The bill amends various sections of the General Laws to enhance retirement benefits for teachers, state employees, and municipal employees. Effective for retirement plan year 2026, the act provides that all teachers and state employees who retired after July 1, 2012, will have their full annual cost of living adjustment (COLA) reinstated. Additionally, municipal employees will receive a one-time cost of living adjustment of two and eighty-nine one hundredths percent (2.89%).

The bill also modifies the criteria for benefit adjustments, lowering the required funded ratio for reinstatement from 80% to 75% effective July 1, 2024. Furthermore, it stipulates that public retirement benefits from the state retirement system will not be subject to the state personal income tax, effective January 1, 2025, allowing taxpayers to subtract their state retirement system benefits from federal gross income for tax years beginning on or after January 1, 2027.

This act aims to provide financial relief to eligible retirees and ensure that retirement benefits are adjusted in line with economic conditions.

Statutes affected:
7391: 16-16-40, 36-10-35, 44-30-12, 45-21-52