the application was filed, and when the allowance ceases before the last day of the month. 16 17 18 19 20 21 (16)(17) "Retirement board" or "board" shall mean the board provided in § 36-8-3 to administer the retirement system. (17)(18) "Retirement system" shall mean the employees' retirement system of the state of Rhode Island as defined in § 36-8-2. (18)(19) "Service" shall mean service as an employee of the state of Rhode Island as described in subdivision (9) of this section. 22 (19)(20) "Social Security retirement age" shall mean a member's full retirement age as 23 determined in accordance with the federal Old Age, Survivors and Disability Insurance Act, not to 24 exceed age sixty-seven (67). 25 26 27 28 (20)(21) "Total service" shall mean prior service as defined above, plus service rendered as a member on or after July 1, 1936. SECTION 3. Section 36-10-1 of the General Laws in Chapter 36-10 entitled “Retirement System-Contributions and Benefits” is hereby amended to read as follows: 29 § 36-10-1 Member contributions – Deduction from compensation. – (a) Prior to July 1, 30 2012, each member of the retirement system shall contribute an amount equal to eight and three- 31 quarters percent (8.75%) of his or her compensation as his or her share of the cost of annuities, 32 benefits, and allowances. Effective July 1, 2012, each member of the retirement system shall 33 contribute an amount equal to three and three quarters percent (3.75%) of his or her compensation, 34 except for correctional officers as defined in § 36-10-9.2 who shall contribute an amount equal to 4 1 eight and three quarters percent (8.75%) of his or her compensation. Effective July 1, 2015, each 2 member of the retirement system, except for correctional officers as defined in § 36-10-9.2, with 3 twenty (20) or more years of total service as of June 30, 2012 shall contribute an amount equal to 4 eleven percent (11%) of compensation. The contributions shall be made in the form of deductions 5 from compensation. 6 (b) The deductions provided for herein shall be made notwithstanding that the minimum 7 compensation provided by law for any member shall be reduced thereby. Every member shall be 8 deemed to consent and agree to the deductions made and provided for herein and receipt of his or 9 her full compensation and payment of compensation, less the deductions, shall be a full and 10 complete discharge and acquittance of all claims and demands whatsoever for the services rendered 11 by the person during the period covered by the payment except as to the benefit provided under 12 this chapter. 13 14 SECTION 4. Section 36-10-2.1 of the General Laws in Chapter 36-10 entitled “Retirement System-Contributions and Benefits” is hereby amended to read as follows: 15 § 36-10-2.1 Actuarial cost method. – (a) To determine the employer contribution rate for 16 the State of Rhode Island for fiscal year 2002 and for all fiscal years subsequent, the actuary shall 17 compute the costs under chapter 10 of title 36 using the entry age normal cost method. Effective 18 July 1, 2012, the entry age normal cost method shall be as defined in Accounting Standard No. 27 19 of the Governmental Accounting Standards Board as in effect from time to time. 20 (b) The determination of the employer contribution rate for fiscal year 2013 shall include a 21 reamortization of the current Unfunded Actuarial Accrued Liability (UAAL) over a closed twenty- 22 five (25) year period. After an initial period of five (5) years, future actuarial gains and losses 23 occurring within a plan year will be amortized over individual new twenty (20) year closed 24 periods. 25 (c) The determination of the employer contribution rate commencing with fiscal year 2017 26 shall include a re-amortization of the current Unfunded Actuarial Accrued Liability (UAAL) 27 attributable to the sixty percent (60%) of contribution responsibility not partitioned to the state in § 28 16-16-22 over a closed twenty-five (25) year period. This will be accomplished by dividing the 29 UAAL as of June 30, 2014 into two separate amortization periods. Future actuarial gains and 30 losses occurring within a plan year will be amortized over individual new twenty (20) year closed 31 periods and allocated in the forty percent (40%) state / sixty percent (60%) municipal proportion 32 set forth in § 16-16-22. 33 34 SECTION 5. Section 36-10-9 of the General Laws in Chapter 36-10 entitled “Retirement System-Contributions and Benefits” is hereby amended to read as follows: 5 1 2 § 36-10-9 Retirement on service allowance – In general. – Retirement of a member on a service retirement allowance shall be made by the retirement board as follows: 3 (1)(a)(i) Any member may retire upon his or her written application to the retirement board 4 as of the first day of the calendar month in which the application was filed; provided, the member 5 was separated from service prior thereto; and further provided, however, that if separation from 6 service occurs during the month in which application is filed, the effective date shall be the first 7 day following that separation from service; and provided further that the member on his or her 8 retirement date attained the age of sixty (60) and completed at least ten (10) years of contributory 9 service on or before July 1, 2005 or who, regardless of age, has completed twenty-eight (28) years 10 of total service and has completed at least ten (10) years of contributory service on or before July 11 1, 2005, and who retire before October 1, 2009 or are eligible to retire as of September 30, 2009. 12 (ii) For members who become eligible to retire on or after October 1, 2009 and prior to July 13 1, 2012, benefits are available to members who have attained the age of sixty-two (62) and 14 completed at least ten (10) years of contributory service. For members in service as of October 1, 15 2009 who were not eligible to retire as of September 30, 2009 but become eligible to retire prior to 16 July 1, 2012, the minimum retirement age of sixty-two (62) will be adjusted downward in 17 proportion to the amount of service the member has earned as of September 30, 2009. The 18 proportional formula shall work as follows: 19 (1) The formula shall determine the first age of retirement eligibility under the laws in 20 effect on September 30, 2009 which shall then be subtracted from the minimum retirement age of 21 sixty-two (62). 22 23 24 25 (2) The formula shall then take the member's total service credit as of September 30, 2009 as the numerator and the years of service credit determined under (1) as the denominator. (3) The fraction determined in (2) shall then be multiplied by the age difference determined in (1) to apply a reduction in years from age sixty-two (62). 26 (b)(i) Any member, who has not completed at least ten (10) years of contributory service on 27 or before July 1, 2005, may retire upon his or her written application to the retirement board as of 28 the first day of the calendar month in which the application was filed; provided, the member was 29 separated from service prior thereto; and further provided, however, that if separation from service 30 occurs during the month in which application is filed, the effective date shall be the first day 31 following that separation from service; provided, the member or his or her retirement date had 32 attained the age of fifty-nine (59) and had completed at least twenty-nine (29) years of total service 33 or provided that the member on his or her retirement date had attained the age of sixty-five (65) 34 and had completed at least ten (10) years of contributory service; or provided, that the member on 6 1 his or her retirement date had attained the age of fifty-five (55) and had completed twenty (20) 2 years of total service provided, that the retirement allowance, as determined according to the 3 formula in § 36-10-10 is reduced actuarially for each month that the age of the member is less than 4 sixty-five (65) years, and who retire before October 1, 2009 or are eligible to retire as of 5 September 30, 2009. 6 (ii) For members who become eligible to retire on or after October 1, 2009 and prior to July 7 1, 2012, benefits are available to members who have attained the age of sixty-two (62) and 8 completed at least twenty-nine (29) years of total service or have attained the age of sixty-five (65) 9 and completed at least ten (10) years of contributory service. For members in service as of October 10 1, 2009 who were not eligible to retire as of September 30, 2009 but become eligible to retire prior 11 to July 1, 2012, who have a minimum retirement age of sixty-two (62), the retirement age will be 12 adjusted downward in proportion to the amount of service the member has earned as of September 13 30, 2009. The proportional formula shall work as follows: 14 (1) The formula shall determine the first age of retirement eligibility under the laws in 15 effect on September 30, 2009 which shall then be subtracted from the minimum retirement age of 16 sixty-two (62). 17 18 19 20 21 22 (2) The formula shall then take the member's total service credit as of September 30, 2009 as the numerator and the years of service credit determined under (1) as the denominator. (3) The fraction determined in (2) above shall then be multiplied by the age difference determined in (1) to apply a reduction in years from age sixty-two (62). (c) Effective July 1, 2012, the following shall apply to all members not eligible to retire prior to July 1, 2012: 23 (i) A member with contributory service on or after July 1, 2012, shall be eligible to retire 24 upon the completion of at least five (5) years of contributory service and attainment of the 25 member's Social Security retirement age. 26 (ii) For members with five (5) or more years of contributory service as of June 30, 2012, 27 with contributory service on and after July 1, 2012, who have a retirement age of Social Security 28 Retirement Age, the retirement age will be adjusted downward in proportion to the amount of 29 service the member has earned as of June 30, 2012, but in no event shall a member's retirement age 30 under this subparagraph (ii) be prior to the attainment of age fifty-nine (59) or prior to the 31 member's retirement age determined under the laws in effect on June 30, 2012. The proportional 32 formula shall work as follows: 33 34 (1) The formula shall determine the first age of retirement eligibility under the laws in effect on June 30, 2012 which shall then be subtracted from Social Security retirement age; 7 1 (2) The formula shall then take the member's total service credit as of June 30, 2012 as the 2 numerator and the projected service at retirement age in effect on June 30, 2012 as the 3 denominator; 4 5 (3) The fraction determined in (2) shall then be multiplied by the age difference determined in (1) to apply a reduction in years from Social Security retirement age. 6 (iii) Effective July 1, 2015, A a member who has completed twenty (20) or more years of 7 total service and who has attained an age within five (5) years of the eligible retirement age under 8 subparagraphs (c)(i) or (c)(ii) above or subparagraph (d) below, may elect to retire provided that 9 the retirement allowance shall be reduced actuarially for each month that the age of the member is 10 less than the eligible retirement age under subparagraphs (c)(i) or (c)(ii) above or subparagraph (d) 11 below in accordance with the following table: 12 Year Preceding Retirement 13 For Year 1 9% .75% 14 For Year 2 8% .667% 15 For Year 3 7% .583% 16 For Year 4 7% .583% 17 For Year 5 7% .583%. Cumulative Annual Reduction Cumulative Monthly Reduction 18 (iv) Notwithstanding any other provisions of section 36-10-9(c), a member who has 19 completed ten (10) or more years of contributory service as of June 30, 2012, may elect to retire at 20 his or her eligible retirement date as determined under paragraphs (1)(a) and (1)(b) above provided 21 that a member making an election under this paragraph shall receive the member's retirement 22 benefit determined and calculated based on the member's service and average compensation as of 23 June 30, 2012. This provision shall be interpreted and administered in a manner to protect a 24 member's accrued benefit on June 30, 2012. 25 (d) Notwithstanding any other provisions of subparagraph (c) above, effective July 1, 2015, 26 members in active service shall be eligible to retire upon the earlier of (A) the attainment of at least 27 age sixty-five (65) and the completion of at least thirty (30) years of total service, or the attainment 28 of at least age sixty-four (64) and the completion of at least thirty-one (31) years of total service, or 29 the attainment of at least age sixty-three (63) and the completion of at least thirty-two (32) years of 30 total service, or the attainment of at least age sixty-two (62) and the completion of at least thirty- 31 three (33) years of total service, or (B) the member’s retirement eligibility date under 32 subparagraphs (c)(i) or (c)(ii) above. 33 (2) Any faculty employee at a public institution of higher education under the jurisdiction 34 of the board of governors for higher education shall not be involuntarily retired upon attaining the 8 1 age of seventy (70) years. 2 (3)(i) Except as specifically provided in § 36-10-9.1, §§ 36-10-12 – 36-10-15, and §§ 45- 3 21-19 – 45-21-22, (I) On or prior to June 30, 2012 no member shall be eligible for pension benefits 4 under this chapter unless the member shall have been a contributing member of the employee's 5 retirement system for at least ten (10) years, or (II) For members in active contributory service on 6 or after July 1, 2012, the member shall have been a contributing member of the retirement system 7 for at least five (5) years. 8 9 10 11 (ii) Provided, however, a person who has ten (10) years service credit on or before June 16, 1991, shall be vested. (iii) Furthermore, any past service credits purchased in accordance with § 36-9-38 shall be counted towards vesting. 12 (iv) Any person who becomes a member of the employees' retirement system pursuant to § 13 45-21-4 shall be considered a contributing member for the purpose of chapter 21 of title 45 and this 14 chapter. 15 (v) Notwithstanding any other provision of law, no more than five (5) years of service 16 credit may be purchased by a member of the system. The five (5) year limit shall not apply to any 17 purchases made prior to January 1, 1995. A member who has purchased more than five (5) years of 18 service credits before January 1, 1995, shall be permitted to apply those purchases towards the 19 member's service retirement. However, no further purchase will be permitted. Repayment in 20 accordance with applicable law and regulation of any contribution previously withdrawn from the 21 system shall not be deemed a purchase of service credit. 22 (vi) Notwithstanding any other provision of law, effective July 1, 2012, except for 23 purchases under §§ 16-16-7.1, 36-5-3, 36-9-31, 36-10-10.4, and 45-21-53, (A) For service 24 purchases for time periods prior to a member's initial date of hire, the purchase must be made 25 within three (3) years of the member's initial date of hire, (B) For service purchases for time 26 periods for official periods of leave as authorized by law, the purchase must be made within three 27 (3) years of the time the official leave was concluded by the member. Notwithstanding the 28 preceding sentence, service purchases from time periods prior to June 30, 2012 may be made on or 29 prior to June 30, 2015. 30 (4) No member of the employees' retirement system shall be permitted to purchase service 31 credits for casual, seasonal, or temporary employment, or emergency appointment, for employment 32 as a page in the general assembly, or for employment at any state college or university while the 33 employee is a student or graduate assistant of the college or university. 34 (5) Except as specifically provided in §§ 16-16-6.2 and 16-16-6.4, a member shall not 9 1 receive service credit in this retirement system for any year or portion of it, which counts as 2 service credit in any other retirement system in which the member is vested or from which the 3 member is receiving a pension and/or any annual payment for life. This subsection shall not apply 4 to any payments received pursuant to the federal Social Security Act or to payments from a 5 military pension earned prior to participation in state or municipal employment, or to military 6 service credits earned prior to participation in state or municipal employment. 7 (6) A member who seeks to purchase or receive service credit in this retirement system 8 shall have the affirmative duty to disclose to the retirement board whether or not he or she is a 9 vested member in any other retirement system and/or is receiving a pension, retirement allowance, 10 or any annual payment for life. The retirement board shall have the right to investigate as to 11 whether or not the member has utilized the same time of service for credit in any other retirement 12 system. The member has an affirmative duty to cooperate with the retirement board including, by 13 way of illustration and not by way of limitations the duty to furnish or have furnished to the 14 retirement board any relevant information which is protected by any privacy act. 15 (7) A member who fails to cooperate with the retirement board shall not have the time of 16 service counted toward total service credit until such time as the member cooperates with the 17 retirement board and until such time as the retirement board determines the validity of the service 18 credit. 19 (8) A member who knowingly makes a false statement to the retirement board regarding 20 service time or credit shall not be entitled to a retirement allowance and is entitled only to the 21 return of his or her contributions without interest. 22 23 SECTION 6. Section 36-10-10 of the General Laws in Chapter 36-10 entitled “Retirement System-Contributions and Benefits” is hereby amended to read as follows: 24 § 36-10-10 Amount of service retirement allowance. – (a)(1)(i) For employees eligible to 25 retire on or before September 30, 2009, upon retirement for service under § 36-10-9, a member 26 whose membership commenced before July 1, 2005 and who has completed at least ten (10) years 27 of contributory service on or before July 1, 2005 shall receive a retirement allowance which shall 28 be determined in accordance with schedule A below for service prior to July 1, 2012: 29 Schedule A 30 Years of Service Percentage Allowance 31 1st through 10th inclusive 1.7% 32 11th through 20th inclusive 1.9% 33 21st through 34th inclusive 3.0% 34 35th 2.0% 10 1 (ii) For employees eligible to retire on or after October 1, 2009, who were not eligible to 2 retire on or before September 30, 2009, upon retirement from service under § 36-10-9, a member 3 whose membership commenced before July 1, 2005 and who has completed at least ten (10) years 4 of contributory service on or before July 1, 2005 shall receive a retirement allowance which shall 5 be determined in accordance with schedule A above for service on before September 30, 2009, and 6 shall be determined in accordance with schedule B in subsection (a)(2) below for service on or 7 after October 1, 2009 and prior to July 1, 2012. 8 (2) Upon retirement for service under § 36-10-9, a member whose membership commenced 9 after July 1, 2005, or who has not completed at least ten (10) years of contributory service as of 10 July 1, 2005, shall, receive a retirement allowance which shall be determined in accordance with 11 Schedule B below for service prior to July 1, 2012: 12 Schedule B 13 Years of Service Percentage Allowance 14 1st through 10th inclusive 1.60% 15 11th through 20th inclusive 1.80% 16 21st through 25th inclusive 2.0% 17 26th through 30th inclusive 2.25% 18 31st through 37th inclusive 2.50% 19 38th 2.25% 20 (b) The retirement allowance of any member whose membership commenced before July 1, 21 2005 and who has completed at least ten (10) years of contributory service on or before July 1, 22 2005 shall be in an amount equal to the percentage allowance specified in subsection (a)(1) of his 23 or her average highest three (3) consecutive years of compensation multiplied by the number of 24 years of total service, but in no case to exceed eighty percent (80%) of the compensation payable at 25 completion of thirty-five (35) years of service; provided, however, for employees retiring on or 26 after October 1, 2009 who were not eligible to retire as of September 30, 2009 the calculation shall 27 be based on the average highest five (5) consecutive years of compensation. Any member who has 28 in excess of thirty-five (35) years on or before June 2, 1985, shall not be entitled to any refund, and 29 any member with thirty-five (35) years or more on or after June 2, 1985, shall contribute from July 30 1, 1985, until his or her retirement. 31 The retirement allowance of any member whose membership commenced after July 1, 2005 32 or who had not completed at least ten (10) years of contributory service as of July 1, 2005, shall, 33 be in an amount equal to the percentage allowance specified in Schedule B of his or her average 34 highest three (3) consecutive years of compensation multiplied by the number of years of total 11 1 service, but in no case to exceed seventy-five percent (75%) of the compensation payable at the 2 completion of thirty-eight (38) years of service; provided, however, for employees retiring on or 3 after October 1, 2009 who were not eligible to retire as of September 30, 2009 the calculation shall 4 be based on the average highest five (5) consecutive years of compensation. 5 (c) Any member with thirty-eight (38) years or more of service prior to December 31, 1985, 6 shall not be required to make additional contributions. Contributions made between December 31, 7 1985, and July 1, 1987, by members with thirty-eight (38) or more years of service prior to 8 December 31, 1985, shall be refunded by the retirement board to the persons, their heirs, 9 administrators, or legal representatives. 10 (d) For service prior to July 1, 2012, the retirement allowance of a member shall be 11 determined in accordance with subsections (a)(1) and (a)(2) above. For service on and after July 1, 12 2012, a member's retirement allowance shall be equal to: (i) for members with fewer than twenty 13 (20) years of total service as of June 30, 2012, one percent (1%) of the member's average 14 compensation multiplied by the member's years of total service on and after July 1 2012, and (ii) 15 for members with twenty (20) or more years of total service as of June 30, 2012, a member’s 16 retirement allowance shall be equal to one percent (1%) of the member’s average compensation 17 multiplied by the member’s years of total service between July 1, 2012 and June 30, 2015, and two 18 percent (2%) of the member’s average compensation multiplied by the member’s years of total 19 service on and after July 1, 2015. For purposes of computing a member’s total service under the 20 preceding sentence, service purchases shall be included in total service only with respect to those 21 service purchases approved prior to June 30, 2012 and those applications for service purchases 22 received by the retirement system on or before June 30, 2012. 23 retirement allowance exceed the maximum limitations set forth in paragraph (b) above. 24 25 SECTION 7. In no event shall a member's Section 36-10-10.2 of the General Laws in Chapter 36-10 entitled “Retirement System-Contributions and Benefits” is hereby amended to read as follows: 26 § 36-10-10.2 Amount of service retirement allowance – Correctional officers. – (a) 27 Upon retirement for service under § 36-10-9.2, a member with twenty-five (25) or more years of 28 service as of June 30, 2012 shall receive a retirement allowance of an amount determined under (i) 29 below. All other members shall receive a retirement allowance of an amount equal to the sum of (i) 30 below for service prior to July 1, 2012, plus (ii) below for service on and after July 1, 2012. 