The bill amends the General Laws regarding retirement benefits for teachers and state employees in Rhode Island. It specifies cost of living adjustments (COLAs) for retirees, with a non-compounded 3% increase annually for those who retired before 1981, and a compounded 3% increase annually from 1981 for those with at least ten years of contributory service by July 1, 2005, or those eligible for disability retirement. For others, the increase is the lesser of 3% or the CPI-U increase, compounded annually. The COLA applies only to the first $35,000 of the retirement allowance for those not eligible to retire by September 30, 2009, and commences on the third anniversary of retirement or at age 65, whichever is later. The bill also includes provisions for benefit adjustments based on investment returns and the CPI-U, with a maximum of 3.5% and a minimum of 0%, and stipulates that full adjustments are reinstated only if the Funded Ratio of the retirement system exceeds 80%.

Additionally, the bill introduces new language providing for a one-time 3% stipend of the lesser of the member’s retirement allowance or $40,000, payable from the state's general fund and subject to appropriation by the general assembly. This stipend is not considered a COLA and may be provided in subsequent fiscal years starting July 1, 2025, subject to annual appropriation. The bill also increases the dollar amount for benefit adjustments to $31,026 until the funded ratio exceeds 80% and offers two one-time stipends of $500 each to members or beneficiaries who retired on or before June 30, 2015. The act is effective upon passage and aims to provide a one-time stipend of 3% to all retired teachers and state employees.

Statutes affected:
7342: 16-16-40, 36-10-35