§ 16-16-40. Additional benefits payable to retired teachers.
(a) All teachers and all beneficiaries of teachers receiving any service retirement or
ordinary or accidental disability retirement allowance pursuant to the provisions
of this chapter and chapter 17 of this title, on or before December 31, 1967, shall
receive a cost of living retirement adjustment equal to one and one-half percent (1.5%)
per year of the original retirement allowance, not compounded, for each year the retirement
allowance has been in effect. For purposes of computation credit shall be given for
a full calendar year regardless of the effective date of the retirement allowance.
This cost of living retirement adjustment shall be added to the amount of the service
retirement allowance as of January 1, 1970, and payment shall begin as of July 1,
1970. An additional cost of living retirement adjustment shall be added to the original
retirement allowance equal to three percent (3%) of the original retirement allowance
on the first day of January, 1971, and each year thereafter through December 31, 1980.
(b) All teachers and beneficiaries of teachers receiving any service retirement or ordinary
disability retirement allowance pursuant to the provisions of this title who retired
on or after January 1, 1968, shall, on the first day of January, next following the
third (3rd) year on retirement, receive a cost of living adjustment, in addition to
their retirement allowance, an amount equal to three percent (3%) of the original
retirement allowance. In each succeeding year thereafter, on the first day of January,
the retirement allowance shall be increased an additional three percent (3%) of the
original retirement allowance, not compounded, to be continued through December 31,
1980.
(c)(1) Beginning on January 1, 1981, for all teachers and beneficiaries of teachers receiving
any service retirement and all teachers and all beneficiaries of teachers who have
completed at least ten (10) years of contributory service on or before July 1, 2005,
pursuant to the provisions of this chapter, and for all teachers and beneficiaries
of teachers who receive a disability retirement allowance pursuant to §§ 16-16-14 — 16-16-17, the cost of living adjustment shall be computed and paid at the rate of three percent
(3%) of the original retirement allowance or the retirement allowance as computed
in accordance with § 16-16-40.1, compounded annually from the year for which the cost of living adjustment was determined
to be payable by the retirement board pursuant to the provisions of subsection (a)
or (b) of this section. Such cost of living adjustments are available to teachers
who retire before October 1, 2009, or are eligible to retire as of September 30, 2009.
(2) The provisions of this subsection shall be deemed to apply prospectively only and
no retroactive payment shall be made.
(3) The retirement allowance of all teachers and all beneficiaries of teachers who have
not completed at least ten (10) years of contributory service on or before July 1,
2005, or were not eligible to retire as of September 30, 2009, shall, on the month
following the third anniversary date of the retirement, and on the month following
the anniversary date of each succeeding year be adjusted and computed by multiplying
the retirement allowance by three percent (3%) or the percentage of increase in the
Consumer Price Index for All Urban Consumers (CPI-U) as published by the United States
Department of Labor Statistics, determined as of September 30 of the prior calendar
year, whichever is less; the cost of living adjustment shall be compounded annually
from the year for which the cost of living adjustment was determined payable by the
retirement board; provided, that no adjustment shall cause any retirement allowance
to be decreased from the retirement allowance provided immediately before such adjustment.
(d) For teachers not eligible to retire in accordance with this chapter as of September
30, 2009, and not eligible upon passage of this article, and for their beneficiaries,
the cost of living adjustment described in subsection (c)(3) of this section shall
only apply to the first thirty-five thousand dollars ($35,000) of retirement allowance,
indexed annually, and shall commence upon the third (3rd) anniversary of the date
of retirement or when the retiree reaches age sixty-five (65), whichever is later.
The thirty-five thousand dollar ($35,000) limit shall increase annually by the percentage
increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published
by the United States Department of Labor Statistics determined as of September 30
of the prior calendar year or three percent (3%), whichever is less. The first thirty-five
thousand dollars ($35,000), as indexed, of retirement allowance shall be multiplied
by the percentage of increase in the Consumer Price Index for All Urban Consumers
(CPI-U) as published by the United States Department of Labor Statistics determined
as of September 30 of the prior calendar year or three percent (3%), whichever is
less, on the month following the anniversary date of each succeeding year. For teachers
eligible to retire as of September 30, 2009, or eligible upon passage of this article,
and for their beneficiaries, the provisions of this subsection (d) shall not apply.
(e) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section.
(f) This subsection (f) shall be effective for the period July 1, 2012, through June 30,
2015.
(1) Notwithstanding the prior paragraphs of this section, and subject to subsection (f)(2)
below, for all present and former teachers, active and retired teachers, and beneficiaries
receiving any retirement, disability or death allowance or benefit of any kind, the
annual benefit adjustment provided in any calendar year under this section shall be
equal to (A) multiplied by (B) where (A) is equal to the percentage determined by
subtracting five and one-half percent (5.5%) (the "subtrahend�) from the Five-Year
Average Investment Return of the retirement system determined as of the last day of
the plan year preceding the calendar year in which the adjustment is granted, said
percentage not to exceed four percent (4%) and not to be less than zero percent (0%),
and (B) is equal to the lesser of the teacher's retirement allowance or the first
twenty-five thousand dollars ($25,000) of retirement allowance, such twenty-five thousand
dollars ($25,000) amount to be indexed annually in the same percentage as determined
under (f)(1)(A) above. The "Five-Year Average Investment Return� shall mean the average
of the investment returns of the most recent five (5) plan years as determined by
the retirement board. Subject to subsection (f)(2) below, the benefit adjustment provided
by this subsection (f)(1) shall commence upon the third (3rd) anniversary of the date
of retirement or the date on which the retiree reaches their Social Security retirement
age, whichever is later. In the event the retirement board adjusts the actuarially
assumed rate of return for the system, either upward or downward, the subtrahend shall
be adjusted either upward or downward in the same amount.