31 (i) Two percent (2%) of his or her average compensation multiplied by his or her first thirty 32 (30) years of total service within the department of corrections; any and all years of remaining 33 service shall be issued to the member at a retirement allowance of an amount equal to his or her 34 average compensation multiplied by the percentage allowance determined in accordance with 12 1 Schedule A below: 2 Schedule A 3 Years of Service Percentage Allowance 4 1 through 30 inclusive 2% 5 31st 6% 6 32nd 5% 7 33rd 4% 8 34th 3% 9 35th 2% 10 (ii) On and after July 1, 2012, Two percent (2%) of his or her average compensation 11 multiplied by his or her first thirty years of total service years of service on and after July 1, 2012 12 within the department of corrections, and three percent (3%) of his or her average compensation 13 multiplied by the member’s thirty-first (31 st ) through thirty-fifth (35 th) years of service. 14 (b) In no case shall a retirement percentage allowance exceed the greater of the member's 15 retirement percentage allowance on June 30, 2012 or seventy-five percent (75%). Any member 16 who has in excess of thirty-five (35) years on or before July 1, 1987, shall not be entitled to any 17 refund. Any member with thirty-five (35) years or more on or after July 1, 1987, shall contribute 18 from July 1, 1987, until his or her retirement, provided, however, that any member with thirty- 19 eight (38) years of service prior to July 1, 1987, shall not be required to contribute. 20 21 SECTION 8. 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: 22 § 36-10-35 Additional benefits payable to retired employees. – (a) All state employees 23 and all beneficiaries of state employees receiving any service retirement or ordinary or accidental 24 disability retirement allowance pursuant to the provisions of this title on or before December 31, 25 1967, shall receive a cost of living retirement adjustment equal to one and one-half percent (1.5%) 26 per year of the original retirement allowance, not compounded, for each calendar year the 27 retirement allowance has been in effect. For the purposes of computation, credit shall be given for 28 a full calendar year regardless of the effective date of the retirement allowance. This cost of living 29 adjustment shall be added to the amount of the retirement allowance as of January 1, 1968, and an 30 additional one and one-half percent (1.5%) shall be added to the original retirement allowance in 31 each succeeding year during the month of January, and provided further, that this additional cost of 32 living increase shall be three percent (3%) for the year beginning January 1, 1971, and each year 33 thereafter, through December 31, 1980. Notwithstanding any of the above provisions, no employee 34 receiving any service retirement allowance pursuant to the provisions of this title on or before 13 1 December 31, 1967, or the employee's beneficiary, shall receive any additional benefit hereunder 2 in an amount less than two hundred dollars ($200) per year over the service retirement allowance 3 where the employee retired prior to January 1, 1958. 4 (b) All state employees and all beneficiaries of state employees retired on or after January 5 1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement 6 allowance pursuant to the provisions of this title shall, on the first day of January next following 7 the third anniversary date of the retirement, receive a cost of living retirement adjustment, in 8 addition to his or her retirement allowance, in an amount equal to three percent (3%) of the original 9 retirement allowance. In each succeeding year thereafter through December 31, 1980, during the 10 month of January, the retirement allowance shall be increased an additional three percent (3%) of 11 the original retirement allowance, not compounded, to be continued during the lifetime of the 12 employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar 13 year regardless of the effective date of the service retirement allowance. 14 (c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state 15 employees receiving any service retirement and all state employees, and all beneficiaries of state 16 employees, who have completed at least ten (10) years of contributory service on or before July 1, 17 2005 pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries of 18 state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 – 36-10-15, 19 the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of the 20 original retirement allowance or the retirement allowance as computed in accordance with § 36-10- 21 35.1, compounded annually from the year for which the cost of living adjustment was determined 22 to be payable by the retirement board pursuant to the provisions of subsection (a) or (b) of this 23 section. Such cost of living adjustments are available to members who retire before October 1, 24 2009 or are eligible to retire as of September 30, 2009. 25 26 (2) The provisions of this subsection shall be deemed to apply prospectively only and no retroactive payment shall be made. 27 (3) The retirement allowance of all state employees and all beneficiaries of state employees 28 who have not completed at least ten (10) years of contributory service on or before July 1, 2005 or 29 were not eligible to retire as of September 30, 2009, shall, on the month following the third 30 anniversary date of retirement, and on the month following the anniversary date of each succeeding 31 year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or 32 the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as 33 published by the United States Department of Labor Statistics determined as of September 30 of 34 the prior calendar year, whichever is less; the cost of living adjustment shall be compounded 14 1 annually from the year for which the cost of living adjustment was determined payable by the 2 retirement board; provided, that no adjustment shall cause any retirement allowance to be 3 decreased from the retirement allowance provided immediately before such adjustment. 4 (d) For state employees not eligible to retire in accordance with this chapter as of 5 September 30, 2009 and not eligible upon passage of this article, and for their beneficiaries, the 6 cost of living adjustment described in subsection (3) above shall only apply to the first thirty-five 7 thousand dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon 8 the third (3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65), 9 whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the 10 percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published by 11 the United States Department of Labor Statistics determined as of September 30 of the prior 12 calendar year or three percent (3%), whichever is less. The first thirty-five thousand dollars 13 ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of increase in 14 the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States 15 Department of Labor Statistics determined as of September 30 of the prior calendar year or three 16 percent (3%), whichever is less, on the month following the anniversary date of each succeeding 17 year. For state employees eligible to retire as of September 30, 2009 or eligible upon passage of 18 this article, and for their beneficiaries, the provisions of this subsection (d) shall not apply. 19 (e) All legislators and all beneficiaries of legislators who are receiving a retirement 20 allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall, 21 commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a 22 retirement allowance, in an amount equal to three percent (3%) of the original retirement 23 allowance. In each succeeding year thereafter during the month of January, the retirement 24 allowance shall be increased an additional three percent (3%) of the original retirement allowance, 25 compounded annually, to be continued during the lifetime of the legislator or beneficiary. For the 26 purposes of computation, credit shall be given for a full calendar year regardless of the effective 27 date of the service retirement allowance. 28 (f) The provisions of §§ 45-13-7 – 45-13-10 shall not apply to this section. 29 (g) This subsection (g) shall be effective for the period July 1, 2012 through June 30, 2015. 30 (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (g)(2) below, for 31 all present and former employees, active and retired members, and beneficiaries receiving any 32 retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment 33 provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) 34 is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the 15 1 "subtrahend") from the Five-Year Average Investment Return of the retirement system determined 2 as of the last day of the plan year preceding the calendar year in which the adjustment is granted, 3 said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) 4 is equal to the lesser of the member's retirement allowance or the first twenty-five thousand dollars 5 ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) amount to be 6 indexed annually in the same percentage as determined under (g)(1)(A) above. The "Five-Year 7 Average Investment Return" shall mean the average of the investment returns of the most recent 8 five (5) plan years as determined by the retirement board. Subject to paragraph (g)(2) below, the 9 benefit adjustment provided by this paragraph shall commence upon the third (3rd) anniversary of 10 the date of retirement or the date on which the retiree reaches his or her Social Security retirement 11 age, whichever is later. In the event the retirement board adjusts the actuarially assumed rate of 12 return for the system, either upward or downward, the subtrahend shall be adjusted either upward 13 or downward in the same amount. 14 (2) Except as provided in paragraph (g)(3), the benefit adjustments under this section for 15 any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the Employees' 16 Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 17 Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty 18 percent (80%) in which event the benefit adjustment will be reinstated for all members for such 19 plan year. 20 In determining whether a funding level under this paragraph (g)(2) has been achieved, the 21 actuary shall calculate the funding percentage after taking into account the reinstatement of any 22 current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall mean 23 the ratio of the actuarial value of assets to the actuarial accrued liability. 24 (3) Notwithstanding paragraph (g)(2), in each fifth plan year commencing after June 30, 25 2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 26 plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (g)(1) 27 above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, the 28 Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by 29 the system's actuary on an aggregate basis, exceeds eighty percent (80%). 30 (4) Notwithstanding any other provision of this chapter, the provisions of this paragraph (g) 31 of § 36-10-35 shall become effective July 1, 2012 and shall apply to any benefit adjustment not 32 granted on or prior to June 30, 2012. 33 (h) This subsection (h) shall become effective July 1, 2015. 34 (1)(A) As soon as administratively reasonable following the enactment into law of this 16 1 paragraph (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or 2 beneficiaries of members who retired on or before June 30, 2012, in the amount of 2% of the lesser 3 of either the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 4 the member’s retirement allowance. 5 regard to the retiree’s age or number of years since retirement. This one-time benefit adjustment shall be provided without 6 (B) Notwithstanding the prior paragraphs of this section, for all present and former 7 employees, active and retired members, and beneficiaries receiving any retirement, disability or 8 death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 9 under this section for adjustments on and after January 1, 2016, and subject to paragraph (h)(2) 10 below, shall be equal to (I) multiplied by (II): 11 (I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 12 (i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 13 (the "subtrahend") from the Five-Year Average Investment Return of the retirement system 14 determined as of the last day of the plan year preceding the calendar year in which the adjustment 15 is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 16 (0%). 17 returns of the most recent five (5) plan years as determined by the retirement board. In the event 18 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 19 downward, the subtrahend shall be adjusted either upward or downward in the same amount. The "Five-Year Average Investment Return" shall mean the average of the investment 20 (ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 21 Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 22 Statistics determined as of September 30 of the prior calendar year. 23 24 In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent. 25 (II) is equal to the lesser of either the member's retirement allowance or the first twenty- 26 five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 27 to be indexed annually in the same percentage as determined under (h)(1)(B)(I) above. 28 The benefit adjustments provided by this paragraph (h)(1)(B) shall be provided to all 29 retirees entitled to receive a benefit adjustment as of June 30, 2012 under the law then in effect, 30 and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary 31 of the date of retirement or the date on which the retiree reaches his or her Social Security 32 retirement age, whichever is later. 33 (2) Except as provided in paragraph (h)(3), the benefit adjustments under paragraph 34 (h)(1)(B) for any plan year shall be suspended in their entirety unless the Funded Ratio of the 17 1 Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the 2 State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, 3 exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 4 members for such plan year. 5 In determining whether a funding level under this paragraph (h)(2) has been achieved, the 6 actuary shall calculate the funding percentage after taking into account the reinstatement of any 7 current or future benefit adjustment provided under this section. 8 (3) Notwithstanding paragraph (h)(2), in each fourth plan year commencing after June 30, 9 2012 commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 10 plan years, (i) a benefit adjustment shall be calculated and made in accordance with paragraph 11 (h)(1) (B) above and (ii) effective for members and/or beneficiaries of members who retired on or 12 before June 30, 2015, the dollar amount in paragraph (h)(1)(B)(II) of twenty-five thousand eight 13 hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 14 dollars ($31,026) until the Funded Ratio of the Employees' Retirement System of Rhode Island, the 15 Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by 16 the system's actuary on an aggregate basis, exceeds eighty percent (80%). 17 (i) Effective for members and or beneficiaries of members who have retired on or before 18 July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 19 days following the enactment of the legislation implementing this provision, and a second one-time 20 stipend of five hundred dollars ($500) in the same month of the following year. These stipends 21 shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 22 payment date and shall not be considered cost of living adjustments under the prior provisions of 23 this Section 36-10-3. 24 25 26 27 SECTION 9. Section 36-10.3-1 of the General Laws in Chapter 36-10.3 entitled “Defined Contribution Retirement Plan” is hereby amended to read as follows: § 36-10.3-1 Definitions. – As used in this chapter, the following terms, unless the context requires a different interpretation, shall have the following meanings: 28 (1) "Compensation" means compensation as defined in section 36-8-1(8). 29 (2) "Employee" means an employee as defined in sections 36-8-1(9) and 45-21-2(7), and a 30 teacher as defined in section 16-16-1(12), effective July 1, 2012, provided however, effective July 31 1, 2015, “employee” shall not include any employee with twenty (20) or more years of total service 32 as of June 30, 2012 in the Employees Retirement System under chapters 8 through 10 of title 36 or 33 chapter 16 of title 16 (ERS), or the Municipal Employees Retirement System under chapter 21 of 34 title 45 (MERS). 18 1 (3) "Employer" means the State of Rhode Island or the local municipality which employs a 2 member of the Employees Retirement System under chapters 8 through 10 of title 36 or chapter 16 3 of title 16 (ERS) or the Municipal Employees Retirement System under chapters 21 and 21.2 of 4 title 45 (MERS). 5 (4) "Plan" means the retirement plan established by this chapter. 6 (5) A "public safety member" shall mean a member of MERS who is a municipal fire 7 fighter or a municipal policeman or policewoman as defined in § 45-21.2-2 who does not 8 participate in Social Security under the Federal Old Age, Survivors, and Disability income 9 program. 10 (6) "Regular member" means: (i) An employee who is a member of ERS other than 11 correctional officers as defined in § 36-10-9.2; or (ii) an employee who is a A member of MERS 12 other than a public safety member. 13 (7) The "retirement board" or "board" shall mean the retirement board of the Employees 14 Retirement System of Rhode Island as defined in Chapter 36-8. The retirement board shall be the 15 plan administrator and plan trustee and shall administer the plan in accordance with § 36-8-4.1. 16 17 18 19 (8) "State investment commission" or "commission" means the state investment commission as defined in § 35-10-1. (9) "Supplemental employer" includes any employer that provides supplemental contributions to the defined contribution retirement plan as provided in § 36-10.3-3. 20 (10) "Supplemental member" is defined in § 36-10.3-3. 21 SECTION 10. Section 36-10.3-5 of the General Laws in Chapter 36-10.3 entitled “Defined 22 23 24 Contribution Retirement Plan” is hereby amended to read as follows: § 36-10.3-5 Employer contributions. – (1) An employer shall contribute to each regular member's individual account the following amounts: 25 (i) for members with fewer than ten (10) years of total services as of June 30, 2012, an 26 amount equal to one percent (1%) of the member's compensation at the end of each payroll period 27 from July 1 to the following June 30; 28 (ii) for members with ten (10) or more but fewer than fifteen (15) years of total service as 29 of June 30, 2012, an amount equal to one percent (1%) of the member’s compensation at the end of 30 each payroll period from July 1, 2012 through June 30, 2015, and effective July 1, 2015, an amount 31 equal to one and one-quarter percent (1.25%) of the member's compensation at the end of each 32 payroll period; and 33 (iii) for members with fifteen (15) or more but fewer than twenty (20) years of total service 34 as of June 30, 2012, an amount equal to one percent (1%) of the member’s compensation at the end 19 1 of each payroll period from July 1, 2012 through June 30, 2015, and effective July 1, 2015, an 2 amount equal to one and one-half percent (1.5%) of the member's compensation at the end of each 3 payroll period from July 1 to the following June 30. 4 (2) An employer shall contribute to the individual account of each public safety member, not 5 participating in Social Security under the Federal Old Age, Survivors and Disability Income 6 program, an amount equal to three percent (3%) of the member's compensation from July 1 to the 7 following June 30. 8 (3) Contributions by supplemental employers shall be governed by § 36-10.3-6. 9 10 SECTION 11. Chapter 36-10.3 entitled “Defined Contribution Retirement Plan” is hereby amended by adding the following section: 11 § 36-10.3-13 Waiver of Administrative Fees. – Any plan administration fees assessed to 12 members of the plan after July 1, 2015 shall be reimbursed by the state for any member whose 13 annual compensation is thirty-five thousand dollars ($35,000) or less, said dollar amount to be 14 indexed annually in the same percentage determined under Section 36-10-35(h)(1)(B). 15 16 17 18 SECTION 12. Section 16-16-12 of the General Laws in Chapter 16-16 entitled “Teachers’ Retirement” is hereby amended to read as follows: § 16-16-12 Procedure for service retirement. – Retirement of a member on a service retirement allowance shall be made by the retirement board as follows: 19 (a)(i) Any member may retire upon his or her written application to the retirement board as 20 of the first day of the calendar month in which the application was filed, provided the member was 21 separated from service prior to filing the application, and further provided however, that if 22 separation from service occurs during the month in which the application is filed, the effective date 23 shall be the first day following the separation from service, and provided further that the member 24 on retirement date has attained the age of sixty (60) years and has completed at least ten (10) years 25 of contributory service on or before July 1, 2005, or regardless of age has completed twenty-eight 26 (28) years of total service and has completed at least ten (10) years of contributory service on or 27 before July 1, 2005, and who retire before October 1, 2009 or are eligible to retire as of September 28 30, 2009. 29 (ii) For teachers who become eligible to retire on or after October 1, 2009 and prior to July 30 1, 2012, benefits are available to teachers who have attained the age of sixty-two (62) and 31 completed at least ten (10) years of contributory service. For teachers in service as of October 1, 32 2009 who were not eligible to retire as of September 30, 2009 but became eligible to retire prior to 33 July 1, 2012, the minimum retirement age of sixty-two (62) will be adjusted downward in 34 proportion to the amount of service the member has earned as of September 30, 2009. The 20 1 proportional formula shall work as follows: 2 (A) The formula shall determine the first age of retirement eligibility under the laws in 3 effect on September 30, 2009 which shall then be subtracted from the minimum retirement age of 4 sixty-two (62). 5 6 7 8 (B) The formula shall then take the teacher's total service credit as of September 30, 2009 as the numerator and the years of service credit determined under (A) as the denominator. (C) The fraction determined in (B) shall then be multiplied by the age difference in (1) to apply a reduction in years from age sixty-two (62). 9 (b)(i) Any member, who has not completed at least ten (10) years of contributory service on 10 or before July 1, 2005, may retire upon his or her written application to the retirement board as of 11 the first day of the calendar month in which the application was filed; provided, the member was 12 separated from service prior thereto; and further provided, however, that if separation from service 13 occurs during the month in which application is filed, the effective date shall be the first day 14 following that separation from service; provided, the member on his or her retirement date had 15 attained the age of fifty-nine (59) and had completed at least twenty-nine (29) years of total 16 service; or provided, that the member on his or her retirement date had attained the age of sixty- 17 five (65) and had completed at least ten (10) years of contributory service; or provided, that the 18 member on his or her retirement date had attained the age of fifty-five (55) and had completed 19 twenty (20) years of total service and provided, that the retirement allowance, as determined 20 according to the formula in § 16-16-13 is reduced actuarially for each month that the age of the 21 member is less than sixty-five (65) years and who retire before October 1, 2009 or are eligible to 22 retire as of September 30, 2009. 23 (ii) For teachers who become eligible to retire on or after October 1, 2009 and prior to July 24 1, 2012, benefits are available to teachers who have attained the age of sixty-two (62) and have 25 completed at least twenty-nine (29) years of total service or have attained the age of sixty-five (65) 26 and completed at least ten (10) years of contributory service. For teachers in service as of October 27 1, 2009 who were not eligible to retire as of September 30, 2009 but become eligible to retire prior 28 to July 1, 2012, who have a minimum retirement age of sixty-two (62), the retirement age will be 29 adjusted downward in proportion to the amount of service the member has earned as of September 30 30, 2009. The proportional formula shall work as follows: 31 (A) The formula shall determine the first age of retirement eligibility under the laws in 32 effect on September 30, 2009 which shall then be subtracted from the minimum retirement age of 33 sixty-two (62). 