The bill amends the retirement system benefits for state employees and their beneficiaries, with changes effective from January 1, 2024. It adjusts the cost of living retirement allowances, providing a 1.5% increase per year for employees retired before December 31, 1967, and a 3% increase for those retired on or after January 1, 1968, through December 31, 1980. From January 1, 1981, onwards, the bill sets a 3% compounded annual adjustment for employees with at least ten years of service before July 1, 2005, or those eligible to retire by September 30, 2009. Others will receive the lesser of 3% or the CPI-U increase, with the adjustment applying only to the first $35,000 of the retirement allowance, indexed annually. Legislators and their beneficiaries are also included, with a 3% compounded adjustment after three years of receiving a retirement allowance, starting January 1, 1982. The bill excludes certain sections from applying to this adjustment and includes a special provision for the period from July 1, 2012, to June 30, 2015.

Furthermore, the bill introduces a new benefit adjustment of 3.5% on the first $30,000 of a member's retirement allowance, effective January 1, 2025, contingent on a minimum 10% investment return in the prior year. This income will be exempt from state income tax. However, if the funding ratio of the retirement systems exceeds 80%, this new adjustment will be void, and the system will revert to the previous adjustment provisions. The bill includes the insertion of new subsections (j)(1) and (j)(2) to outline these conditions and the tax exemption, as well as the deletion of the phrase "this section" and its replacement with "§ 36-10-35." The act will take effect upon passage.

Statutes affected:
8282: 36-10-35