§ 45-21-52. Automatic increase in service retirement allowance.
(a) The local legislative bodies of the cities and towns may extend to their respective
employees automatic adjustment increases in their service retirement allowances, by
a resolution accepting any of the plans described in this section:
(1) Plan A. All employees and beneficiaries of those employees receiving a service retirement
or disability retirement allowance under the provisions of this chapter on December
31 of the year their city or town accepts this section, receive a cost of living adjustment
equal to one and one-half percent (1.5%) per year of the original retirement allowance,
not compounded, for each calendar year the retirement allowance has been in effect.
This cost of living adjustment is added to the amount of the retirement allowance
as of January 1 following acceptance of this provision, and an additional one and
one-half percent (1.5%) is added to the original retirement allowance in each succeeding
year during the month of January, and provided, further, that this additional cost
of living increase is three percent (3%) for the year beginning January 1 of the year
the plan is accepted and each succeeding year.
(2) Plan B. All employees and beneficiaries of those employees receiving a retirement allowance
under the provisions of this chapter on December 31 of the year their municipality
accepts this section, receive a cost of living adjustment equal to three percent (3%)
of their original retirement allowance. This adjustment is added to the amount of
the retirement allowance as of January 1 following acceptance of this provision, and
an additional three percent (3%) of the original retirement allowance, not compounded,
is payable in each succeeding year in the month of January.
(3) Plan C. All employees and beneficiaries of those employees who retire on or after January
1 of the year following acceptance of this section, on the first day of January next
following the date of the retirement, receive a cost of living adjustment in an amount
equal to three percent (3%) of the original retirement allowance.
(b) In each succeeding year in the month of January, the retirement allowance is increased
an additional three percent (3%) of the original retirement allowance, not compounded.
(c) This subsection (c) shall be effective for the period July 1, 2012, through June 30,
2015.
(1) Notwithstanding any other subsections of this section, and subject to subsection (c)(2)
below, for all present and former employees, active and retired members, and beneficiaries
receiving any retirement, disability or death allowance or benefit of any kind by
reason of adoption of this section by their employer, 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 member'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 (c)(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 (c)(2) below, the benefit adjustment provided by this subsection (c)(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;
or for municipal police and fire retiring under the provisions of chapter 21.2 of
this title, the benefit adjustment provided by this subsection (c)(1) shall commence
on the later of the third (3rd) anniversary of the date of retirement or the date
on which the retiree reaches age fifty-five (55). 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 (c)(3) the benefit adjustments provided under this
section for any plan year shall be reduced to twenty-five percent (25%) of the benefit
adjustment for each municipal plan within the municipal employees' retirement system
unless the municipal plan is determined to be funded at a Funded Ratio equal to or
greater than eighty percent (80%) as of the end of the immediately preceding plan
year in accordance with the retirement system's actuarial valuation report as prepared
by the system's actuary, in which event the benefit adjustment will be reinstated
for all members for such plan year.
In determining whether a funding level under this subsection (c)(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 (c)(2), for each municipal plan that has a Funded Ratio
of less than eighty percent (80%) as of June 30, 2012, 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 (5) plan years, a benefit adjustment shall be calculated and
made in accordance with subsection (c)(1) above until the municipal plan's Funded
Ratio exceeds eighty percent (80%).
(d) This subsection (d) shall become effective July 1, 2015.
(1)(A) As soon as administratively reasonable following the enactment into law of this subsection
(d)(1)(A), a one-time benefit adjustment shall be provided to members and/or beneficiaries
of members who retired on or before June 30, 2012, in the amount of two percent (2%)
of the lesser of either the employee's retirement allowance or the first twenty-five
thousand dollars ($25,000) of the member'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
employees, active and retired employees, and beneficiaries receiving any retirement,
disability or death allowance or benefit of any kind by reason of adoption of this
section by their employer, the annual benefit adjustment provided in any calendar
year under this section for adjustments on and after January 1, 2016, and subject
to subsection (d)(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 zero percent (0%).
(II) is equal to the lesser of either the member'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 (d)(1)(B)(I)
above.
The benefit adjustments provided by this subsection (d)(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 their Social Security retirement age, whichever is later; or for municipal
police and fire retiring under the provisions of § 45-21.2-5(b)(1)(A), the benefit adjustment provided by this subsection (d)(1)(B) shall commence on the
later of the third anniversary of the date of retirement or the date on which the
retiree reaches age fifty-five (55); or for municipal police and fire retiring under
the provisions of § 45-21.2-5(b)(1)(B), the benefit adjustment provided by this subsection (d)(1)(B) shall commence on the
later of the third anniversary of the date of retirement or the date on which the
retiree reaches age fifty (50).
(2) Except for municipal employees and/or beneficiaries of municipal employees who retired
on or before June 30, 2012, the benefit adjustments under subsection (d)(1)(B) for
any plan year shall be reduced to twenty-five percent (25%) of the benefit adjustment
for each municipal plan within the municipal employees' retirement system unless the
municipal plan is determined to be funded at a funded ratio equal to or greater than
eighty percent (80%) as of the end of the immediately preceding plan year in accordance
with the retirement system's actuarial valuation report as prepared by the system's
actuary, in which event the benefit adjustment will be reinstated for all members
for such plan year. Effective July 1, 2024, the funded ratio for each municipal plan
within the municipal employees' retirement system, calculated by the system's actuary,
of equal to or greater than eighty percent (80%) for the benefit adjustment to be
reinstated for all members for such plan year shall be replaced with seventy-five
percent (75%).
In determining whether a funding level under this subsection (d)(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 members and/or beneficiaries of members who retired after June 30, 2012,
or on or before June 30, 2015, the dollar amount in (d)(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 municipal plan's funded ratio exceeds eighty
percent (80%). Effective July 1, 2024, the funded ratio for each municipal plan within
the municipal employees' retirement system, calculated by the system's actuary, of
exceeding eighty percent (80%) for the benefit adjustment to be reinstated for all
members for such plan year shall be replaced with seventy-five percent (75%).
(e) Upon acceptance of any of the plans in this section, each employee shall on January
1 next succeeding the acceptance, contribute by means of salary deductions, pursuant
to § 45-21-41, one percent (1%) of the employee's compensation concurrently with and in addition
to contributions otherwise being made to the retirement system.
(f) The city or town shall make any additional contributions to the system, pursuant to
the terms of § 45-21-42, for the payment of any benefits provided by this section.
(g) The East Greenwich town council shall be allowed to accept Plan C of subsection (a)(3)
of this section for all employees of the town of East Greenwich who either, pursuant
to contract negotiations, bargain for Plan C, or who are non-union employees who are
provided with Plan C and who shall all collectively be referred to as the "Municipal-COLA
Group� and shall be separate from all other employees of the town and school department,
union or non-union, who are in the same pension group but have not been granted Plan
C benefits. Upon acceptance by the town council, benefits in accordance with this
section shall be available to all such employees who retire on or after January 1,
2003.
(h) Effective for members and/or beneficiaries of members who have retired on or before
July 1, 2015, and without regard to whether the retired member or beneficiary is receiving
a benefit adjustment under this section, 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 not be considered
cost of living adjustments under the prior provisions of this section.