34 (B) The formula shall then take the teacher's total service credit as of September 30, 2009 21 1 2 3 4 5 as the numerator and the years of service credit determined under (A) as the denominator. (C) The fraction determined in (B) shall then be multiplied by the age difference determined in (A) to apply a reduction in years from age sixty-two (62). (c) Effective July 1, 2012, the following shall apply to all teachers not eligible to retire prior to July 1, 2012: 6 (i) A teacher with contributory service on or after July 1, 2012, shall be eligible to retire 7 upon the completion of at least five (5) years of contributory service and attainment of the teacher's 8 Social Security retirement age. 9 (ii) For teachers with five (5) or more years of contributory service as of June 30, 2012, 10 with contributory service on and after July 1, 2012, who have a retirement age of Social Security 11 Retirement Age, the retirement age will be adjusted downward in proportion to the amount of 12 service the teacher has earned as of June 30, 2012, but in no event shall a teacher's retirement age 13 under this subparagraph (ii) be prior to the attainment of age fifty-nine (59) or prior to the teacher's 14 retirement age determined under the laws in effect on June 30, 2012. The proportional formula 15 shall work as follows: 16 17 (1) The formula shall determine the first age of retirement eligibility under the laws in effect on June 30, 2012 which shall then be subtracted from Social Security retirement age; 18 (2) The formula shall then take the teacher's total service credit as of June 30, 2012 as the 19 numerator and the projected service at retirement age in effect on June 30, 2012 as the 20 denominator; 21 22 (3) The fraction determined in (2) shall then be multiplied by the age difference determined in (1) to apply a reduction in years from Social Security retirement age. 23 (iii) Effective July 1, 2015, A a teacher who has completed twenty (20) or more years of 24 total service and who has attained an age within five (5) years of the eligible retirement age under 25 subdivisions (c)(i) or (c)(ii) above or subdivision (d) below, may elect to retire provided that the 26 retirement allowance shall be reduced actuarially for each month that the age of the teacher is less 27 than the eligible retirement age under subdivisions (c)(i) or (c)(ii) above or subdivision (d) below 28 in accordance with the following table: 29 Year Preceding Retirement 30 For Year 1 9% .75% 31 For Year 2 8% .667% 32 For Year 3 7% .583% 33 For Year 4 7% .583% 34 For Year 5 7% .583%. Cumulative Annual Reduction Cumulative Monthly Reduction 22 1 (iv) Notwithstanding any other provisions of this subsection 16-16-12(c), a teacher who has 2 completed ten (10) or more years of contributory service as of June 30, 2012, may elect to retire at 3 his or her eligible retirement date as determined under subsections (a) and (b) above provided that 4 a teacher making an election under this paragraph shall receive the teacher's retirement benefit 5 determined and calculated based on the teacher's service and average compensation as of June 30, 6 2012. This provision shall be interpreted and administered in a manner to protect a teacher's 7 accrued benefit on June 30, 2012. 8 (d) Notwithstanding any other provisions of subparagraph (c) above, effective July 9 1, 2015, teachers in active service shall be eligible to retire upon the earlier of (A) the 10 attainment of at least age sixty-five (65) and the completion of at least thirty (30) years of 11 total service, or the attainment of at least age sixty-four (64) and the completion of at least 12 thirty-one (31) years of total service, or the attainment of at least age sixty-three (63) and 13 the completion of at least thirty-two (32) years of total service, or the attainment of at least 14 age sixty-two (62) and the completion of at least thirty-three (33) years of total service, or 15 (B) the teacher’s retirement eligibility date under subparagraphs (c)(i) or (c)(ii) above. 16 (d) (e) Except as specifically provided in §§ 36-10-9.1, 36-10-12 through 36-10-15, and 17 45-21-19 through 45-21-22, no member shall be eligible for pension benefits under this chapter 18 unless 19 20 21 22 (i) The member shall have been a contributing member of the employees' retirement system for at least ten (10) years; or (ii) For teachers in active contributory service on or after July 1, 2012, the teacher shall have been a contributing member of the employees' retirement system for at least five (5) years. 23 (2) Provided, however, a person who has ten (10) years service credit shall be vested; 24 provided that for teachers in active contributory service on or after July 1, 2012, a teacher who has 25 five (5) years of contributory service shall be vested. 26 27 (3) Furthermore, any past service credits purchased in accordance with § 36-9-38 shall be counted towards vesting. 28 (4) Any person who becomes a member of the employees' retirement system pursuant to § 29 45-21-8 shall be considered a contributing member for the purpose of chapter 21 of title 45 and this 30 chapter. 31 (5) Notwithstanding any other provision of law, no more than five (5) years of service 32 credit may be purchased by a member of the system. The five (5) year limit shall not apply to any 33 purchases made prior to January 1, 1995. A member who has purchased more than five (5) years of 23 1 service credit before January 1, 1995, shall be permitted to apply the purchases towards the 2 member's service retirement. However, no further purchase will be permitted. 3 4 (6) Notwithstanding any other provision of law, effective July 1, 2012, except for purchases under §§ 16-16-7.1, 36-5-3, 36-9-31, 36-10-10.4, and 45-21-53: 5 6 (i) For service purchases for time periods prior to a teacher's initial date of hire, the purchase must be made within three (3) years of the teacher's initial date of hire; and 7 (ii) For service purchases for time periods for official periods of leave as authorized by 8 law, the purchase must be made within three (3) years of the time the official leave was concluded 9 by the teacher. Notwithstanding paragraphs (i) and (ii) above, service purchases from time periods 10 prior to June 30, 2012 may be made on or prior to June 30, 2015. 11 (e) (f) No member of the teachers' retirement system shall be permitted to purchase service 12 credits for casual or seasonal employment, for employment as a temporary or emergency 13 employee, a page in the general assembly, or for employment at any state college or university 14 while the employee is a student or graduate of the college or university. 15 (f) (g) Except as specifically provided in §§ 16-16-6.2 and 16-16-6.4, a member shall not 16 receive service credit in this retirement system for any year or portion of a year which counts as 17 service credit in any other retirement system in which the member is vested or from which the 18 member is receiving a pension and/or any annual payment for life. This subsection shall not apply 19 to any payments received pursuant to the federal Social Security Act, 42 U.S.C. § 301 et seq. 20 (g) (h) A member who seeks to purchase or receive service credit in this retirement system 21 shall have the affirmative duty to disclose to the retirement board whether or not he or she is a 22 vested member in any other retirement system and/or is receiving a pension, retirement allowance, 23 or any annual payment for life. The retirement board shall have the right to investigate as to 24 whether or not the member has utilized the same time of service for credit in any other retirement 25 system. The member has an affirmative duty to cooperate with the retirement board including, by 26 way of illustration and not by way of limitation, the duty to furnish or have furnished to the 27 retirement board any relevant information that is protected by any privacy act. 28 (h) (i) A member who fails to cooperate with the retirement board shall not have the time 29 of service credit counted toward total service credit until the time the member cooperates with the 30 retirement board and until the time the retirement board determines the validity of the service 31 credit. 32 (i) (j) A member who knowingly makes a false statement to the retirement board regarding 33 service time or credit shall not be entitled to a retirement allowance and is entitled only to the 34 return of his or her contributions without interest. 24 1 2 SECTION 13. Section 16-16-13 of the General Laws in Chapter 16-16 entitled “Teachers’ Retirement” is hereby amended to read as follows: 3 § 16-16-13 Amount of service retirement allowance. – (a)(1)(i) For teachers eligible to 4 retire on or before September 30, 2009, upon retirement from service under § 16-16-12 a teacher 5 whose membership commenced before July 1, 2005 and who has completed at least ten (10) years 6 of contributory service on or before July 1, 2005, shall, receive a retirement allowance which shall 7 be determined in accordance with schedule A for service prior to July 1, 2012. 8 SCHEDULE A 9 YEARS OF SERVICE PERCENTAGE ALLOWANCE 10 1st through 10th inclusive 1.7% 11 11th through 20th inclusive 1.9% 12 21st through 34th inclusive 3.0% 13 35th 2.0% 14 (ii) For teachers eligible to retire on or after October 1, 2009 who were not eligible to retire 15 on or before September 30, 2009, upon retirement for service under § 16-16-12, a teacher whose 16 membership commenced before July 1, 2005 and who has completed at least ten (10) years of 17 contributory service on or before July 1, 2005 shall receive a retirement allowance which shall be 18 determined in accordance with schedule A above for service on before September 30, 2009, and 19 shall be determined in accordance with schedule B in subsection (a)(2) below for service on or 20 after October 1, 2009 and prior to July 1, 2012: 21 (2) Upon retirement from service under § 16-16-12 a teacher whose membership 22 commenced after July 1, 2005 or who has not completed at least ten (10) years of contributory 23 service as of July 1, 2005 shall receive a retirement allowance which shall be determined in 24 accordance with Schedule B for service prior to July 1, 2012. 25 SCHEDULE B 26 YEARS OF SERVICE PERCENTAGE ALLOWANCE 27 1st through 10th inclusive 1.60% 28 11th through 20th inclusive 1.80% 29 21st through 25th inclusive 2.0% 30 26th through 30th inclusive 2.25% 31 31st through 37th inclusive 2.50% 32 38th 2.25% 33 (b) The retirement allowance of any teacher whose membership commenced before July 1, 34 2005 and who has completed at least ten (10) years of contributory service on or before July 1, 25 1 2005 shall be in an amount equal to the percentage allowance specified in subsection (a)(1) of his 2 or her average highest three (3) consecutive years of compensation multiplied by the number of 3 years of total service, but in no case to exceed eighty percent (80%) of the compensation, payable 4 at completion of thirty-five (35) years of service; provided, however, for teachers retiring on or 5 after October 1, 2009 who were not eligible to retire as of September 30, 2009 the calculation shall 6 be based on the average highest five (5) consecutive years of compensation. 7 The retirement allowance of any teacher whose membership commenced after July 1, 2005 or who 8 has not completed at least ten (10) years of contributory service as of July 1, 2005 shall be in an 9 amount equal to the percentage allowance specified in Schedule B of his or her average highest 10 three (3) consecutive years of compensation multiplied by the number of years of total service, but 11 in no case to exceed seventy-five percent (75%) of the compensation, payable at completion of 12 thirty-eight (38) years of service; provided, however, for teachers retiring on or after October 1, 13 2009 who were not eligible to retire as of September 30, 2009 the calculation shall be based on the 14 average highest five (5) consecutive years of compensation. 15 Any teacher who has in excess of thirty-five (35) years on or before June 2, 1985 shall not be 16 entitled to any refund, and any teacher with thirty-five (35) years or more on or after June 2, 1985 17 shall contribute from July 1, 1985 until his or her retirement. 18 (c) For service prior to July 2012, the retirement allowance of a teacher shall be determined 19 in accordance with subsections (a)(1) and (a)(2) above. For service on and after July 1, 2012: (i) 20 for teachers with fewer than twenty (20) years of total service as of June 30, 2012, a teacher's 21 retirement allowance shall be equal to one percent (1%) of the teacher's average compensation 22 multiplied by the teacher's years of total service on and after July 1, 2012, and (ii) for teachers with 23 twenty (20) or more years of total service as of June 30, 2012, a teacher’s retirement allowance 24 shall be equal to one percent (1%) of the teacher’s average compensation multiplied by the 25 teacher’s years of total service between July 1, 2012 and June 30, 2015, and two percent (2%) of 26 the teacher’s average compensation multiplied by the teacher’s years of total service on and after 27 July 1, 2015. For purposes of computing a teacher’s total service under the preceding sentence, 28 service purchases shall be included in total service only with respect to those service purchases 29 approved prior to June 30, 2012 and those applications for service purchases received by the 30 retirement system on or before June 30, 2012. In no event shall a teacher's retirement allowance 31 exceed the maximum limitations set forth in subsection (b) above. 32 33 34 SECTION 14. Section 16-16-22 of the General Laws in Chapter 16-16 entitled “Teachers’ Retirement” is hereby amended to read as follows: § 16-16-22 Contributions to state system. – (a) Prior to July 1, 2012, each teacher shall 26 1 contribute into the system nine and one-half percent (9.5%) of compensation as his or her share of 2 the cost of annuities, benefits, and allowances. Effective July 1, 2012, each teacher shall contribute 3 an amount equal to three and three quarters percent (3.75%) of his or her compensation. Effective 4 July 1, 2015, each teacher with twenty (20) or more years of total service as of June 30, 2012 shall 5 contribute an amount equal to eleven percent (11%) of his or her compensation. The employer 6 contribution on behalf of teacher members of the system shall be in an amount that will pay a rate 7 percent of the compensation paid to the members, according to the method of financing prescribed 8 in the State Retirement Act in chapters 8 – 10 and 10.3 of title 36. This amount shall be paid forty 9 percent (40%) by the state, and sixty percent (60%) by the city, town, local educational agency, or 10 any formalized commissioner approved cooperative service arrangement by whom the teacher 11 members are employed, with the exception of teachers who work in federally funded projects and 12 further with the exception of any supplemental contributions by a local municipality employer 13 under chapter 36-10.3 which supplemental employer contributions shall be made wholly by the 14 local municipality. Provided, however, that the rate percent paid shall be rounded to the nearest 15 hundredth of one percent (.01%). 16 (b) The employer contribution on behalf of teacher members of the system who work in 17 fully or partially federally funded programs shall be prorated in accordance with the share of the 18 contribution paid from the funds of the federal, city, town, or local educational agency, or any 19 formalized commissioner approved cooperative service arrangement by whom the teacher members 20 are approved. 21 (c) In case of the failure of any city, town, or local educational agency, or any formalized 22 commissioner approved cooperative service arrangement to pay to the state retirement system the 23 amounts due from it under this section within the time prescribed, the general treasurer is 24 authorized to deduct the amount from any money due the city, town, or local educational agency 25 from the state. 26 (d) The employer's contribution shared by the state shall be paid in the amounts prescribed 27 in this section for the city, town, or local educational agency and under the same payment 28 schedule. Notwithstanding any other provisions of this chapter, the city, town, or local educational 29 agency or any formalized commissioner approved cooperative service arrangement shall remit to 30 the general treasurer of the state the local employer's share of the teacher's retirement payments on 31 a monthly basis, payable by the fifteenth (15th) of the following month. The amounts that would 32 have been contributed shall be deposited by the state in a special fund and not used for any 33 purpose. The general treasurer, upon receipt of the local employer's share, shall effect transfer of a 34 matching amount of money from the state funds appropriated for this purpose by the general 27 1 assembly into the retirement fund. 2 Upon reconciliation of the final amount owed to the retirement fund for the employer share, the 3 state shall ensure that any local education aid reduction assumed for the FY 2010 revised budget in 4 excess of the actual savings is restored to the respective local entities. 5 (e) This section is not subject to §§ 45-13-7 through 45-13-10. 6 SECTION 15. Section 16-16-40 of the General Laws in Chapter 16-16 entitled “Teachers’ 7 Retirement” is hereby amended to read as follows: 8 § 16-16-40 Additional benefits payable to retired teachers. – (a) All teachers and all 9 beneficiaries of teachers receiving any service retirement or ordinary or accidental disability 10 retirement allowance pursuant to the provisions of this chapter and chapter 17 of this title, on or 11 before December 31, 1967, shall receive a cost of living retirement adjustment equal to one and 12 one-half percent (1.5%) per year of the original retirement allowance, not compounded, for each 13 year the retirement allowance has been in effect. For purposes of computation credit shall be given 14 for a full calendar year regardless of the effective date of the retirement allowance. This cost of 15 living retirement adjustment shall be added to the amount of the service retirement allowance as of 16 January 1, 1970, and payment shall begin as of July 1, 1970. An additional cost of living retirement 17 adjustment shall be added to the original retirement allowance equal to three percent (3%) of the 18 original retirement allowance on the first day of January, 1971, and each year thereafter through 19 December 31, 1980. 20 (b) All teachers and beneficiaries of teachers receiving any service retirement or ordinary 21 disability retirement allowance pursuant to the provisions of this title who retired on or after 22 January 1, 1968, shall, on the first day of January, next following the third (3rd) year on 23 retirement, receive a cost of living adjustment, in addition to his or her retirement allowance, an 24 amount equal to three percent (3%) of the original retirement allowance. In each succeeding year 25 thereafter, on the first day of January, the retirement allowance shall be increased an additional 26 three percent (3%) of the original retirement allowance, not compounded, to be continued through 27 December 31, 1980. 28 (c)(1) Beginning on January 1, 1981, for all teachers and beneficiaries of teachers receiving 29 any service retirement and all teachers and all beneficiaries of teachers who have completed at 30 least ten (10) years of contributory service on or before July 1, 2005, pursuant to the provisions of 31 this chapter, and for all teachers and beneficiaries of teachers who receive a disability retirement 32 allowance pursuant to §§ 16-16-14 – 16-16-17, the cost of living adjustment shall be computed and 33 paid at the rate of three percent (3%) of the original retirement allowance or the retirement 34 allowance as computed in accordance with § 16-16-40.1, compounded annually from the year for 28 1 which the cost of living adjustment was determined to be payable by the retirement board pursuant 2 to the provisions of subsection (a) or (b) of this section. Such cost of living adjustments are 3 available to teachers who retire before October 1, 2009 or are eligible to retire as of September 30, 4 2009. 5 6 (2) The provisions of this subsection shall be deemed to apply prospectively only and no retroactive payment shall be made. 7 (3) The retirement allowance of all teachers and all beneficiaries of teachers who have not 8 completed at least ten (10) years of contributory service on or before July 1, 2005 or were not 9 eligible to retire as of September 30, 2009, shall, on the month following the third anniversary date 10 of the retirement, and on the month following the anniversary date of each succeeding year be 11 adjusted and computed by multiplying the retirement allowance by three percent (3%) or the 12 percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-U) as published 13 by the United States Department of Labor Statistics, determined as of September 30 of the prior 14 calendar year, whichever is less; the cost of living adjustment shall be compounded annually from 15 the year for which the cost of living adjustment was determined payable by the retirement board; 16 provided, that no adjustment shall cause any retirement allowance to be decreased from the 17 retirement allowance provided immediately before such adjustment. 18 (d) For teachers not eligible to retire in accordance with this chapter as of September 30, 19 2009 and not eligible upon passage of this article, and for their beneficiaries, the cost of living 20 adjustment described in subsection (3) above shall only apply to the first thirty-five thousand 21 dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon the third 22 (3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65), 23 whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the 24 percentage increase in the Consumer Price Index for all Urban Consumer (CPI-U) as published by 25 the United States Department of Labor Statistics determined as of September 30 of the prior 26 calendar year or three percent (3%), whichever is less. The first thirty-five thousand dollars 27 ($35,000), as indexed, of retirement allowance shall be multiplied by the percentage of increase in 28 the Consumer Price Index for all Urban Consumers (CPI-U) as published by the United States 29 Department of Labor Statistics determined as of September 30 of the prior calendar year or three 30 percent (3%), whichever is less, on the month following the anniversary date of each succeeding 31 year. For teachers eligible to retire as of September 30, 2009 or eligible upon passage of this 32 article, and for their beneficiaries, the provisions of this subsection (d) shall not apply. 33 (e) This subsection (e) shall be effective for the period July 1, 2012 through June 30, 2015. 34 (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (e)(2) 29 1 below, for all present and former teachers, active and retired teachers, and beneficiaries receiving 2 any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment 3 provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) 4 is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the 5 "subtrahend") from the Five-Year Average Investment Return of the retirement system determined 6 as of the last day of the plan year preceding the calendar year in which the adjustment is granted, 7 said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B) 8 is equal to the lesser of the teacher's retirement allowance or the first twenty-five thousand dollars 9 ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) amount to be 10 indexed annually in the same percentage as determined under paragraph (e)(1)(A) above. The 11 "Five-Year Average Investment Return" shall mean the average of the investment returns of the 12 most recent five (5) plan years as determined by the retirement board. Subject to paragraph (e)(2) 13 below, the benefit adjustment provided by this paragraph shall commence upon the third (3rd) 14 anniversary of the date of retirement or the date on which the retiree reaches his or her Social 15 Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially 16 assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted 17 either upward or downward in the same amount. 