The bill amends Section 36-10-35 of the General Laws to revise the cost of living retirement adjustments (COLAs) for state employees and their beneficiaries. It specifies that those receiving retirement allowances before December 31, 1967, will receive a 1.5% annual COLA for each year the retirement has been in effect, with the adjustment added each January. From January 1, 1971, through December 31, 1980, the increase will be 3% per year. For those who retired on or after January 1, 1968, a 3% adjustment will be made on the first January following the third anniversary of retirement and each subsequent year through December 31, 1980. The bill also sets forth adjustments beginning January 1, 1981, for those with at least ten years of service by July 1, 2005, or those receiving a disability retirement allowance, at a rate of 3% compounded annually. For others, adjustments will be the lesser of 3% or the CPI-U increase, compounded annually. For employees not eligible to retire as of September 30, 2009, and their beneficiaries, the COLA will apply only to the first $35,000 of the retirement allowance, indexed annually, and will commence upon the third anniversary of retirement or at age 65, whichever is later.

The bill also outlines new provisions for benefit adjustments based on investment returns and the CPI-U, with a cap on the maximum increase. It includes a one-time benefit adjustment for members who retired on or before June 30, 2012, regardless of age or years since retirement, and stipulates that benefit adjustments are dependent on the retirement system's funded ratio exceeding eighty percent (80%). A new insertion exempts members and beneficiaries who retired prior to July 1, 2012, from certain subsections related to benefit adjustments and provides for a one-time stipend of five hundred dollars to eligible retirees within sixty days of the bill's enactment, with a second stipend the following year. The act aims to restore COLAs to state employees and beneficiaries who retired before July 1, 2012, and will take effect immediately upon passage.

Statutes affected:
546: 36-10-35