The bill amends the General Laws regarding retirement benefits for teachers and state employees in Rhode Island, specifically addressing cost of living adjustments (COLAs). For teachers and beneficiaries who retired before December 31, 1967, a 1.5% per year adjustment is added to the original retirement allowance for each year since January 1, 1970. For those retiring after January 1, 1968, a 3% adjustment is added annually through December 31, 1980. From January 1, 1981, the COLA is 3% compounded annually for those with at least ten years of service before July 1, 2005, or eligible to retire by September 30, 2009. For others, the adjustment is the lesser of 3% or the CPI-U increase, compounded annually, and applies only to the first $35,000 of the retirement allowance, indexed annually. The bill also includes a one-time 2% benefit adjustment for retirees as of June 30, 2012, and outlines a formula for future benefit adjustments based on investment returns and the CPI-U, with a cap of 3.5% and a floor of 0%, contingent on the retirement system's funded ratio exceeding 80%.

Additionally, the bill introduces a new provision effective July 1, 2023, offering a one-time stipend of 3% of the lesser of the retirement allowance or $30,000 to members or beneficiaries, irrespective of age or years since retirement. This stipend, not considered a COLA, will be paid from the state's general fund, subject to appropriation by the general assembly, with the possibility of similar stipends in subsequent fiscal years starting July 1, 2024. The bill also amends Section 36-10-35 to include additional benefits payable to retired employees, with a COLA dating back to December 31, 1967. The bill specifies that benefit adjustments for retirees not eligible by September 30, 2009, will commence on the third anniversary of retirement or at age 65, whichever is later, and outlines a 3% compounded annual increase for legislators and beneficiaries starting January 1, 1982. The bill is set to take effect upon passage.

Statutes affected:
996: 16-16-40, 36-10-35