18 (2) Except as provided in paragraph (e)(3), the benefit adjustments under this section for 19 any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the Employees' 20 Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 21 Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty 22 percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan 23 year. 24 In determining whether a funding level under this paragraph (e)(2) has been achieved, the actuary 25 shall calculate the funding percentage after taking into account the reinstatement of any current or 26 future benefit adjustment provided under this section. "GASB Funded Ratio" shall mean the ratio 27 of the actuarial value of assets to the actuarial accrued liability. 28 (3) Notwithstanding paragraph (e)(2), in each fifth plan year commencing after June 30, 29 2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 30 plan years, a benefit adjustment shall be calculated and made in accordance with paragraph (e)(l) 31 above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, the 32 Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by 33 the system's actuary on an aggregate basis, exceeds eighty percent (80%). 34 (4) Notwithstanding any other provisions of this chapter, the provisions of this paragraph 30 1 (e) of § 16-16-40 shall become effective July 1, 2012, and shall apply to any benefit adjustments 2 not granted on or prior to June 30, 2012. 3 (f) This subsection (f) shall become effective July 1, 2015. 4 (1)(A) As soon as administratively reasonable following the enactment into law of this 5 paragraph (f)(1)(A), a one-time benefit adjustment shall be provided to teachers and/or 6 beneficiaries of teachers who retired on or before June 30, 2012, in the amount of 2% of the lesser 7 of either the teacher’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 8 the teacher’s retirement allowance. 9 regard to the retiree’s age or number of years since retirement. This one-time benefit adjustment shall be provided without 10 (B) Notwithstanding the prior paragraphs of this section, for all present and former 11 teachers, active and retired teachers, and beneficiaries receiving any retirement, disability or death 12 allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 13 under this section for adjustments on and after January 1, 2016, and subject to paragraph (f)(2) 14 below, shall be equal to (I) multiplied by (II): 15 (I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 16 (i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 17 (the "subtrahend") from the Five-Year Average Investment Return of the retirement system 18 determined as of the last day of the plan year preceding the calendar year in which the adjustment 19 is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 20 (0%). 21 returns of the most recent five (5) plan years as determined by the retirement board. In the event 22 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 23 downward, the subtrahend shall be adjusted either upward or downward in the same amount. The "Five-Year Average Investment Return" shall mean the average of the investment 24 (ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 25 Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 26 Statistics determined as of September 30 of the prior calendar year. 27 28 In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent. 29 (II) is equal to the lesser of either the teacher's retirement allowance or the first twenty-five 30 thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount to be 31 indexed annually in the same percentage as determined under (f)(1)(B)(I) above. 32 The benefit adjustments provided by this paragraph (f)(1)(B) shall be provided to all 33 retirees entitled to receive a benefit adjustment as of June 30, 2012 under the law then in effect, 34 and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary 31 1 of the date of retirement or the date on which the retiree reaches his or her Social Security 2 retirement age, whichever is later. 3 (2) Except as provided in paragraph (f)(3), the benefit adjustments under paragraph 4 (f)(1)(B) for any plan year shall be suspended in their entirety unless the Funded Ratio of the 5 Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the 6 State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, 7 exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 8 teachers for such plan year. 9 In determining whether a funding level under this paragraph (f)(2) has been achieved, the 10 actuary shall calculate the funding percentage after taking into account the reinstatement of any 11 current or future benefit adjustment provided under this section. 12 (3) Notwithstanding paragraph (f)(2), in each fourth plan year commencing after June 30, 13 2012 commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 14 plan years, (i) a benefit adjustment shall be calculated and made in accordance with paragraph 15 (f)(1)(B) above and (ii) effective for teachers and/or beneficiaries of teachers who retired on or 16 before June 30, 2015, the dollar amount in paragraph (f)(1)(B)(II) of twenty-five thousand eight 17 hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 18 dollars ($31,026)until the Funded Ratio of the Employees' Retirement System of Rhode Island, the 19 Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by 20 the system's actuary on an aggregate basis, exceeds eighty percent (80%). 21 (4) Effective for teachers and or beneficiaries of teachers who have retired on or before 22 July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 23 days following the enactment of the legislation implementing this provision, and a second one-time 24 stipend of five hundred dollars ($500) in the same month of the following year. These stipends 25 shall be payable to all retired teachers or beneficiaries receiving a benefit as of the applicable 26 payment date and shall not be considered cost of living adjustments under the prior provisions of 27 this Section 16-16-40. 28 29 30 31 SECTION 16. 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: 32 (1) "Accumulated contributions" means the sum of all amounts deducted from the 33 compensation of a member and credited to his or her individual account in the members' 34 contribution reserve account. 32 1 (2) "Active member" means any employee of a participating municipality as defined in this 2 section for whom the retirement system is currently receiving regular contributions pursuant to §§ 3 45-21-41, 45-21-41.1 or 45-21.2-14. 4 (3) "Actuarial reserve" means the present value of all payments to be made on account of 5 any annuity, retirement allowance, or benefit, computed upon the basis of mortality tables adopted 6 by the retirement board with regular interest. 7 8 (4) "Beneficiary" means any person in receipt of a retirement allowance, annuity, or other benefit as provided by this chapter. 9 (5) For purposes of this chapter, "domestic partner" shall be defined as a person who, prior 10 to the decedent's death, was in an exclusive, intimate and committed relationship with the 11 decedent, and who certifies by affidavit that their relationship met the following qualifications: 12 13 (i) Both partners were at least eighteen (18) years of age and were mentally competent to contract; 14 (ii) Neither partner was married to anyone else; 15 (iii) Partners were not related by blood to a degree which would prohibit marriage in the 16 17 18 19 20 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: 21 (A) Domestic partnership agreement or relationship contract; 22 (B) Joint mortgage or joint ownership of primary residence; 23 (C) Two (2) of: (I) Joint ownership of motor vehicle; (II) Joint checking account; (III) Joint 24 25 26 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. 27 (6) "Effective date of participation" means the date on which the provisions of this chapter 28 have become applicable to a municipality accepting the provisions of the chapter in the manner 29 stated in § 45-21-4. 30 (7) "Employee" means any regular and permanent employee or officer of any municipality, 31 whose business time at a minimum of twenty (20) hours a week is devoted to the service of the 32 municipality, including elective officials and officials and employees of city and town housing 33 authorities. Notwithstanding the previous sentence, the term "employee", for the purposes of this 34 chapter, does not include any person whose duties are of a casual or seasonal nature. The 33 1 retirement board shall decide who are employees within the meaning of this chapter, but in no case 2 shall it deem as an employee any individual who annually devotes less than twenty (20) business 3 hours per week to the service of the municipality and who receives less than the equivalent of 4 minimum wage compensation on an hourly basis for his or her services, except as provided in § 45- 5 21-14.1. Casual employees mean those persons hired for an occasional period or a period of 6 emergency to perform special jobs or functions not necessarily related to the work of regular 7 employees. Any commissioner of a municipal housing authority, or any member of a part-time 8 state board commission, committee or other authority is not deemed to be an employee within the 9 meaning of this chapter. 10 (8) (a) "Final compensation" for members who are eligible to retire on or prior to June 30, 2012 11 shall means the average annual compensation, pay, or salary of a member for services rendered during the 12 period of three (3) consecutive years within the total service of the member when the average was highest, 13 and as the term average annual compensation is further defined in subdivision 36-8-1(5)(a). For members 14 eligible to retire on or after July 1, 2012, "final compensation" means the average of the highest five (5) 15 consecutive years of compensation within the total service when the final compensation was the highest. 16 (b) For members who become eligible to retire on or after July 1, 2012, if more than one half 17 (1/2) of the member's total years of service consist of years of service during which the member devoted 18 less than thirty (30) business hours per week to the service of the municipality, but the member's average 19 compensation consists of three (3) or more years during which the member devoted more than thirty (30) 20 business hours per week to the service of a municipality, such member's average compensation shall 21 mean the average of the highest ten (10) consecutive years of compensation within the total service when 22 the average compensation was the highest, provided however, effective July 1, 2015, if such 23 member’s average compensation as defined in paragraph (a) above is equal to or less than thirty- 24 five thousand dollars ($35,000), such amount to be indexed annually in accordance with Section 25 45-21-52(d)(1)(B), such member’s average compensation shall mean the greater of: (i) the average 26 of the highest ten (10) consecutive years of compensation within the total service when the average 27 compensation was the highest, or (ii) the member’s average compensation as defined in paragraph 28 (a) above. To protect a member’s accrued benefit on June 30, 2012 under this §45-21-2(8)(b), in no 29 event shall a member’s average compensation be lower than his or her average compensation determined 30 as of June 30, 2012. 31 32 33 34 Notwithstanding the preceding provisions, in no event shall a member's final compensation be lower than his or her final compensation determined as of June 30, 2012. (9) "Fiscal year" means the period beginning on July 1 in any year and ending on June 30 of the next succeeding year. 34 1 (10) "Full actuarial costs" or "full actuarial value" mean the lump sum payable by a 2 member claiming service credit for certain employment for which payment is required, which is 3 determined according to the age of the member and his or her annual rate of compensation at the 4 time he or she applies for service credit, and which is expressed as a rate percent of the annual rate 5 of compensation to be multiplied by the number of years for which he or she claims the service 6 credit, as prescribed in a schedule adopted by the retirement board, from time to time, on the basis 7 of computation by the actuary. Except as provided in §§ 16-16-7.1, 36-5-3, 36-9-31, 36-10-10.4, 8 and subdivision 45-21-53: (i) All service credit purchases requested after June 16, 2009 and prior 9 to July 1, 2012, shall be at full actuarial value; and (ii) All service credit purchases requested after 10 June 30, 2012 shall be at full actuarial value which shall be determined using the system's assumed 11 investment rate of return minus one percent (1%). 12 13 14 15 (11) "Governing body" means any and all bodies empowered to appropriate monies for, and administer the operation of, the units as defined in subdivision (1) of this section. (12) "Member" means any person included in the membership of the retirement system as provided in § 45-21-8. 16 (13) "Municipality" means any town or city in the state of Rhode Island, any city or town 17 housing authority, fire, water, sewer district, regional school district, public building authority as 18 established by chapter 14 of title 37, or any other municipal financed agency to which the 19 retirement board has approved admission in the retirement system. 20 21 (14) "Participating municipality" means any municipality which has accepted this chapter, as provided in § 45-21-4. 22 (15) "Prior service" means service as a member rendered before the effective date of 23 participation as defined in this section, certified on his or her prior service certificate, and 24 allowable as provided in § 45-21-15. 25 26 (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. 27 (17) "Retirement allowance" or "annuity" means the amounts paid to any member of the 28 municipal employees' retirement system of the state of Rhode Island, or a survivor of the member, 29 as provided in this chapter. All retirement allowances or annuities shall be paid in equal monthly 30 installments for life, unless otherwise specifically provided. 31 32 33 34 (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. 35 1 2 (20) "Service" means service as an employee of a municipality of the state of Rhode Island as defined in subdivision (7). 3 4 (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. 5 6 (22) Any term not specifically defined in this chapter and specifically defined in chapters 36-8 through 36-10 shall have the same definition as set forth in chapters 36-8 through 36-10. 7 8 SECTION 17. “Retirement of Municipal Employees” is hereby amended to read as follows: 9 10 Section 45-21-16 of the General Laws in Chapter 45-21 entitled § 45-21-16 Retirement on service allowance. – Retirement of a member on a service retirement allowance shall be made by the retirement board as follows: 11 (1)(i) Any member who is eligible to retire on or before June 30, 2012, may retire upon the 12 member's written application to the retirement board as of the first day of the calendar month in 13 which the application was filed, provided the member was separated from service prior to the 14 application, and provided, further, that if separation from service occurs during the month in which 15 application is filed, the effective date is the first day following the separation from service, 16 provided that the member at the time so specified for the member's retirement has attained the 17 applicable minimum retirement age and has completed at least ten (10) years of total service or 18 who, regardless of age, completed thirty (30) years of total service, and notwithstanding that 19 during the period of notification the member has separated from service. The minimum ages for 20 service retirement (except for employees completing thirty (30) years of service) is fifty-eight (58) 21 years. 22 23 (ii) Effective July 1, 2012, the following shall apply to all members not eligible to retire prior to July 1, 2012: 24 (A) A member with contributory service on or after July 1, 2012, shall be eligible to retire 25 upon the completion of at least five (5) years of contributory service and attainment of the 26 member's Social Security retirement age. 27 (B) For members with five (5) or more years of contributory service as of June 30, 2012, 28 with contributory service on and after July 1, 2012, who have a retirement age of Social Security 29 Retirement Age, the retirement age will be adjusted downward in proportion to the amount of 30 service the member has earned as of June 30, 2012, but in no event shall a member's retirement age 31 under this subparagraph (B) be prior to the attainment of age fifty-nine (59) or prior to the 32 member's retirement age determined under the laws in effect on June 30, 2012. The proportional 33 formula shall work as follows: 34 (1) The formula shall determine the first age of retirement eligibility under the laws in 36 1 effect on June 30, 2012 which shall then be subtracted from Social Security retirement age; 2 (2) The formula shall then take the member's total service credit as of June 30, 2012 as the 3 numerator and the projected service at retirement age in effect on June 30, 2012 as the 4 denominator; 5 6 (3) The fraction determined in (2) shall then be multiplied by the age difference determined in (1) to apply a reduction in years from Social Security retirement age. 7 (C) Effective July 1, 2015, A a member who has completed twenty (20) or more years of 8 total service and who has attained an age within five (5) years of the eligible retirement age under 9 subparagraphs (ii)(A) or (ii)(B) above or subparagraph (iii) below, may elect to retire provided that 10 the retirement allowance shall be reduced actuarially for each month that the age of the member is 11 less than the eligible retirement age under subparagraphs (ii)(A) or (ii)(B) above or subparagraph 12 (iii) below in accordance with the following table: 13 Year Preceding Retirement 14 For Year 1 9% .75% 15 For Year 2 8% .667% 16 For Year 3 7% .583% 17 For Year 4 7% .583% 18 For Year 5 7% .583%. Cumulative Annual Reduction Cumulative Monthly Reduction 19 (D)(1) Notwithstanding any other provisions of section 42-21-16(1)(ii), a member who has 20 completed ten (10) or more years of contributory service as of June 30, 2012, may elect to retire at 21 his or her eligible retirement date as determined under paragraph (i) above provided that a member 22 making an election under this paragraph shall receive the member's retirement benefit determined 23 and calculated based on the member's service and average compensation as of June 30, 2012. This 24 provision shall be interpreted and administered in a manner to protect a member's accrued benefit 25 on June 30, 2012. 26 (iii) Notwithstanding any other provisions of subparagraph (ii) above, effective July 1, 27 2015, members in active service shall be eligible to retire upon the earlier of (I) the attainment of 28 at least age sixty-five (65) and the completion of at least thirty (30) years of total service, or the 29 attainment of at least age sixty-four (64) and the completion of at least thirty-one (31) years of 30 total service, or the attainment of at least age sixty-three (63) and the completion of at least thirty- 31 two (32) years of total service, or the attainment of at least age sixty-two (62) and the completion 32 of at least thirty-three (33) years of total service, or (II) the member’s retirement eligibility date 33 under subparagraphs (ii)(A) or (ii)(B) above. 34 (2) Except as specifically provided in §§ 45-21-19 – 45-21-22, no member is eligible for 37 1 2 3 4 5 6 7 8 9 10 11 pension benefits under this chapter unless: (I) On or prior to June 30, 2012 the member has been a contributing member of the employees' retirement system for at least ten (10) years; or (II) For members in active contributory service on or after July 1, 2012, the member shall have been a contributing member of the employees' retirement system for at least five (5) years. (i) Provided, however, a person who has ten (10) years service credit on or before June 16, 1991 is vested. (ii) Furthermore, any past service credits purchased in accordance with § 45-21-62 are counted towards vesting. (iii) Any person who becomes a member of the employees' retirement system pursuant to § 45-21-4 shall be considered a contributing member for the purpose of this chapter. 12 (iv) Notwithstanding any other provision of law, no more than five (5) years of service 13 credit may be purchased by a member of the System. The five (5)-year limit does not apply to any 14 purchases made prior to the effective date of this provision. A member who has purchased more 15 than five (5) years of service credit maximum, before January 1, 1995, shall be permitted to apply 16 the purchases towards the member's service retirement. However, no further purchase will be 17 permitted. Repayment, in accordance with applicable law and regulation, of any contribution 18 previously withdrawn from the System is not deemed a purchase of service credit. 19 20 21 22 (v) Notwithstanding any other provision of law, effective July 1, 2012, except for purchases under §§ 16-16-7.1, 36-5-3, 36-9-31, 36-10-10.4, and 45-21-53: (I) For service purchases for time periods prior to a member's initial date of hire; the purchase must be made within three (3) years of the member's initial date of hire; and 23 (II) For service purchases for time periods for official periods of leave as authorized by 24 law, the purchase must be made within three (3) years of the time the official leave was concluded 25 by the member. 26 27 Notwithstanding (I) and (II) above, service purchases from time periods prior to June 30, 2012 may be made on or prior to June 30, 2015. 28 (3) No member of the municipal employees' retirement system is permitted to purchase 29 service credits for casual, temporary, emergency or seasonal employment, for employment as a 30 page in the general assembly, or for employment at any state college or university while the 31 employee is a student or graduate assistant of the college or university. 32 (4) A member does not receive service credit in this retirement system for any year or 33 portion of a year, which counts as service credit in any other retirement system in which the 34 member is vested or from which the member is receiving a pension and/or any annual payment for 38 1 life. This subsection does not apply to any payments received pursuant to the Federal Social 2 Security Act or to payments from a military pension earned prior to participation in state or 3 municipal employment, or to military service credits earned prior to participation in state or 4 municipal employment. 5 (5) A member who seeks to purchase or receive service credit in this retirement system has 6 the affirmative duty to disclose to the retirement board whether or not he or she is a vested member 7 in any other retirement system and/or is receiving a pension retirement allowance or any annual 8 payment for life. The retirement board has the right to investigate whether or not the member has 9 utilized the same time of service for credit in any other retirement system. The member has an 10 affirmative duty to cooperate with the retirement board including, by way of illustration and not by 11 way of limitation, the duty to furnish or have furnished to the retirement board any relevant 12 information which is protected by any privacy act. 13 (6) A member who fails to cooperate with the retirement board shall not have the time of 14 service counted toward total service credit until a time that the member cooperates with the 15 retirement board and until a time that the retirement board determines the validity of the service 16 credit. 17 (7) A member who knowingly makes a false statement to the retirement board regarding 18 service time or credit is not entitled to a retirement allowance and is entitled only to the return of 19 his or her contributions without interest. 20 21 SECTION 18. Section 45-21-17 of the General Laws in Chapter 45-21 entitled “Retirement of Municipal Employees” is hereby amended to read as follows: 22 § 45-21-17 Service retirement allowance. – (a) Upon retirement from service after 23 January 1, 1969, a member shall receive a retirement allowance which is a life annuity terminable 24 upon death of the annuitant and is an amount is equal to two percent (2%) of final compensation 25 multiplied by the number of years of total service, not to exceed thirty-seven and one-half (37 1/2) 26 years for services on and prior to June 30, 2012. For service on and after July 1, 2012: (i) for 27 members with fewer than twenty (20) years of total service as of June 30, 2012, a member's 28 retirement allowance shall be equal to one percent (1%) of the member's final compensation 29 multiplied by the member's years of total service on and after July 1, 2012, and (ii) for members 30 with twenty (20) or more years of total service as of June 30, 2012, a member’s retirement 31 allowance shall be equal to one percent (1%) of the member’s average compensation multiplied by 32 the member’s years of total service between July 1, 2012 and June 30, 2015, and two percent (2%) 33 of the member’s average compensation multiplied by the member’s years of total service on and 34 after July 1, 2015. For purposes of computing a member’s total service under the preceding 39 1 sentence, service purchases shall be included in total service only with respect to those service 2 purchases approved prior to June 30, 2012 and those applications for service purchases received by 3 the retirement system on or before June 30, 2012. 