(2) Except as provided in subsection (f)(3), the benefit adjustments under this section
for any plan year shall be suspended in their entirety unless the funded ratio of
the employees' retirement system of Rhode Island, the judicial retirement benefits
trust, and the state police retirement benefits trust, calculated by the system's
actuary on an aggregate basis, exceeds eighty percent (80%) in which event the benefit
adjustment will be reinstated for all teachers for such plan year.
In determining whether a funding level under this subsection (f)(2) has been achieved,
the actuary shall calculate the funding percentage after taking into account the reinstatement
of any current or future benefit adjustment provided under this section.
(3) Notwithstanding subsection (f)(2), in each fifth plan year commencing after June 30,
2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals
of five plan years, a benefit adjustment shall be calculated and made in accordance
with subsection (f)(1) above until the funded ratio of the employees' retirement system
of Rhode Island, the judicial retirement benefits trust, and the state police retirement
benefits trust, calculated by the system's actuary on an aggregate basis, exceeds
eighty percent (80%).
(4) Notwithstanding any other provisions of this chapter, the provisions of this subsection
(f) shall become effective July 1, 2012, and shall apply to any benefit adjustments
not granted on or prior to June 30, 2012.
(g) This subsection (g) shall become effective July 1, 2015.
(1)(A) As soon as administratively reasonable following the enactment into law of this subsection
(g)(1)(A), a one-time benefit adjustment shall be provided to teachers and/or beneficiaries
of teachers who retired on or before June 30, 2012, in the amount of two percent (2%)
of the lesser of either the teacher's retirement allowance or the first twenty-five
thousand dollars ($25,000) of the teacher's retirement allowance. This one-time benefit
adjustment shall be provided without regard to the retiree's age or number of years
since retirement.
(B) Notwithstanding the prior subsections of this section, for all present and former
teachers, active and retired teachers, and beneficiaries receiving any retirement,
disability, or death allowance or benefit of any kind, the annual benefit adjustment
provided in any calendar year under this section for adjustments on and after January
1, 2016, and subject to subsection (g)(2) below, shall be equal to (I) multiplied
by (II):
(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii)
where:
(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%)
(the "subtrahend�) from the five-year average investment return of the retirement
system determined as of the last day of the plan year preceding the calendar year
in which the adjustment is granted, said percentage not to exceed four percent (4%)
and not to be less than zero percent (0%). The "five-year average investment return�
shall mean the average of the investment returns of the most recent five (5) plan
years as determined by the retirement board. In the event the retirement board adjusts
the actuarially assumed rate of return for the system, either upward or downward,
the subtrahend shall be adjusted either upward or downward in the same amount.
(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer
Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of
Labor Statistics determined as of September 30 of the prior calendar year.
In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%)
or be less than (0%) percent.
(II) is equal to the lesser of either the teacher's retirement allowance or the first twenty-five
thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such
amount to be indexed annually in the same percentage as determined under subsection
(g)(1)(B)(I) above.
The benefit adjustments provided by this subsection (g)(1)(B) shall be provided to
all retirees entitled to receive a benefit adjustment as of June 30, 2012, under the
law then in effect, and for all other retirees the benefit adjustments shall commence
upon the third anniversary of the date of retirement or the date on which the retiree
reaches his or her Social Security retirement age, whichever is later.
(2) Except for teachers and/or beneficiaries of teachers who retired on or before June
30, 2012, the benefit adjustments under subsection (g)(1)(B) for any plan year shall
be reduced to twenty-five percent (25%) of the benefit adjustment unless the funded
ratio of the employees' retirement system of Rhode Island, the judicial retirement
benefits trust, and the state police retirement benefits trust, calculated by the
system's actuary on an aggregate basis, exceeds eighty percent (80%) in which event
the benefit adjustment will be reinstated for all teachers for such plan year. Effective
July 1, 2024, the funded ratio of the employees' retirement system of Rhode Island,
the judicial retirement benefits trust, and the state police retirement benefits trust,
calculated by the system's actuary on an aggregate basis, of exceeding eighty percent
(80%) for the benefit adjustment to be reinstated for all teachers for such plan year
shall be replaced with seventy-five percent (75%).
In determining whether a funding level under this subsection (g)(2) has been achieved,
the actuary shall calculate the funding percentage after taking into account the reinstatement
of any current or future benefit adjustment provided under this section.
(3) Effective for teachers and/or beneficiaries of teachers who retired after June 30,
2012, or on or before June 30, 2015, the dollar amount in subsection (g)(1)(B)(II)
of twenty-five thousand eight hundred and fifty-five dollars ($25,855) shall be replaced
with thirty-one thousand and twenty-six dollars ($31,026) until the funded ratio of
the employees' retirement system of Rhode Island, the judicial retirement benefits
trust, and the state police retirement benefits trust, calculated by the system's
actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1, 2024,
the funded ratio of the employees' retirement system of Rhode Island, the judicial
retirement benefits trust, and the state police retirement benefits trust, calculated
by the system's actuary on an aggregate basis, of exceeding eighty percent (80%) shall
be replaced with seventy-five percent (75%).
(4) Effective for teachers and/or beneficiaries of teachers who have retired on or before
July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within
sixty (60) days following the enactment of the legislation implementing this provision,
and a second one-time stipend of five hundred dollars ($500) in the same month of
the following year. These stipends shall be payable to all retired teachers or beneficiaries
receiving a benefit as of the applicable payment date and shall not be considered
cost of living adjustments under the prior provisions of this section.