The bill amends sections of the General Laws related to the "Retirement System Contributions and Benefits" for the State of Rhode Island. It introduces changes to the actuarial cost method used to determine employer contribution rates for the state and participating municipalities. Specifically, it mandates the use of the entry age normal cost method and outlines the re-amortization of the Unfunded Actuarial Accrued Liability (UAAL) over closed periods. Notably, the bill includes new language that, starting with fiscal year 2025, any benefit changes that result in increased actuarially calculated plan costs must be amortized over new five-year closed periods, allocated according to the state/municipal proportion set forth in § 16-16-22.

Additionally, the bill requires that proposed legislation impacting the retirement system must include a "pension impact note" before approval by the General Assembly. This note, prepared by the employees' retirement system of Rhode Island, must actuarially calculate the projected twenty-year cost of the proposed legislation based on approved retirement board assumptions. From fiscal year 2025, any benefit changes from proposed legislation that increase plan costs must also be amortized over new five-year closed periods. The costs of preparing these pension impact notes will be charged as an administrative expense to the retirement system's restricted receipts account. The bill takes effect upon passage and aims to ensure that any benefit enhancements under the retirement systems are responsibly financed over a defined period.