4 allowance exceed seventy-five percent (75%) of the member's final compensation. Provided, 5 however, that every person elected prior to July 1, 2012 who has served as a part time elected 6 official of the city of Cranston for a period of ten (10) years, is entitled to receive, upon retirement 7 from that part time service, and not being otherwise regularly employed by the city of Cranston in 8 which that person has served, a service retirement allowance equivalent to fifty percent (50%) of 9 the salary received at the time of retirement by that part time elected official; and, provided, 10 further, that if that person retires after a period of service greater than ten (10) years, the person is 11 entitled to receive an additional service retirement allowance equivalent to five percent (5%) of the 12 salary received at the time of retirement for each whole year of service, in excess of ten (10) years 13 up to a maximum additional allowance equivalent to fifty percent (50%) of the salary received. 14 15 In no event shall a member's retirement (b) This section also applies to any former part time elected official of the city of Cranston who is presently receiving retirement benefits from the municipal retirement system. 16 (c) Every person elected prior to July 1, 2012 who serves or has served at least four (4) 17 years as a part time elected official of the city of Cranston may include that person's years of 18 service as a member of the general assembly, and any other credits acquired while serving as a 19 legislator, when computing the person's period of service to the city of Cranston pursuant to the 20 provisions of this section. 21 22 SECTION 19. Section 45-21-41 of the General Laws in Chapter 45-21 entitled “Retirement of Municipal Employees” is hereby amended to read as follows: 23 § 45-21-41 Members' contributions – Payroll deductions – Certification to board. – (a) 24 Prior to July 1, 2012, each member shall contribute an amount equal to six percent (6%) of salary 25 or compensation earned and accruing to the member; provided, that contributions by any member 26 cease when the member has completed the maximum amount of service credit attainable. Special 27 compensation for additional fees shall not be considered as compensation for contribution 28 purposes. Effective July 1, 2012, each member shall contribute an amount equal to one percent 29 (1%) of his or her compensation as his or her share of the cost. Effective July 1, 2015, each 30 member with twenty (20) or more years of total service as of June 30, 2012 shall contribute an 31 amount equal to eight and one-quarter percent (8.25%) of compensation. 32 (b) Each municipality shall deduct the previously stated rate from the compensation of each 33 member on each and every payroll of the municipality, and the deduction made during the entire 34 time a member is in service subject to termination as stated in the foregoing paragraph. 40 1 (c) The deductions provided for in this section shall be made notwithstanding that the 2 minimum compensation provided for by law for any member is reduced by the compensation. 3 Every member is deemed to consent and agree to the deductions made and provided for in this 4 section, and shall receipt for his or her full salary or compensation; and payment of salary or 5 compensation less those deductions are a full and complete discharge and acquittance of all claims 6 and demands for the services rendered by the person during the period covered by the payment 7 except as to the benefits provided under this chapter. Each participating municipality shall certify 8 to the retirement board the amounts deducted from the compensation of members. Each of the 9 amounts, when deducted, shall be credited to an individual account of the member from whose 10 11 12 compensation the deduction was made. SECTION 20. Chapter 45-21 entitled “Retirement of Municipal Employees” is hereby amended by adding the following section thereto: 13 § 45-21-43.1 Actuarial cost method. – (a) To determine the employer contribution rate 14 for any participating municipality, the actuary shall compute the costs under chapters 21 and 21.2 15 of title 45 using the entry age normal cost method. 16 (b) The determination of the employer contribution rate for fiscal year 2013 shall include a 17 re-amortization of the Unfunded Actuarial Accrued Liability (UAAL) over a closed twenty-five 18 (25) year period. After an initial period of five (5) years, future actuarial gains and losses occurring 19 within a plan year will be amortized over individual new twenty (20) year closed periods. 20 (c) The determination of the employer contribution rate commencing with fiscal year 2017 21 shall include a re-amortization of the current Unfunded Actuarial Accrued Liability as of June 30, 22 2014 over a closed twenty-five (25) year period. Future actuarial gains and losses occurring within 23 a plan year will be amortized over individual new twenty (20) year closed periods. Employers shall 24 have the one-time option before August 1, 2015 to remain under the amortization schedule set forth 25 in subsection (b) above. 26 27 SECTION 21. Section 45-21-52 of the General Laws in Chapter 45-21 entitled “Retirement of Municipal Employees” is hereby amended to read as follows: 28 § 45-21-52 Automatic increase in service retirement allowance. – (a) The local 29 legislative bodies of the cities and towns may extend to their respective employees automatic 30 adjustment increases in their service retirement allowances, by a resolution accepting any of the 31 plans described in this section: 32 (1) Plan A. All employees and beneficiaries of those employees receiving a service 33 retirement or disability retirement allowance under the provisions of this chapter on December 31 34 of the year their city or town accepts this section, receive a cost of living adjustment equal to one 41 1 and one-half percent (1 1/2%) per year of the original retirement allowance, not compounded, for 2 each calendar year the retirement allowance has been in effect. This cost of living adjustment is 3 added to the amount of the retirement allowance as of January 1 following acceptance of this 4 provision, and an additional one and one-half percent (1 1/2%) is added to the original retirement 5 allowance in each succeeding year during the month of January, and provided, further, that this 6 additional cost of living increase is three percent (3%) for the year beginning January 1 of the year 7 the plan is accepted and each succeeding year. 8 (2) Plan B. All employees and beneficiaries of those employees receiving a retirement 9 allowance under the provisions of this chapter on December 31 of the year their municipality 10 accepts this section, receive a cost of living adjustment equal to three percent (3%) of their original 11 retirement allowance. This adjustment is added to the amount of the retirement allowance as of 12 January 1 following acceptance of this provision, and an additional three percent (3%) of the 13 original retirement allowance, not compounded, is payable in each succeeding year in the month of 14 January. 15 (3) Plan C. All employees and beneficiaries of those employees who retire on or after 16 January 1 of the year following acceptance of this section, on the first day of January next 17 following the date of the retirement, receive a cost of living adjustment in an amount equal to three 18 percent (3%) of the original retirement allowance. 19 20 (b) In each succeeding year in the month of January, the retirement allowance is increased an additional three percent (3%) of the original retirement allowance, not compounded. 21 (c) This subsection (c) shall be effective for the period July 1, 2012 through June 30, 2015. 22 (1) Notwithstanding any other paragraphs of this section, and subject to paragraph (c)(2) 23 below, for all present and former employees, active and retired members, and beneficiaries 24 receiving any retirement, disability or death allowance or benefit of any kind by reason of adoption 25 of this section by their employer, the annual benefit adjustment provided in any calendar year 26 under this section shall be equal to (A) multiplied by (B) where (A) is equal to the percentage 27 determined by subtracting five and one-half percent (5.5%) (the "subtrahend") from the Five-Year 28 Average Investment Return of the retirement system determined as of the last day of the plan year 29 preceding the calendar year in which the adjustment is granted, said percentage not to exceed four 30 percent (4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of the 31 member's retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement 32 allowance, such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same 33 percentage as determined under (c)(1)(A) above. The "Five-Year Average Investment Return" shall 34 mean the average of the investment returns of the most recent five (5) plan years as determined by 42 1 the retirement board. Subject to paragraph (c)(2) below, the benefit adjustment provided by this 2 paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date on 3 which the retiree reaches his or her Social Security retirement age, whichever is later; or for 4 municipal police and fire retiring under the provisions of chapter 45-21.2, the benefit adjustment 5 provided by this paragraph shall commence on the later of the third (3rd) anniversary of the date of 6 retirement or the date on which the retiree reaches age fifty-five (55). In the event the retirement 7 board adjusts the actuarially assumed rate of return for the system, either upward or downward, the 8 subtrahend shall be adjusted either upward or downward in the same amount. 9 (2) Except as provided in paragraph (c)(3) the benefit adjustments provided under this 10 section for any plan year shall be suspended in their entirety for each municipal plan within the 11 municipal employees retirement system unless the municipal plan is determined to be funded at a 12 GASB Funded Ratio equal to or greater than eighty percent (80%) as of the end of the immediately 13 preceding plan year in accordance with the retirement system's actuarial valuation report as 14 prepared by the system's actuary, in which event the benefit adjustment will be reinstated for all 15 members for such plan year. 16 In determining whether a funding level under this paragraph (c)(2) has been achieved, the actuary 17 shall calculate the funding percentage after taking into account the reinstatement of any current or 18 future benefit adjustment provided under this section. "GASB Funded Ratio" shall mean the ratio 19 of the actuarial value of assets to the actuarial accrued liability. 20 (3) Notwithstanding paragraph (c)(2), for each municipal plan that has a GASB Funded 21 Ratio of less than eighty percent (80%) as of June 30, 2012, in each fifth plan year commencing 22 after June 30, 2012 commencing with the plan year ending June 30, 2017, and subsequently at 23 intervals of five (5) plan years, a benefit adjustment shall be calculated and made in accordance 24 with paragraph (c)(1) above until the municipal plan's GASB Funded Ratio exceeds eighty percent 25 (80%). 26 (d) This subsection (d) shall become effective July 1, 2015. 27 (1)(A) As soon as administratively reasonable following the enactment into law of this 28 paragraph (d)(1)(A), a one-time benefit adjustment shall be provided to members and/or 29 beneficiaries of members who retired on or before June 30, 2012, in the amount of 2% of the lesser 30 of either the employee’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 31 the member’s retirement allowance. 32 regard to the retiree’s age or number of years since retirement. This one-time benefit adjustment shall be provided without 33 (B) Notwithstanding the prior paragraphs of this section, for all present and former 34 employees, active and retired employees, and beneficiaries receiving any retirement, disability or 43 1 death allowance or benefit of any kind by reason of adoption of this section by their employer, the 2 annual benefit adjustment provided in any calendar year under this section for adjustments on and 3 after January 1, 2016, and subject to paragraph (d)(2) below, shall be equal to (I) multiplied by 4 (II): 5 (I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 6 (i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 7 (the "subtrahend") from the Five-Year Average Investment Return of the retirement system 8 determined as of the last day of the plan year preceding the calendar year in which the adjustment 9 is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 10 (0%). 11 returns of the most recent five (5) plan years as determined by the retirement board. In the event 12 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 13 downward, the subtrahend shall be adjusted either upward or downward in the same amount. The "Five-Year Average Investment Return" shall mean the average of the investment 14 (ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 15 Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 16 Statistics determined as of September 30 of the prior calendar year. 17 18 In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent. 19 (II) is equal to the lesser of either the member's retirement allowance or the first twenty- 20 five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 21 to be indexed annually in the same percentage as determined under (d)(1)(B)(I) above. 22 The benefit adjustments provided by this paragraph (d)(1)(B) shall be provided to all 23 retirees entitled to receive a benefit adjustment as of June 30, 2012 under the law then in effect, 24 and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary 25 of the date of retirement or the date on which the retiree reaches his or her Social Security 26 retirement age, whichever is later; or for municipal police and fire retiring under the provisions of 27 section 45-21.2-5(b)(1)(A), the benefit adjustment provided by this paragraph shall commence on 28 the later of the third (3rd) anniversary of the date of retirement or the date on which the retiree 29 reaches age fifty-five (55); or for municipal police and fire retiring under the provisions of section 30 45-21.2-5(b)(1)(B), the benefit adjustment provided by this paragraph shall commence on the later 31 of the third (3rd) anniversary of the date of retirement or the date on which the retiree reaches age 32 fifty (50). 33 (2) Except as provided in paragraph (d)(3), the benefit adjustments under paragraph 34 (d)(1)(B) for any plan year shall be suspended in their entirety for each municipal plan within the 44 1 municipal employees retirement system unless the municipal plan is determined to be funded at a 2 Funded Ratio equal to or greater than eighty percent (80%) as of the end of the immediately 3 preceding plan year in accordance with the retirement system's actuarial valuation report as 4 prepared by the system's actuary, in which event the benefit adjustment will be reinstated for all 5 members for such plan year. 6 In determining whether a funding level under this paragraph (d)(2) has been achieved, the 7 actuary shall calculate the funding percentage after taking into account the reinstatement of any 8 current or future benefit adjustment provided under this section. 9 (3) Notwithstanding paragraph (d)(2), in each fourth plan year commencing after June 30, 10 2012 commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 11 plan years, (i) a benefit adjustment shall be calculated and made in accordance with paragraph 12 (d)(1)(B) above and (ii) effective for members and/or beneficiaries of members who retired on or 13 before June 30, 2015, the dollar amount in paragraph (d)(1)(B)(II) of twenty-five thousand eight 14 hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 15 dollars ($31,026) until the municipal plan's Funded Ratio exceeds eighty percent (80%). 16 (d)(e) Upon acceptance of any of the plans in this section, each employee shall on January 17 1 next succeeding the acceptance, contribute by means of salary deductions, pursuant to § 45-21- 18 41, one percent (1%) of the employee's compensation concurrently with and in addition to 19 contributions otherwise being made to the retirement system. 20 21 (e)(f) The city or town shall make any additional contributions to the system, pursuant to the terms of § 45-21-42, for the payment of any benefits provided by this section. 22 (f)(g) The East Greenwich town council shall be allowed to accept Plan C of § 45-21- 23 52(a)(3) for all employees of the town of East Greenwich who either, pursuant to contract 24 negotiations, bargain for Plan C, or who are non-union employees who are provided with Plan C 25 and who shall all collectively be referred to as the "Municipal-COLA Group" and shall be separate 26 from all other employees of the town and school department, union or non-union, who are in the 27 same pension group but have not been granted Plan C benefits. Upon acceptance by the town 28 council, benefits in accordance with this section shall be available to all such employees who retire 29 on or after January 1, 2003. 30 (h) Effective for members and or beneficiaries of members who have retired on or before 31 July 1, 2015, and without regard to whether the retired member or beneficiary is receiving a benefit 32 adjustment under this § 45-21-52, a one-time stipend of five hundred dollars ($500) shall be 33 payable within sixty (60) days following the enactment of the legislation implementing this 34 provision, and a second one-time stipend of five hundred dollars ($500) in the same month of the 45 1 following year. These stipends shall not be considered cost of living adjustments under the prior 2 provisions of this Section 45-21-52. 3 4 SECTION 22. Section 42-28-22 of the General Laws in Chapter 42-28 entitled “State Police” is hereby amended to read as follows: 5 § 42-28-22 Retirement of members. – (a) Whenever any member of the state police hired 6 prior to July 1, 2007 has served for twenty (20) years, he or she may retire therefrom or he or she 7 may be retired by the superintendent with the approval of the governor, and in either event a sum 8 equal to one-half (1/2) of the whole salary for the position from which he or she retired determined 9 on the date he or she receives his or her first retirement payment shall be paid him or her during 10 life. 11 (b) For purposes of this section, the term "whole salary" means: 12 (1) For each member who retired prior to July 1, 1966, "whole salary" means the base 13 salary for the position from which he or she retired as the base salary for that position was 14 determined on July 31, 1972; 15 (2) For each member who retired between July 1, 1966 and June 30, 1973, "whole salary" 16 means the base salary for the position from which he or she retired as the base salary, implemented 17 by the longevity increment, for that position was determined on July 31, 1972 or on the date of his 18 or her retirement, whichever is greater; 19 (3) For each member who retired or who retires after July 1, 1973 "whole salary" means the 20 base salary, implemented by the longevity increment, holiday pay, and clothing allowance, for the 21 position from which he or she retired or retires. 22 (c) Any member who retired prior to July 1, 1977 shall receive a benefits payment 23 adjustment equal to three percent (3%) of his or her original retirement, as determined in 24 subsection (b) of this section, in addition to his or her original retirement allowance. In each 25 succeeding year thereafter during the month of January, the retirement allowance shall be increased 26 an additional three percent (3%) of the original retirement allowance, not compounded, to be 27 continued until January 1, 1991. For the purposes of the computation, credit shall be given for a 28 full calendar year regardless of the effective date of the service retirement allowance. For purposes 29 of this subsection, the benefits payment adjustment shall be computed from January 1, 1971 or the 30 date of retirement, whichever is later in time. 31 (2) Any member of the state police who retires pursuant to the provisions of this chapter on 32 or after January 1, 1977, shall on the first day of January, next following the third anniversary date 33 of the retirement receive a benefits payment adjustment, in addition to his or her retirement 34 allowance, in an amount equal to three percent (3%) of the original retirement allowance. In each 46 1 succeeding year thereafter during the month of January, the retirement allowance shall be increased 2 an additional three percent (3%) of the original retirement allowance, not compounded, to be 3 continued until January 1, 1991. For the purposes of the computation, credit shall be given for a 4 full calendar year regardless of the effective date of the service retirement allowance. 5 (3) Any retired member of the state police who is receiving a benefit payment adjustment 6 pursuant to subdivisions (1) and (2) of this section shall beginning January 1, 1991 and ending 7 June 30, 2012, receive a benefits payment adjustment equal to fifteen hundred dollars ($1,500). 8 (d) The benefits payment adjustment as provided in this section shall apply to and be in 9 addition to the retirement benefits under the provisions of § 42-28-5, and to the injury and death 10 benefits under the provisions of § 42-28-21. 11 (e) Any member who retires after July 1, 1972 and is eligible to retire prior to July 1, 2012 12 and who has served beyond twenty (20) years shall be allowed an additional amount equal to three 13 percent (3%) for each completed year served after twenty (20) years, but in no event shall the 14 original retirement allowance exceed sixty-five percent (65%) of his or her whole salary as defined 15 in subsection (b) hereof or sixty-five percent (65%) of his or her salary as defined in subsection (b) 16 hereof in his or her twenty-fifth (25th) year whichever is less. 17 (2) Each member who retired prior to July 1, 1975, shall be entitled to all retirement 18 benefits as set forth above or shall be paid benefits as set forth in subdivision (b)(1) with "whole 19 salary" meaning the base salary for the position from which he or she retired as the base salary for 20 the position was determined on July 1, 1975, whichever is greater. 21 (f) Any member who retires, has served as a member for twenty (20) years or more, and 22 who served for a period of six (6) months or more of active duty in the armed service of the United 23 States or in the merchant marine service of the United States as defined in § 2 of chapter 1721 of 24 the Public Laws, 1946, may purchase credit for such service up to a maximum of two (2) years; 25 provided that any member who has served at least six (6) months or more in any one year shall be 26 allowed to purchase one year for such service and any member who has served a fraction of less 27 than six (6) months in his or her total service shall be allowed to purchase six (6) months' credit for 28 such service. 29 (2) The cost to purchase these credits shall be ten percent (10%) of the member's first year 30 salary as a state policeman multiplied by the number of years and/or fraction thereof of such armed 31 service up to a maximum of two (2) years. The purchase price shall be paid into the general fund. 32 For members hired on or after July 1, 1989, the purchase price shall be paid into a restricted 33 revenue account entitled "state police retirement benefits" and shall be held in trust. 34 (3) There will be no interest charge provided the member makes such purchase during his 47 1 or her twentieth (20th) year or within five (5) years from May 18, 1981, whichever is later, but will 2 be charged regular rate of interest as defined in § 36-8-1 as amended to date of purchase from the 3 date of his or her twentieth (20th) year of state service or five (5) years from May 18, 1981, 4 whichever is later. 