The bill amends the General Laws regarding retirement benefits for teachers, state employees, and municipal employees, introducing new cost of living adjustment (COLA) provisions and one-time benefit adjustments. For retired teachers, the bill specifies different COLA rates depending on the date of retirement and eligibility criteria, with a 1.5% adjustment for those retired before December 31, 1967, and a 3% adjustment for those retired after January 1, 1968. The bill also includes a one-time 2% benefit adjustment for teachers who retired on or before June 30, 2012, and revises the formula for annual benefit adjustments after January 1, 2016, to be a combination of investment returns and CPI-U increases, capped at 3.5%. Benefit adjustments are reduced to 25% unless the funded ratio of the retirement systems exceeds 80%, and the bill increases the maximum retirement allowance subject to adjustments for certain retirees.

For state employees and legislators, the bill outlines similar COLA provisions, with a 3% adjustment for those who retired before October 1, 2009, or were eligible to retire by September 30, 2009, and a lesser adjustment for others based on CPI-U increases. The bill also provides for a one-time benefit adjustment for members who retired on or before June 30, 2012, and sets a formula for annual benefit adjustments starting January 1, 2016. Additionally, the bill allows local legislative bodies to provide automatic COLA increases for municipal employees, with three different plans offering COLAs ranging from 1.5% to 3%. The bill includes a one-time stipend for retirees on or before July 1, 2015, and takes effect upon passage, affecting retired teachers, state, and municipal employees by replacing the current COLA suspension schedule with a fractional annual COLA of twenty-five percent of the declared COLA for that plan year.

Statutes affected:
5240: 16-16-40, 36-10-35, 45-21-52