The bill amends the General Laws regarding retirement system contributions and benefits, specifically addressing cost of living adjustments (COLAs) for state employees and their beneficiaries. It provides a 1.5% annual COLA for those who retired on or before December 31, 1967, with a minimum of $200 per year for those who retired before January 1, 1958. For retirements between January 1, 1971, and December 31, 1980, the increase is 3% per year. For those who retired after January 1, 1968, the bill sets a 3% COLA starting on the first January after the third anniversary of retirement, with subsequent annual increases through December 31, 1980. From January 1, 1981, the adjustment is 3% compounded annually for those with at least ten years of service by July 1, 2005, or eligible to retire by September 30, 2009; for others, it is the lesser of 3% or the Consumer Price Index increase. The bill also caps the COLA to the first $35,000 of the retirement allowance for certain employees and includes additional provisions for legislators and beneficiaries, along with a new subsection (g) for calculating annual benefit adjustments based on investment returns.

Starting January 1, 2024, the bill introduces a new provision that applies a 3% annual benefit adjustment to the first $50,000 of a member's retirement allowance, contingent on the prior year's investment return being at least 10%. This provision remains until the funding ratio of the employees' retirement system of Rhode Island and other specified trusts exceeds 80%. Once this threshold is met, the benefit adjustment reverts to the provisions in subsection (h) of the current law, and the new subsection (j) is nullified. The act will take effect upon passage.

Statutes affected:
6207: 36-10-35