5 (4) Any member who is granted a leave of absence without pay for illness, injury or any 6 other reason may receive credit therefor by making the full actuarial cost as defined in subdivision 7 36-8-1(10); provided the employee returns to state service for at least one year upon completion of 8 the leave. 9 (5) In no event shall the original retirement allowance exceed sixty-five percent (65%) of 10 his or her whole salary as defined in subsection (b) hereof or sixty-five percent (65%) of his or her 11 salary as defined in subsection (b) hereof in his or her twenty-fifth (25th) year, whichever is less. 12 (6) Notwithstanding any other provision of law, no more than five (5) years of service 13 credit may be purchased by a member of the system. The five (5) year limit shall not apply to any 14 purchases made prior to January 1, 1995. A member who has purchased more than five (5) years of 15 service credits before January 1, 1995, shall be permitted to apply those purchases towards the 16 member's service retirement. However, no further purchase will be permitted. Repayment in 17 accordance with applicable law and regulation of any contribution previously withdrawn from the 18 system shall not be deemed a purchase of service credit. 19 (g) The provisions of this section shall not apply to civilian employees in the Rhode Island 20 state police; and, further, from and after April 28, 1937, chapters 8 – 10, inclusive, of title 36 shall 21 not be construed to apply to the members of the Rhode Island state police, except as provided by 22 §§ 36-8-3, 36-10-1.1, 42-28-22.1, and 42-28-22.2, and section 36-8-1(5) and (8)(a) effective July 23 1, 2012. 24 (h) Any member of the state police other than the superintendent of state police, who is 25 hired prior to July 1, 2007 and who has served for twenty-five (25) years or who has attained the 26 age of sixty-two (62) years, whichever shall first occur, shall retire therefrom. 27 (i) Any member of the state police, other than the superintendent, who is hired on or after 28 July 1, 2007 and who has served for twenty-five (25) years, may retire therefrom or he or she may 29 be retired by the superintendent with the approval of the governor, and shall be entitled to a 30 retirement allowance of fifty percent (50%) of his or her "whole salary" as defined in subsection 31 (b) hereof. 32 (2) Any member of the state police who is hired on or after July 1, 2007 may serve up to a 33 maximum of thirty (30) years, and shall be allowed an additional amount equal to three percent 34 (3.0%) for each completed year served after twenty-five (25) years, but in no event shall the 48 1 original retirement allowance exceed sixty-five percent (65%) of his or her "whole salary" as 2 defined in subsection (b) hereof. 3 (j) Effective July 1, 2012, any other provision of this section notwithstanding: 4 (j) Any member of the state police, other than the superintendent of state police, who is not 5 eligible to retire on or prior to June 30, 2012 may retire at any time subsequent to the date the 6 member's retirement allowance equals or exceeds fifty percent (50%) of average compensation as 7 defined in section 36-8-1(5)(a), provided that a member shall retire upon the first to occur of: 8 (i) The date the member's retirement allowance equals sixty-five percent (65%); or 9 (ii) The later of the attainment of age sixty-two (62) or completion of five (5) years of 10 service; provided however, any current member as of June 30, 2012 who has not accrued fifty 11 percent (50%) upon attaining the age of sixty-two (62) shall retire upon accruing fifty percent 12 (50%); and upon retirement a member shall receive a retirement allowance which shall equal: 13 (A) For members hired prior to July 1, 2007 the sum of (i), (ii) and (iii) where 14 (i) Is calculated as the member's years of total service before July 1, 2012 multiplied by 15 two and one half percent (2.5%) of average compensation for a member's first twenty (20) total 16 years, 17 (ii) Is calculated as the member's years of total service before July 1, 2012 in excess of 18 twenty (20) years not to exceed twenty-five (25) years multiplied by three percent (3%) of average 19 compensation, and 20 21 (iii) Is the member's years of total service on or after July 1, 2012 multiplied by two percent (2%) of average compensation as defined in § 36-8-1(5)(a). 22 (B) For members hired on or after July 1, 2007, the member's retirement allowance shall be 23 calculated as the member's years of total contributory service multiplied by two percent (2%) of 24 average compensation. 25 (C) Any member of the state police who is eligible to retire on or prior to June 30, 2012 26 shall retire with a retirement allowance calculated in accordance with paragraph (a) and (e) above 27 except that whole salary shall be defined as final compensation where compensation for purposes 28 of this section and § 42-28-22.1 includes base salary, longevity and holiday pay. 29 30 31 32 (D) Notwithstanding the preceding provisions, in no event shall a member's final compensation be lower than his or her final compensation determined as of June 30, 2012. (2) In no event shall a member's original retirement allowance under any provisions of this section exceed sixty-five percent (65%) of his or her average compensation. 33 (3) For each member who retires on or after July 1, 2012, except as provided in paragraph 34 (j)(1)(C) above, compensation and average compensation shall be defined in accordance with § 3649 1 8-1(5)(a) and (8), provided that for a member whose regular work period exceeds one hundred 2 forty-seven (147) hours over a twenty-four (24) day period at any time during the four (4) year 3 period immediately prior to his/her retirement that member shall have up to four hundred (400) 4 hours of his/her pay for regularly scheduled work earned during this period shall be included as 5 "compensation" and/or "average compensation" for purposes of this section and § 42-28-22.1. 6 (4) This subsection (4) shall be effective for the period July 1, 2012 through June 30, 2015. 7 Notwithstanding the prior paragraphs of this section, and subject to paragraph (4)(ii) below, for all 8 present and former members, active and retired members, and beneficiaries receiving any 9 retirement, disability or death allowance or benefit of any kind, whether for or on behalf of a non- 10 contributory member or contributory member, the annual benefit adjustment provided in any 11 calendar year under this section shall be equal to (A) multiplied by (B) where (A) is equal to the 12 percentage determined by subtracting five and one-half percent (5.5%) (the "subtrahend") from the 13 Five-Year Average Investment Return of the retirement system determined as of the last day of the 14 plan year preceding the calendar year in which the adjustment is granted, said percentage not to 15 exceed four percent (4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of 16 the member's retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement 17 allowance, such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same 18 percentage as determined under (4)(i)(A) above. The "Five-Year Average Investment Return" shall 19 mean the average of the investment returns for the most recent five (5) plan years as determined by 20 the retirement board. Subject to paragraph (4)(ii) below, the benefit adjustment provided by this 21 paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date on 22 which the retiree reaches age fifty-five (55), whichever is later. In the event the retirement board 23 adjusts the actuarially assumed rate of return for the system, either upward or downward, the 24 subtrahend shall be adjusted either upward or downward in the same amount. 25 (ii) Except as provided in paragraph (4)(iii), the benefit adjustments under this section for 26 any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the Employees' 27 Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 28 Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty 29 percent (80%) in which event the benefit adjustment will be reinstated for all members for such 30 plan year. 31 In determining whether a funding level under this paragraph (4)(ii) has been achieved, the 32 actuary shall calculate the funding percentage after taking into account the reinstatement of any 33 current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall mean 34 the ratio of the actuarial value of assets to the actuarial accrued liability. 50 1 (iii) Notwithstanding paragraph (4)(ii), in each fifth plan year commencing after June 30, 2 2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 3 (5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph 4 (4)(i) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, 5 the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated 6 by the system's actuary on an aggregate basis, exceeds eighty percent (80%). 7 8 (iv) The provisions of this paragraph (j)(4) of § 42-28-22 shall become effective July 1, 2012 and shall apply to any benefit adjustment not granted on or prior to June 30, 2012. 9 (v) The cost-of-living adjustment as provided in this paragraph (j)(4) shall apply to and be 10 in addition to the retirement benefits under the provisions of § 42-28-5 and to the injury and death 11 benefits under the provisions of § 42-28-21. 12 (5) This subsection (5) shall become effective July 1, 2015. 13 (i)(A) As soon as administratively reasonable following the enactment into law of this 14 paragraph (5)(i)(A), a one-time benefit adjustment shall be provided to members and/or 15 beneficiaries of members who retired on or before June 30, 2012, in the amount of 2% of the lesser 16 of either the member’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 17 the member’s retirement allowance. 18 regard to the retiree’s age or number of years since retirement. This one-time benefit adjustment shall be provided without 19 (B) Notwithstanding the prior paragraphs of this section, for all present and former 20 members, active and retired members, and beneficiaries receiving any retirement, disability or 21 death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year 22 under this section for adjustments on and after January 1, 2016, and subject to paragraph (5)(ii) 23 below, shall be equal to (I) multiplied by (II): 24 (I) shall equal the sum of fifty percent (50%) of (1) plus fifty percent (50%) of (2) where: 25 (1) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 26 (the "subtrahend") from the Five-Year Average Investment Return of the retirement system 27 determined as of the last day of the plan year preceding the calendar year in which the adjustment 28 is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 29 (0%). 30 returns of the most recent five (5) plan years as determined by the retirement board. In the event 31 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 32 downward, the subtrahend shall be adjusted either upward or downward in the same amount. The "Five-Year Average Investment Return" shall mean the average of the investment 33 (2) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 34 Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 51 1 2 3 Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (1) plus (2) exceed three and one-half percent (3.5%) or be less than zero percent. 4 (II) is equal to the lesser of either the member's retirement allowance or the first twenty- 5 five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount 6 to be indexed annually in the same percentage as determined under (5)(i)(B)(I) above. 7 The benefit adjustments provided by this paragraph (5)(i)(B) shall be provided to all 8 retirees entitled to receive a benefit adjustment as of June 30, 2012 under the law then in effect, 9 and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary 10 of the date of retirement or the date on which the retiree reaches his or her Social Security 11 retirement age, whichever is later. 12 (ii) Except as provided in paragraph (5)(iii), the benefit adjustments under paragraph 13 (5)(i)(B) for any plan year shall be suspended in their entirety unless the Funded Ratio of the 14 Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the 15 State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, 16 exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 17 members for such plan year. 18 In determining whether a funding level under this paragraph (5)(ii) has been achieved, the 19 actuary shall calculate the funding percentage after taking into account the reinstatement of any 20 current or future benefit adjustment provided under this section. 21 (iii) Notwithstanding paragraph (5)(ii), in each fourth plan year commencing after June 30, 22 2012 commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 23 plan years, (i) a benefit adjustment shall be calculated and made in accordance with paragraph 24 (5)(i) (B) above and (ii) effective for members and/or beneficiaries of members who retired on or 25 before June 30, 2015, the dollar amount in paragraph (5)(i)(B)(II) of twenty-five thousand eight 26 hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 27 dollars ($31,026) until the Funded Ratio of the Employees' Retirement System of Rhode Island, the 28 Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by 29 the system's actuary on an aggregate basis, exceeds eighty percent (80%). 30 (iv) Effective for members and or beneficiaries of members who have retired on or before 31 July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 32 days following the enactment of the legislation implementing this provision, and a second one-time 33 stipend of five hundred dollars ($500) in the same month of the following year. These stipends 34 shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 52 1 payment date and shall not be considered cost of living adjustments under the prior provisions of 2 this § 42-28-22. 3 (5)(6) Any member with contributory service on or after July 1, 2012, who has completed 4 at least five (5) years of contributory service but who has not retired in accordance with (j)(1) 5 above, shall be eligible to retire upon the attainment of member's Security retirement age as 6 defined in 36-8-1(19). 7 (6)(7) In no event shall a member's retirement allowance be less than the member's 8 retirement allowance calculated as of June 30, 2012 based on the member's years of total service 9 and whole salary as of June 30, 2012. 10 (k) In calculating the retirement benefit for any member, the term base salary as used in 11 subdivision (b)(3) or average compensation as used in paragraph (j) shall not be affected by a 12 deferral of salary plan or a reduced salary plan implemented to avoid shutdowns or layoffs or to 13 effect cost savings. Basic salary shall remain for retirement calculation that which it would have 14 been but for the salary deferral or salary reduction due to a plan implemented to avoid shutdowns 15 or layoffs or to effect cost savings. 16 17 SECTION 23. Section 8-3-15 of the General Laws in Chapter 8-3 entitled “Justices of Supreme, Superior, and Family Courts” is hereby amended to read as follows: 18 § 8-3-15 Cost of living allowance. – (a) All justices of the supreme court, superior court, 19 family court, or district court, or their surviving spouses or domestic partners, who retire after 20 January 1, 1970 and who receive a retirement allowance pursuant to the provisions of this title 21 shall, on the first day of January next following the third anniversary date of retirement, receive a 22 cost-of-living retirement adjustment in addition to his or her retirement allowance in an amount 23 equal to three percent (3%) of the original retirement allowance. In each succeeding year thereafter 24 during the month of January, the retirement allowance shall be increased an additional three 25 percent (3%) of the original allowance, not compounded, to be continued during the lifetime of the 26 justice or his or her surviving spouse or domestic partner. For the purpose of such computation, 27 credit shall be given for a full calendar year regardless of the effective date of the retirement 28 allowance. 29 30 (b) Any justice who retired prior to January 31, 1977 shall be deemed for the purpose of this section to have retired on January 1, 1977. 31 (c) For justices not eligible to retire as of September 30, 2009 and not eligible upon passage 32 of this article, and for their beneficiaries, the cost of living adjustment described in subsection (3) 33 above shall only apply to the first thirty-five thousand dollars ($35,000) of retirement allowance, 34 indexed annually, and shall commence upon the third (3rd) anniversary of the date of retirement or 53 1 when the retiree reaches age sixty-five (65), whichever is later. The thirty- five thousand dollar 2 ($35,000) limit shall increase annually by the percentage increase in the Consumer Price Index for 3 all Urban Consumer (CPI-U) as published by the United States Department of Labor Statistics 4 determined as of September 30 of the prior calendar year or three percent (3%), whichever is less. 5 The first thirty-five thousand dollars ($35,000), as indexed, of retirement allowance shall be 6 multiplied by the percentage of increase in the Consumer Price Index for all Urban Consumers 7 (CPI-U) as published by the United States Department of Labor Statistics determined as of 8 September 30 of the prior calendar year or three percent (3%), whichever is less, on the month 9 following the anniversary date of each succeeding year. For justices eligible to retire as of 10 September 30, 2009 or eligible upon passage of this article, and for their beneficiaries, the 11 provisions of this subsection (c) shall not apply. 12 (d) This subsection (d) shall be effective for the period July 1, 2012 through June 30, 2015. 13 (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (d)(2) 14 below, for all present and former justices, active and retired justices, and beneficiaries receiving 15 any retirement, disability or death allowance or benefit of any kind, whether provided for or on 16 behalf of justices engaged on or prior to December 31, 1989 as a non-contributory justice or 17 engaged after December 31, 1989 as a contributory justice, the annual benefit adjustment provided 18 in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) is equal to 19 the percentage determined by subtracting five and one-half percent (5.5%) (the "subtrahend") from 20 the Five-Year Average Investment Return of the retirement system determined as of the last day of 21 the plan year preceding the calendar year in which the adjustment is granted, said percentage not to 22 exceed four percent (4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of 23 the justice's retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement 24 allowance, such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same 25 percentage as determined under (d)(1)(A) above. The "Five-Year Average Investment Return" shall 26 mean the average of the investment return of the most recent five (5) plan years as determined by 27 the retirement board. Subject to paragraph (d)(2) below, the benefit adjustment provided by this 28 paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date on 29 which the retiree reaches his or her Social Security retirement age, whichever is later. In the event 30 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 31 downward, the subtrahend shall be adjusted either upward or downward in the same amount. 32 (2) Except as provided in paragraph (d)(3), the benefit adjustments under this section for 33 any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the Employees' 34 Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 54 1 Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty 2 percent (80%) in which event the benefit adjustment will be reinstated for all justices for such plan 3 year. 4 In determining whether a funding level under this paragraph (d)(2) has been achieved, the 5 actuary shall calculate the funding percentage after taking into account the reinstatement of any 6 current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall mean 7 the ratio of the actuarial value of assets to the actuarial accrued liability. 8 (3) Notwithstanding paragraph (d)(2), in each fifth plan year commencing after June 30, 9 2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 10 (5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph 11 (d)(1) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, 12 the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated 13 by the system's actuary on an aggregate basis, exceeds eighty percent (80%) 14 (4) Notwithstanding any other provision of this chapter, the provisions of this paragraph (d) 15 of § 8-3-15 shall become effective July 1, 2012 and shall apply to any benefit adjustment not 16 granted on or prior to June 30, 2012. 17 (e) This subsection (e) shall become effective July 1, 2015. 18 (1)(A) As soon as administratively reasonable following the enactment into law of this 19 paragraph (e)(1)(A), a one-time benefit adjustment shall be provided to justices and/or 20 beneficiaries of justices who retired on or before June 30, 2012, in the amount of 2% of the lesser 21 of either the justice’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 22 the justice’s retirement allowance. 23 regard to the retiree’s age or number of years since retirement. This one-time benefit adjustment shall be provided without 24 (B) Notwithstanding the prior paragraphs of this section, for all present and former justices, 25 active and retired justices, and beneficiaries receiving any retirement, disability or death allowance 26 or benefit of any kind, whether provided for or on behalf of justices engaged on or prior to 27 December 31, 1989 as a non-contributory justice or engaged after December 31, 1989 as a 28 contributory justice, the annual benefit adjustment provided in any calendar year under this section 29 for adjustments on and after January 1, 2016, and subject to paragraph (e)(2) below, shall be equal 30 to (I) multiplied by (II): 31 (I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 32 (i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 33 (the "subtrahend") from the Five-Year Average Investment Return of the retirement system 34 determined as of the last day of the plan year preceding the calendar year in which the adjustment 55 1 is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 2 (0%). 3 returns of the most recent five (5) plan years as determined by the retirement board. In the event 4 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 5 downward, the subtrahend shall be adjusted either upward or downward in the same amount. The "Five-Year Average Investment Return" shall mean the average of the investment 6 (ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 7 Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 8 Statistics determined as of September 30 of the prior calendar year. 9 10 In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent. 11 (II) is equal to the lesser of either the justice's retirement allowance or the first twenty-five 12 thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount to be 13 indexed annually in the same percentage as determined under (e)(1)(B)(I) above. 14 The benefit adjustments provided by this paragraph (e)(1)(B) shall be provided to all 15 retirees entitled to receive a benefit adjustment as of June 30, 2012 under the law then in effect, 16 and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary 17 of the date of retirement or the date on which the retiree reaches his or her Social Security 18 retirement age, whichever is later. 19 (2) Except as provided in paragraph (e)(3), the benefit adjustments under paragraph 20 (e)(1)(B) for any plan year shall be suspended in their entirety unless the Funded Ratio of the 21 Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the 22 State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, 23 exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 24 justices for such plan year. 25 In determining whether a funding level under this paragraph (e)(2) has been achieved, the 26 actuary shall calculate the funding percentage after taking into account the reinstatement of any 27 current or future benefit adjustment provided under this section. 