The bill amends Section 36-10-35 of the General Laws concerning retirement system contributions and benefits for state employees in Rhode Island. It introduces new cost-of-living adjustments (COLAs) for retirees, specifying a 1.5% annual COLA for those who retired on or before December 31, 1967, with a minimum increase of $200 per year for certain retirees. For those who retired after January 1, 1968, a 3% COLA will be applied starting from the third anniversary of their retirement until December 31, 1980. The bill also establishes different COLA provisions based on retirement dates and years of service, with a cap of $35,000 on the retirement allowance eligible for COLA adjustments for employees not eligible to retire by September 30, 2009.

Additionally, the bill modifies the funding requirements for the retirement systems, lowering the threshold for benefit adjustments from 80% to 75% of the funded ratio. It eliminates a provision for one-time stipends for retirees who retired on or before July 1, 2015, and introduces a one-time benefit adjustment for retirees who retired on or before June 30, 2012, set at 2% of the lesser of their retirement allowance or the first $25,000 of that allowance. The bill also specifies that future benefit adjustments will be calculated based on a formula considering the five-year average investment return and the Consumer Price Index, with adjustments indexed annually and calculated every five years starting from June 30, 2017. Overall, the bill aims to enhance the financial security of state retirees while ensuring the sustainability of the retirement systems.

Statutes affected:
6238: 36-10-35