The bill amends the retirement benefits for teachers and state employees in Rhode Island, specifically addressing cost of living adjustments (COLAs) and introducing new legal language regarding "Additional benefits payable to retired teachers." Key insertions include a structured COLA system based on retirement dates, with a 1.5% annual adjustment for those who retired on or before December 31, 1967, and a 3% adjustment for those who retired after January 1, 1968, starting the January following their third year of retirement. The bill also establishes a one-time benefit adjustment of 2% for retirees who retired on or before June 30, 2012, and outlines a new formula for annual adjustments based on the five-year average investment return and the Consumer Price Index, with caps on the adjustments. Additionally, it sets a limit on COLAs for employees not eligible to retire by September 30, 2009, capping adjustments to the first $35,000 of their retirement allowance.

The bill includes several deletions from current law, particularly regarding previous COLA calculation methods and eligibility criteria for adjustments. It specifies that no retroactive payments will be made and outlines conditions for suspending benefit adjustments based on the funding ratio of the retirement system. Furthermore, it increases the indexed dollar amount for certain retirees from $25,855 to $31,026 until the funded ratio exceeds 80%, which will be adjusted to 75% effective July 1, 2024. The bill also provides for one-time stipends of $500 for retirees who retired on or before July 1, 2015, to be paid within 60 days of enactment and again the following year, aiming to enhance financial support for retirees while ensuring the sustainability of the retirement system.

Statutes affected:
5525: 16-16-40, 36-10-35