28 (3) Notwithstanding paragraph (e)(2), in each fourth plan year commencing after June 30, 29 2012 commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 30 plan years,(i) a benefit adjustment shall be calculated and made in accordance with paragraph 31 (e)(1) (B) above and (ii) effective for members and/or beneficiaries of members who retired on or 32 before June 30, 2015, the dollar amount in paragraph (e)(1)(B)(II) of twenty-five thousand eight 33 hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 34 dollars ($31,026) until the Funded Ratio of the Employees' Retirement System of Rhode Island, the 56 1 Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by 2 the system's actuary on an aggregate basis, exceeds eighty percent (80%). 3 (A) Effective for members and or beneficiaries of members who have retired on or before 4 July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 5 days following the enactment of the legislation implementing this provision, and a second one-time 6 stipend of five hundred dollars ($500) in the same month of the following year. These stipends 7 shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 8 payment date and shall not be considered cost of living adjustments under the prior provisions of 9 this Section 8-3-15. 10 11 SECTION 24. Section 8-8.2-12 of the General Laws in Chapter 8-8.2 entitled “Traffic Tribunal” is hereby amended to read as follows: 12 § 8-8.2-12 Additional benefits payable to retired judges and their surviving spouses or 13 domestic partners. – (a) All judges of the administrative adjudication court and all judges of the 14 administrative adjudication court who have been reassigned to the traffic tribunal, or their 15 surviving spouses or domestic partners, who retire after January 1, 1970 and who receive a 16 retirement allowance pursuant to the provisions of this title, shall, on the first day of January, next 17 following the third anniversary of the retirement, receive a cost of living retirement adjustment in 18 addition to his or her retirement allowance in an amount equal to three percent (3%) of the original 19 retirement allowance. In each succeeding year thereafter during the month of January, the 20 retirement allowance shall be increased an additional three percent (3%) of the original allowance, 21 compounded annually from the year cost of living adjustment was first payable to be continued 22 during the lifetime of the judge or his or her surviving spouse or domestic partner. For the purpose 23 of such computation, credit shall be given for a full calendar year regardless of the effective date of 24 the retirement allowance. 25 26 (b) Any judge who retired prior to January 31, 1980, shall be deemed for the purpose of this section to have retired on January 1, 1980. 27 (c) For judges not eligible to retire as of September 30, 2009 and not eligible upon passage 28 of this article, and for their beneficiaries, the cost of living adjustment described in subsection (a) 29 above shall only apply to the first thirty-five thousand dollars ($35,000) of retirement allowance, 30 indexed annually, and shall commence upon the third (3rd) anniversary of the date of retirement or 31 when the retiree reaches age sixty-five (65), whichever is later. The thirty-five thousand dollar 32 ($35,000) limit shall increase annually by the percentage increase in the Consumer Price Index for 33 all Urban Consumer (CPI-U) as published by the United States Department of Labor Statistics 34 determined as of September 30 of the prior calendar year or three percent (3%), whichever is less. 57 1 The first thirty-five thousand dollars ($35,000), as indexed, of retirement allowance shall be 2 multiplied by the percentage of increase in the Consumer Price Index for all Urban Consumers 3 (CPI-U) as published by the United States Department of Labor Statistics determined as of 4 September 30 of the prior calendar year or three percent (3%), whichever is less on the month 5 following the anniversary date of each succeeding year. For judges eligible to retire as of 6 September 30, 2009 or eligible upon passage of this article, and for their beneficiaries, the 7 provisions of this subsection (c) shall not apply. 8 9 (d) This subsection (d) shall be effective for the period July 1, 2012 through June 30, 2015. 10 (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (d)(2) 11 below, for all present and former justices, active and retired justices, and beneficiaries receiving 12 any retirement, disability or death allowance or benefit of any kind, whether provided for or on 13 behalf of justices engaged on or prior to December 31, 1989 as a non-contributory justice or 14 engaged after December 31, 1989 as a contributory justice, the annual benefit adjustment provided 15 in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) is equal to 16 the percentage determined by subtracting five and one-half percent (5.5%) (the "subtrahend") from 17 the Five-Year Average Investment Return of the retirement system determined as of the last day of 18 the plan year preceding the calendar year in which the adjustment is granted, said percentage not to 19 exceed four percent (4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of 20 the justice's retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement 21 allowance, such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same 22 percentage as determined under (d)(1)(A) above. The "Five-Year Average Investment Return" shall 23 mean the average of the investment return of the most recent five (5) plan years as determined by 24 the retirement board. Subject to paragraph (d)(2) below, the benefit adjustment provided by this 25 paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date on 26 which the retiree reaches his or her Social Security retirement age, whichever is later. In the event 27 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 28 downward, the subtrahend shall be adjusted either upward or downward in the same amount. 29 (2) Except as provided in paragraph (d)(3), the benefit adjustments under this section for 30 any plan year shall be suspended in their entirety unless the GASB Funded Ratio of the Employees' 31 Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 32 Retirements Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds 33 eighty percent (80%) in which even the benefit adjustment will be reinstated for all justices for 34 such plan year. 58 1 In determining whether a funding level under this paragraph (d)(2) has been achieved, the 2 actuary shall calculate the funding percentage after taking into account the reinstatement of any 3 current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall mean 4 the ratio of the actuarial value of assets to the actuarial accrued liability. 5 (3) Notwithstanding paragraph (d)(2), in each fifth plan year commencing after June 30, 6 2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 7 (5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph 8 (d)(1) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, 9 the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated 10 by the system's actuary on an aggregate basis, exceeds eighty percent (80%). 11 (4) Notwithstanding any other provision of this chapter, the provisions of this paragraph (d) 12 of § 8-8.2-12 shall become effective July 1, 2012 and shall apply to any benefit adjustment not 13 granted on or prior to June 30, 2012. 14 (e) This subsection (e) shall become effective July 1, 2015. 15 (1)(A) As soon as administratively reasonable following the enactment into law of this 16 paragraph (e)(1)(A), a one-time benefit adjustment shall be provided to justices and/or 17 beneficiaries of justices who retired on or before June 30, 2012, in the amount of 2% of the lesser 18 of either the justice’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 19 the justice’s retirement allowance. 20 regard to the retiree’s age or number of years since retirement. This one-time benefit adjustment shall be provided without 21 (B) Notwithstanding the prior paragraphs of this section, for all present and former justices, 22 active and retired justices, and beneficiaries receiving any retirement, disability or death allowance 23 or benefit of any kind, whether provided for or on behalf of justices engaged on or prior to 24 December 31, 1989 as a non-contributory justice or engaged after December 31, 1989 as a 25 contributory justice, the annual benefit adjustment provided in any calendar year under this section 26 for adjustments on and after January 1, 2016, and subject to paragraph (e)(2) below, shall be equal 27 to (I) multiplied by (II): 28 (I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 29 (i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 30 (the "subtrahend") from the Five-Year Average Investment Return of the retirement system 31 determined as of the last day of the plan year preceding the calendar year in which the adjustment 32 is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 33 (0%). 34 returns of the most recent five (5) plan years as determined by the retirement board. In the event The "Five-Year Average Investment Return" shall mean the average of the investment 59 1 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 2 downward, the subtrahend shall be adjusted either upward or downward in the same amount. 3 (ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 4 Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 5 Statistics determined as of September 30 of the prior calendar year. 6 7 In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent. 8 (II) is equal to the lesser of either the justice's retirement allowance or the first twenty-five 9 thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount to be 10 indexed annually in the same percentage as determined under (e)(1)(B)(I) above. 11 The benefit adjustments provided by this paragraph (e)(1)(B) shall be provided to all 12 retirees entitled to receive a benefit adjustment as of June 30, 2012 under the law then in effect, 13 and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary 14 of the date of retirement or the date on which the retiree reaches his or her Social Security 15 retirement age, whichever is later. 16 (2) Except as provided in paragraph (e)(3), the benefit adjustments under paragraph 17 (e)(1)(B) for any plan year shall be suspended in their entirety unless the Funded Ratio of the 18 Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the 19 State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, 20 exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 21 justices for such plan year. 22 In determining whether a funding level under this paragraph (e)(2) has been achieved, the 23 actuary shall calculate the funding percentage after taking into account the reinstatement of any 24 current or future benefit adjustment provided under this section. 25 (3) Notwithstanding paragraph (e)(2), effective for members and/or beneficiaries of 26 members who retired on or before June 30, 2015, in each fourth plan year commencing after June 27 30, 2012 commencing with the plan year ending June 30, 2016, and subsequently at intervals of 28 four plan years,(i) a benefit adjustment shall be calculated and made in accordance with paragraph 29 (e)(1) (B) above and (ii) the dollar amount in paragraph (e)(1)(B)(II) of twenty-five thousand eight 30 hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 31 dollars ($31,026) until the Funded Ratio of the Employees' Retirement System of Rhode Island, the 32 Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by 33 the system's actuary on an aggregate basis, exceeds eighty percent (80%). 34 (A) Effective for members and or beneficiaries of members who have retired on or before 60 1 July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 2 days following the enactment of the legislation implementing this provision, and a second one-time 3 stipend of five hundred dollars ($500) in the same month of the following year. These stipends 4 shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 5 payment date and shall not be considered cost of living adjustments under the prior provisions of 6 this Section 8-8.2-12. 7 8 SECTION 25. Section 28-30-18 of the General Laws in Chapter 28-30 entitled “Workers’ Compensation Court” is hereby amended to read as follows: 9 § 28-30-18 Additional benefits payable to retired judges and their surviving spouses or 10 domestic partners. – (a) All judges of the workers' compensation court, or their surviving spouses 11 or domestic partners, who retire after January 1, 1970 and who receive a retirement allowance 12 pursuant to the provisions of this title, shall, on the first day of January next following the third 13 anniversary date of their retirement, receive a cost of living retirement adjustment in addition to his 14 or her retirement allowance in an amount equal to three percent (3%) of the original retirement 15 allowance. In each succeeding subsequent year during the month of January the retirement 16 allowance shall be increased an additional three percent (3%) of the original allowance, 17 compounded annually from the year the cost of living adjustment was first payable to be continued 18 during the lifetime of that judge or his or her surviving spouse or domestic partner. For the purpose 19 of that computation, credit shall be given for a full calendar year regardless of the effective date of 20 the retirement allowance. 21 22 (b) Any judge who retired prior to January 31, 1980, shall be deemed for the purpose of this section to have retired on January 1, 1980. 23 (c) For judges not eligible to retire as of September 30, 2009 and not eligible upon passage 24 of this article, and for their beneficiaries, the cost of living adjustment described in subsection (a) 25 above shall only apply to the first thirty-five thousand dollars ($35,000) of retirement allowance, 26 indexed annually, and shall commence upon the third (3rd) anniversary of the date of retirement or 27 when the retiree reaches age sixty-five (65), whichever is later. The thirty-five thousand dollar 28 ($35,000) limit shall increase annually by the percentage increase in the Consumer Price Index for 29 all Urban Consumer (CPI-U) as published by the United States Department of Labor Statistics 30 determined as of September 30 of the prior calendar year or three percent (3%), whichever is less. 31 The first thirty-five thousand dollars ($35,000), as indexed, of retirement allowance shall be 32 multiplied by the percentage of increase in the Consumer Price Index for all Urban Consumers 33 (CPI-U) as published by the United States Department of Labor Statistics determined as of 34 September 30 of the prior calendar year or three percent (3%), whichever is less on the month 61 1 following the anniversary date of each succeeding year. For judges eligible to retire as of 2 September 30, 2009 or eligible upon passage of this article, and for their beneficiaries, the 3 provisions of this subsection (c) shall not apply. 4 (d) This subsection (d) shall be effective for the period July 1, 2012 through June 30, 2015. 5 (1) Notwithstanding the prior paragraphs of this section, and subject to paragraph (d)(2) 6 below, for all present and former justices, active and retired justices, and beneficiaries receiving 7 any retirement, disability or death allowance or benefit of any kind, whether provided for or on 8 behalf of justices engaged on or prior to December 31, 1989 as a non-contributory justice or 9 engaged after December 31, 1989 as a contributory justice, the annual benefit adjustment provided 10 in any calendar year under this section shall be equal to (A) multiplied by (B) where (A) is equal to 11 the percentage determined by subtracting five and one-half percent (5.5%) (the "subtrahend") from 12 the Five-Year Average Investment Return of the retirement system determined as of the last day of 13 the plan year preceding the calendar year in which the adjustment is granted, said percentage not to 14 exceed four percent (4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of 15 the justice's retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement 16 allowance, such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same 17 percentage as determined under (d)(1)(A) above. The "Five-Year Average Investment Return" shall 18 mean the average of the investment return of the most recent five (5) plan years as determined by 19 the retirement board. Subject to paragraph (d)(2) below, the benefit adjustment provided by this 20 paragraph shall commence upon the third (3rd) anniversary of the date of retirement or the date on 21 which the retiree reaches his or her Social Security retirement age, whichever is later. In the event 22 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 23 downward, the subtrahend shall be adjusted either upward or downward in the same amount. 24 (2) Except as provided in paragraph (d)(3), the benefit adjustments under this section for 25 any plan year shall be suspended in their entirely unless the GASB Funded Ratio of the Employees' 26 Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the State Police 27 Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, exceeds eighty 28 percent (80%) in which event the benefit adjustment will be reinstated for all justices for such plan 29 year. 30 In determining whether a funding level under this paragraph (d)(2) has been achieved, the 31 actuary shall calculate the funding percentage after taking into account the reinstatement of any 32 current or future benefit adjustment provided under this section. "GASB Funded Ratio" shall mean 33 the ratio of the actuarial value of assets to the actuarial accrued liability. 34 (3) Notwithstanding paragraph (d)(2), in each fifth plan year commencing after June 30, 62 1 2012 commencing with the plan year ending June 30, 2017, and subsequently at intervals of five 2 (5) plan years, a benefit adjustment shall be calculated and made in accordance with paragraph 3 (d)(1) above until the GASB Funded Ratio of the Employees' Retirement System of Rhode Island, 4 the Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated 5 by the system's actuary on an aggregate basis, exceeds eighty percent (80%). 6 (4) Notwithstanding any other provision of this chapter, the provisions of this paragraph (d) 7 of § 28-30-18 shall become effective July 1, 2012 and shall apply to any benefit adjustment not 8 granted on or prior to June 30, 2012. 9 (e) This subsection (e) shall become effective July 1, 2015. 10 (1)(A) As soon as administratively reasonable following the enactment into law of this 11 paragraph (e)(1)(A), a one-time benefit adjustment shall be provided to justices and/or 12 beneficiaries of justices who retired on or before June 30, 2012, in the amount of 2% of the lesser 13 of either the justice’s retirement allowance or the first twenty-five thousand dollars ($25,000) of 14 the justice’s retirement allowance. 15 regard to the retiree’s age or number of years since retirement. This one-time benefit adjustment shall be provided without 16 (B) Notwithstanding the prior paragraphs of this section, for all present and former justices, 17 active and retired justices, and beneficiaries receiving any retirement, disability or death allowance 18 or benefit of any kind, whether provided for or on behalf of justices engaged on or prior to 19 December 31, 1989 as a non-contributory justice or engaged after December 31, 1989 as a 20 contributory justice, the annual benefit adjustment provided in any calendar year under this section 21 for adjustments on and after January 1, 2016, and subject to paragraph (e)(2) below, shall be equal 22 to (I) multiplied by (II): 23 (I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where: 24 (i) is equal to the percentage determined by subtracting five and one-half percent (5.5%) 25 (the "subtrahend") from the Five-Year Average Investment Return of the retirement system 26 determined as of the last day of the plan year preceding the calendar year in which the adjustment 27 is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent 28 (0%). 29 returns of the most recent five (5) plan years as determined by the retirement board. In the event 30 the retirement board adjusts the actuarially assumed rate of return for the system, either upward or 31 downward, the subtrahend shall be adjusted either upward or downward in the same amount. The "Five-Year Average Investment Return" shall mean the average of the investment 32 (ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer 33 Price Index for all Urban Consumers (CPI-U) as published by the U.S. Department of Labor 34 Statistics determined as of September 30 of the prior calendar year. 63 1 2 In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent. 3 (II) is equal to the lesser of either the justice's retirement allowance or the first twenty-five 4 thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount to be 5 indexed annually in the same percentage as determined under (e)(1)(B)(I) above. 6 The benefit adjustments provided by this paragraph (e)(1)(B) shall be provided to all 7 retirees entitled to receive a benefit adjustment as of June 30, 2012 under the law then in effect, 8 and for all other retirees the benefit adjustments shall commence upon the third (3rd) anniversary 9 of the date of retirement or the date on which the retiree reaches his or her Social Security 10 retirement age, whichever is later. 11 (2) Except as provided in paragraph (e)(3), the benefit adjustments under paragraph 12 (e)(1)(B) for any plan year shall be suspended in their entirety unless the Funded Ratio of the 13 Employees' Retirement System of Rhode Island, the Judicial Retirement Benefits Trust and the 14 State Police Retirement Benefits Trust, calculated by the system's actuary on an aggregate basis, 15 exceeds eighty percent (80%) in which event the benefit adjustment will be reinstated for all 16 justices for such plan year. 17 In determining whether a funding level under this paragraph (e)(2) has been achieved, the 18 actuary shall calculate the funding percentage after taking into account the reinstatement of any 19 current or future benefit adjustment provided under this section. 20 (3) Notwithstanding paragraph (e)(2), in each fourth plan year commencing after June 30, 21 2012 commencing with the plan year ending June 30, 2016, and subsequently at intervals of four 22 plan years,(i) a benefit adjustment shall be calculated and made in accordance with paragraph 23 (e)(1) (B) above and (ii) effective for members and/or beneficiaries of members who retired on or 24 before June 30, 2015, the dollar amount in paragraph (e)(1)(B)(II) of twenty-five thousand eight 25 hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six 26 dollars ($31,026) until the Funded Ratio of the Employees' Retirement System of Rhode Island, the 27 Judicial Retirement Benefits Trust and the State Police Retirement Benefits Trust, calculated by 28 the system's actuary on an aggregate basis, exceeds eighty percent (80%). 29 (4) Effective for members and or beneficiaries of members who have retired on or before 30 July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60) 31 days following the enactment of the legislation implementing this provision, and a second one-time 32 stipend of five hundred dollars ($500) in the same month of the following year. These stipends 33 shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable 34 payment date and shall not be considered cost of living adjustments under the prior provisions of 64 1 2 this Section 8-8.2-12. SECTION 26. Section 45-21.2-5 of the General Laws in Chapter 45-21.2 entitled 3 “Optional Retirement for Members of Police Force and Fire Fighters” is hereby amended to read as 4 follows: 5 § 45-21.2-5 Retirement on service allowance. – (a) Retirement of a member on a service 6 retirement allowance for members eligible to retire on or before June 30, 2012 shall be made, 7 subject to paragraph (a)(11) below, by the retirement board as follows: 8 (1) Any member who has attained or attains age seventy (70) shall be retired as stated in § 9 45-21-16 subject to the discretions contained in that section; provided, that any member who is a 10 member of the Woonsocket fire department who has attained or attains an age of sixty-five (65) 11 years shall be retired. Retirement occurs on the first day of the next succeeding calendar month in 12 which the member has attained the age of sixty-five (65) years. 13 (2) Any member may retire pursuant to this subdivision upon written application to the 14 board stating at what time the member desires to retire; provided, that the member at the specified 15 time for retirement has attained an age of fifty-five (55) years and has completed at least ten (10) 16 years of total service, and notwithstanding that the member may have separated from service. 17 (3) Any member may retire pursuant to this subdivision upon written application to the 18 board stating at what time the member desires to retire; provided, that the member at the specified 19 time for retirement has completed at least twenty-five (25) years of total service, and 20 notwithstanding that the member may have separated from service. 21 (4) Any member may retire pursuant to this subdivision upon written application to the 22 board stating at what time the member desires to retire; provided, that the member at the specified 23 time for retirement has attained an age of fifty (50) years and has completed at least twenty (20) 24 years of total service, notwithstanding that the member may have separated from service; provided, 25 that the service retirement allowance, as determined according to the formula provided in § 45- 26 21.2-6, is reduced one-half of one percent ( 1/2%) for each month that the age of the member is 27 less than fifty-five (55) years. 28 (5) Any member of the South Kingstown police department may retire pursuant to this 29 subdivision upon written application to the board stating at what time the member desires to retire; 30 provided, that the member at the specified time for retirement has earned a service retirement 31 allowance of fifty percent (50%) of final compensation pursuant to § 45-21.2-6.1. 32 (6) Any member of the Johnston police department may retire pursuant to this subdivision 33 upon written application to the board stating at what time the member desires to retire; provided, 34 that the member at the specified time for retirement has earned a service retirement allowance of 65 1 fifty percent (50%) of final compensation pursuant to § 45-21.2-6.2. 2 (7) Any member of the Cranston fire department hired after July 1, 1995, or any member of 3 the Cranston fire department with five (5) years or less of service effective July 1, 1995, may retire 4 pursuant to this subdivision upon written application to the board stating at what time the member 5 desires to retire; provided, that the member at the specified time for retirement has earned a service 6 retirement allowance of fifty percent (50%) of final compensation for at least twenty (20) years 7 service; final compensation for Cranston fire department members is based on the compensation 8 components of weekly salary, longevity and holidays with longevity of the members highest year 9 of earnings and members shall receive a three percent (3%) escalation of their pension payment 10 compounded each year on January 1st following the year of retirement and continuing on an annual 11 basis on that date; further, any illness or injury not covered in title 45 of the general laws relating 12 to the presumption of disability is governed by the collective bargaining agreement between the 13 City of Cranston and members of the Cranston fire department. 14 (8) Any member of the Cranston police department hired after July 1, 1995, or any member 15 of the Cranston police department with five (5) years or less of service effective July 1, 1995, may 16 retire pursuant to this subdivision upon written application to the board stating at what time the 17 member desires to retire; provided, that the member at the specified time for retirement has earned 18 a service retirement allowance of fifty percent (50%) of final compensation for at least twenty (20) 19 years service; final compensation for Cranston police department members is based on the 20 compensation components of weekly salary, longevity and holidays with longevity of the members 21 highest year of earnings and members shall receive a three percent (3%) escalation of their pension 22 payment compounded each year on January 1st following the year of retirement and continuing on 23 an annual basis on that date; further, any illness or injury not covered in title 45 of the general laws 24 relating to the presumption of disability is governed by the collective bargaining agreement 25 between the City of Cranston and members of the Cranston police department. 26 (9) Any member of the Hopkinton police department may retire pursuant to this subdivision 27 upon written application to the board stating at what time the member desires to retire; provided, 28 that the member at the specified time for retirement has earned a service retirement allowance of 29 fifty percent (50%) of final compensation for at least twenty (20) years service; final compensation 30 for Hopkinton police department members is based on the compensation components of weekly 31 salary, longevity and holidays with longevity of the members highest year of earnings and 32 members shall receive a three percent (3%) escalation of their pension payment compounded each 33 year on January 1st following the year of retirement and continuing on an annual basis on that date. 34 (10) Any member of the Richmond police department may retire pursuant to this 66 1 subdivision upon written application to the board stating at what time the member desires to retire; 2 provided, that the member at the specified time for retirement has earned a service retirement 3 allowance of fifty percent (50%) of final compensation for at least twenty-two (22) years' service 4 pursuant to § 45-21.2-6.3. 5 (11) Notwithstanding any provision in this section to the contrary, for any service on or 6 after July 1, 2012, final compensation shall be defined in accordance with § 45-21.2-2, and no 7 benefit adjustments shall be provided except as set forth in subsection 45-21-52(c). 8 (12) Notwithstanding any provisions of this section to the contrary, with respect to police 9 officers employed by the town of Johnston, only those police officers hired on or after July 1, 2010 10 shall be eligible to be members of the Municipal Employees' Retirement System of the state of 11 Rhode Island in accordance with this chapter. 12 13 (b) Retirement of a member on a service retirement allowance eligible to retire on and after July 1, 2012 shall be made by the retirement board as follows: 14 15 (1) Any member may retire pursuant to this subdivision upon written application to the board stating at what time the member desires to retire; provided, that 16 (A) the member at the specified time for retirement attained the age of at least fifty-five 17 (55) years and has completed at least twenty-five (25) years of total service, and notwithstanding 18 that the member may have separated from service, or 19 (B) effective July 1, 2015, for members of fire departments exclusive of Cranston fire, the 20 member makes contributions to the plan effective July 1, 2015 in accordance with section 45-21.2- 21 14, and (i) the member at the specified time for retirement attained the age of at least fifty (50) 22 years and has completed at least twenty-five (25) years of total service, or (ii) the member has 23 completed at least twenty-seven (27) years of total service regardless of the member’s attained age, 24 and notwithstanding that the member may have separated from service. 25 (2) Any member with contributory service on or after July 1, 2012, who has completed at 26 least five (5) years of contributory service but who has not completed twenty-five (25) years of 27 service, shall be eligible to retire upon the attainment of the member's Social Security retirement 28 age. 29 (3) If a member had ten (10) or more years of contributory service and attained age forty- 30 five (45) prior to July 1, 2012 and would have been eligible to retire at or prior to age fifty-two 31 (52) in accordance with the rules in effect prior to July 1, 2012, the member may retire upon 32 attainment of age fifty-two (52). 33 (4) Effective July 1, 2015, A a member who has completed twenty (20) or more years of 34 total service who has attained an age within five (5) years of the eligible retirement age under 67 1 subparagraphs (b)(1) or (b)(2) or (b)(3) above, may elect to retire provided that the retirement 2 allowance shall be reduced actuarially for each month that the age of the member is less than the 3 eligible retirement age under subparagraphs (b)(1) or (b)(2) or (b)(3) above, provided that for 4 members of fire departments exclusive of Cranston fire, actuarial reduction will be made in 5 accordance with the following table: 6 Year Preceding Retirement 7 For Year 1 9% .75% 8 For Year 2 8% .667% 9 For Year 3 7% .583% 10 For Year 4 7% .583% 11 For Year 5 7% .583%. Cumulative Annual Reduction Cumulative Monthly Reduction 12 (5) Notwithstanding any other provisions of this section, a member on June 30, 2012, may 13 elect to retire at his or her eligible retirement date as determined under the rules in effect on June 14 30, 2012 provided that a member making an election under this paragraph shall receive the 15 member's retirement benefit determined and calculated based on the member's service and final 16 compensation as of June 30, 2012. This provision shall be interpreted and administered in a manner 17 to protect a member's accrued benefit on June 30, 2012. 18 SECTION 27. Section 45-21.2-6 of the General Laws in Chapter 45-21.2 entitled 19 “Optional Retirement for Members of Police Force and Fire Fighters” is hereby amended to read as 20 follows: 21 § 45-21.2-6 Service retirement allowance. – (a) Upon retirement from service pursuant to 22 § 45-21.2-5, a member receives a retirement allowance which is a life annuity terminable at the 23 death of the annuitant and shall be an amount equal to two percent (2%) of final compensation 24 multiplied by the years of total service, provided that for members of fire departments, exclusive of 25 Cranston fire, a member who retires upon the attainment of age of fifty-seven (57) years and has 26 completed at least thirty (30) years of total service shall receive a retirement allowance which is a 27 life annuity terminable at the death of the annuitant and shall be an amount equal to the greater of 28 (i) two and one quarter percent (2.25%) of final compensation multiplied by total years of service 29 or (ii) the member’s accrued benefit determined as of June 30, 2012 plus two and one quarter 30 percent (2.25%) of final compensation multiplied by member’s years of service after June 30, 31 2012; provided further that the life annuity under this paragraph (a) shall not but not to exceed 32 seventy-five percent (75%) of final compensation. 33 (b) Upon retirement, the member may elect to receive the actuarial equivalent of his or her 34 retirement allowance in a lesser retirement allowance as determined by actuarial calculation, which 68 1 is payable throughout life with the provision that: 2 (1) Option 1. A reduced retirement allowance payable during the member's life with the 3 provisions that after his or her death it shall continue during the life of and be paid to the person 4 that he or she nominated by written designation duly acknowledged and filed with the retirement 5 board at the time of retirement; or 6 (2) Option 2. A reduced retirement allowance payable during the member's life with the 7 provision that after his or her death an allowance equal to one-half ( 1/2) of his or her reduced 8 allowance shall continue during the life of and be paid to the person that he or she nominated by 9 written designation duly acknowledged and filed with the board at the time of retirement. 10 (c) If prior to July 1, 2012, a member elected an optional form of benefit other than a life 11 annuity in accordance with paragraph (b)(1) or (2) above, the member may elect to change his or 12 her form of benefit to a life annuity by filing an election with the retirement board on or before 13 June 30, 2013 provided that the member's beneficiary is still alive at the time the election is filed. 14 SECTION 28. Section 45-21.2-14 of the General Laws in Chapter 45-21.2 entitled 15 “Optional Retirement for Members of Police Force and Fire Fighters” is hereby amended to read as 16 follows: 17 § 45-21.2-14 Contributions. – (a) Each member shall contribute an amount equal to seven 18 percent (7%) of the salary or compensation earned or accruing to the member provided that 19 effective July 1, 2015 each member of fire departments exclusive of Cranston fire shall contribute 20 an amount equal to nine percent (9%) of the salary or compensation earned or accruing to the 21 member. Special compensation or additional fees shall not be considered as compensation for 22 contribution purposes. 23 24 (b) Deductions are made in accordance with § 45-21-14 and credited in accordance with § 45-21-43. 25 (c) Each municipality shall make contributions to the system to provide the remainder of 26 the obligation for retirement allowances, annuities, and other benefits provided in this section, after 27 applying the accumulated contribution of members, interest income on investments, and other 28 accrued income. The contribution shall be compiled in accordance with §§ 45-21-42 – 45-21-44, 29 except that contributions for the first five (5) years of the system shall likewise be determined by 30 the board. 31 (d) Provided, that members of the South Kingstown police department, beginning July 1, 32 1985 and until June 30, 2012, contribute an amount equal to eight percent (8%) of salary or 33 compensation or additional fees are not considered as compensation for retirement purposes. For 34 service on and after July 1, 2012, a member of the South Kingstown police department shall make 69 1 contributions in accordance with paragraph (a) above. 2 (e) Provided, further, that for service on or prior to June 30, 2012, members of the City of 3 Cranston fire department hired after July 1, 1995, beginning July 1, 1995, contribute an amount 4 equal to ten percent (10%) of their weekly salary; and those members of the City of Cranston fire 5 department with five (5) years or less of service effective July 1, 1995, have the option to either 6 remain in the City of Cranston pension plan to which they belonged prior to the adoption of local 7 ordinance by the Cranston city council as stated in § 45-21.2-22 or contribute to the State of Rhode 8 Island optional twenty (20) year retirement on service allowance an amount equal to ten percent 9 (10%) of their weekly salary commencing July 1, 1995. The City of Cranston may request and the 10 retirement board may authorize additional members of the City of Cranston fire department hired 11 after July 1, 1987, the option to either remain in the City of Cranston pension plan to which they 12 belonged prior to the adoption of local ordinance by the Cranston city council as stated in § 45- 13 21.2-22 or contribute to the State of Rhode Island optional twenty (20) year retirement on service 14 allowance an amount equal to ten percent (10%) of their weekly salary beginning on a date 15 specified by the retirement board. For service on and after July 1, 2012, a member of the City of 16 Cranston fire department shall make contributions in accordance with paragraph (a) above and a 17 member's benefit shall be calculated in accordance with subsection 45-21.2-22(b). 18 (f) Further, provided, that for service on and prior to June 30, 2012, members of the City of 19 Cranston police department hired after July 1, 1995, beginning July 1, 1995, contribute an amount 20 equal to ten percent (10%) of their weekly salary; and those members of the City of Cranston 21 police department with five (5) years or less of service effective July 1, 1995, have the option to 22 either remain in the City of Cranston pension plan to which they belonged prior to the adoption of 23 local ordinance by the Cranston city council as stated in § 45-21.2-22 or contribute to the State of 24 Rhode Island optional twenty (20) year retirement on service allowance an amount equal to ten 25 percent (10%) of their weekly salary commencing July 1, 1995. The City of Cranston may request 26 and the retirement board may authorize additional members of the City of Cranston police 27 department hired after July 1, 1987, the option to either remain in the City of Cranston pension 28 plan to which they belonged prior to the adoption of local ordinance by the Cranston city council 29 as stated in § 45-21.2-22 or contribute to the State of Rhode Island optional twenty (20) year 30 retirement on service allowance an amount equal to ten percent (10%) of their weekly salary 31 beginning on a date specified by the retirement board. For service on and after July 1, 2012, a 32 member of the City of Cranston police department shall make contributions in accordance with 33 paragraph (a) above and a member's benefit shall be calculated in accordance with subsection 45- 34 21.2-22(b). 70 SECTION 29. This act shall take effect upon passage. 71 72 Exhibit STATE OF RHODE ISLAND PROVIDENCE, SC. SUPERIOR COURT RHODE ISLAND PUBLIC EMPLOYEES’ RETIREE COALITION, et al, Plaintiffs, vs. C.A. No. PC 15- GINA RAIMONDO, in her capacity as Governor of the State of Rhode Island, et al, Defendants. [PROPOSED] FINAL JUDGMENT These cases having been heard by the Court, Taft-Carter, J., on May ___, 2015 [Note: insert date of fairness hearing], Judgment shall enter in the above-referenced cases in accordance with the terms and conditions of the Settlement Agreement dated April __, 2015 (attached as Exhibit 1) (“the Settlement Agreement”) and the Legislation passed by the General Assembly on ________, 2015, Public Laws _______, amending R.I. Gen. Laws § ________, enacted into law effective ___________, 2015 (attached as Exhibit 2) (‘the Pension Legislation”). This Judgment is final and shall be binding on all parties and all class members in each of the above-referenced class action cases for settlement purposes. Additionally, all class members are forever and completely barred from ever asserting any claims or causes of action that were alleged or brought or that could have been alleged or brought with respect to the various challenges to the Rhode Island pension statutes made and asserted in each of the abovereferenced matters, C.A. Nos. 10-2859, 12-3166, 12-3167, 12-3168 and 12-3579, as the Court has previously found, determined and ruled that the terms and conditions of the Settlement Agreement, as now implemented and made effective by the Pension Litigation, are fair and reasonable. Nothing in this Judgment shall be construed as a limitation on the General Assembly to enact, amend or repeal laws now or in the future, including, without limitation laws with respect to the Rhode Island pension statutes, consistent with the Constitution and laws of the State of Rhode Island and the United States. In the event the General Assembly ever does so, the foregoing statement shall not be construed as a waiver of any of the parties’ or class members’ rights, claims or defenses under the terms of this Judgment or with respect to any such legislation. Accordingly, and for these reasons, Final Judgment now enters in accordance herewith. ENTER: PER ORDER: _______________________________ _______________________________ Date: ___________________________ 2 709621.v1 Exhibit Gabriel Reader Smith 8; Company 5605 N. Mac?rthur Blvd. 469.524.0000 phone BC Actuaries Suite 469.524.0003 fax Irving, TX 25038-2631 March 13, 2015 Gina. M. Rairnondo Governor 82 Smith Street Providence, RI 02903 Seth Magaziner General Treasurer State House, Room 102 Providence, 11.1. 02903 Re: Actuarial Analysis of the Settlement Proposal As requested, this is our actuarial analysis of the settlement proposal as a result of the Rhode Island Retirement Security Act of 2011 (Act) which makes changes to all plans administered by the Employees? Retirement System of Rhode Island (ERSRI), including: a ERSRI State Employees (including Correctional O?cers, and Nurses) 0 ERSRI Teachers 0 Municipal Employees Retirement System (MERE), including General Employees and Public Safety 9 Judicial Retirement Bene?ts Trust (IRBT) a State Police Retirement Bene?ts Trust This analysis provides information on all of the Plans except for the JRBT and the Analysis on'those Plans will be provided at a later time. Summary of Froposed Changes This proposal includes all of the provisions from the original Settlement Agreement, outlined in our February 10, 2014 letter, with effective dates July 1, 2015 as applicable, in addition to the following: a Two one-time $5 00 stipends payable to all current retirees. One payable the month following enactment of this proposal and the ?nal one payable one year later. a For current retirees, the $25,000 COLA cap will be increased to $3 0,000 (indexed) for any COLA payable based on the every 413? year provision (any COLA suspended based on less than 80% funding ratio). a All current and future State Workers, Teachers, and General MERS active members will be eligible to retire with full bene?ts at the earlier of their current RJRSA date or upon the attainrnent of age 65 with 30 years of service, age 64 with 31 years of service, age 63 with 32 years of service, or age 62 with 33 years of service. Governor Gina. M. Raimondo and Treasurer Seth Magaziner March 13, 201 Page 2 a For MERE current and future members can retire with full bene?ts at the earlier of their current retirement age or at the attainment of age 50 with at least 25 years of service or the attainment of any age and 27 years of service. Members will pay an additional 2.00% member contribution rate beginning July 1, 2015. Analysis The combination of these provisions will increase the combined employer contribution for Fiscal 2017 by $31.6 million. This represents 7.9% of the savings generated from all of the changes from the original RJRSA legislation, and 2% more than the original settlement agreement. The original RTRSA changes include a re-amortization of the funding period from 19 to 25 years that represents approximately 20% of the savings. Thus, just comparing the impact of changes to bene?ts, the $31.6 million is 9.3% of the savings. Data and Assumptions We prepared our analysis as though the bill would be effective July 1 2015 and will impact the ?scal year 2017 contribution rates. We assume the ?scal year 2015 and 2016 employer contribution rates would remain unchanged. To prepare these analyses, we used member and ?nancial data supplied by as of June 30, 201 4. We based the analyses on the actuarial assumptions and methods previously adopted by the Retirement Board. However, in connection with the retirement eligibility analyses, we modi?ed the retirement rates consistent with the proposals. Anyone we would have assumed would retire under the current provisions before the earliest allowable age under the proposal was assumed to retire once eligible. In addition, we assume no members would retire within 1_ year of the 57230 provision and an additional 20% of members would retire immediately upon attaining 57/? 3 0. For future benefit adj ustrnents, we assumed the average adjustment would be 2.2% and be provided without suspension for all MERS units because most of these plans will be 80% funded after the legislation passes. For State Employees, Teachers, State Police, and Judges based on projections, we project the bene?t adjustments will be suspended for approximately 14 years, except for the intermittent adjustment every fourth year. Other General Comments This letter is intended to describe the ?nancial and actuarial effect of the proposed plan changes on ERSRI. Changes in retirement eligibility, for example, could impact the cost of post-retirement medical bene?ts, but we have not analyzed this effect. Our calculations are based upon assumptions regarding ?inne events, which may or may not materialize. Please bear in mind that actual results could deviate significantly from. our projections, depending on actual plan experience. Gabriel Roeder Smith Company Govemor Gina. M. Raimondo and Treasurer Seth Magaziner March 13, 2015 Page 3 We are not attorneys, and nothing in this letter should be construed as providing legal or tax advice. No statement in this letter is intended to be interpreted as a recommendation in favor of the changes or in opposition to them. We certify that the undersigned are members of the American Academy of Actuaries and that we meet the Quali?cation Standards of the American Academy of Actuaries to render the actuarial opinion contained herein. If you have any questions, or require any additional clarifying information, please do not hesitate to contact either one of the undersigned. Respectfaily submitted, WM KM Josep P. Newton, FSA, EA Mark R. Randall, MAM, EA Senior Consultant Executive Vice President cc: Mr. Mark Dingle}? Mr. Andrew Roos Mr. Jefh'ey Padvva Gabriel Roeder Smith 8: Company