AN ACT RELATING TO EDUCATION -- TEACHERS' RETIREMENT (Reinstates, for all teachers and state employees who retired after July 1, 2012, their annual cost of living adjustment for retirement plan year 2026.)

S3100

2026 -- S 3100
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LC006065
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
____________
A N A C T
RELATING TO EDUCATION -- TEACHERS' RETIREMENT

Introduced By:
Senators Burke, Sosnowski, Ciccone, Tikoian, Felag, LaMountain,
McKenney, Gallo, and DiPalma

Date Introduced:
March 13, 2026

Referred To:
Senate Finance
It is enacted by the General Assembly as follows:
1
SECTION 1. Section 16-16-40 of the General Laws in Chapter 16-16 entitled "Teachers’
2
Retirement [See Title 16 Chapter 97 — The Rhode Island Board of Education Act]" is hereby
3
amended to read as follows:
4

16-16-40. Additional benefits payable to retired teachers.
5
(a) All teachers and all beneficiaries of teachers receiving any service retirement or
6
ordinary or accidental disability retirement allowance pursuant to the provisions of this chapter and
7
chapter 17 of this title, on or before December 31, 1967, shall receive a cost of living retirement
8
adjustment equal to one and one-half percent (1.5%) per year of the original retirement allowance,
9
not compounded, for each year the retirement allowance has been in effect. For purposes of
10
computation credit shall be given for a full calendar year regardless of the effective date of the
11
retirement allowance. This cost of living retirement adjustment shall be added to the amount of the
12
service retirement allowance as of January 1, 1970, and payment shall begin as of July 1, 1970. An
13
additional cost of living retirement adjustment shall be added to the original retirement allowance
14
equal to three percent (3%) of the original retirement allowance on the first day of January, 1971,
15
and each year thereafter through December 31, 1980.
16
(b) All teachers and beneficiaries of teachers receiving any service retirement or ordinary
17
disability retirement allowance pursuant to the provisions of this title who retired on or after January
18
1, 1968, shall, on the first day of January, next following the third (3rd) year on retirement, receive
19
a cost of living adjustment, in addition to their retirement allowance, an amount equal to three

1
percent (3%) of the original retirement allowance. In each succeeding year thereafter, on the first
2
day of January, the retirement allowance shall be increased an additional three percent (3%) of the
3
original retirement allowance, not compounded, to be continued through December 31, 1980.
4
(c)(1) Beginning on January 1, 1981, for all teachers and beneficiaries of teachers receiving
5
any service retirement and all teachers and all beneficiaries of teachers who have completed at least
6
ten (10) years of contributory service on or before July 1, 2005, pursuant to the provisions of this
7
chapter, and for all teachers and beneficiaries of teachers who receive a disability retirement
8
allowance pursuant to §§ 16-16-14 — 16-16-17, the cost of living adjustment shall be computed
9
and paid at the rate of three percent (3%) of the original retirement allowance or the retirement
10
allowance as computed in accordance with § 16-16-40.1, compounded annually from the year for
11
which the cost of living adjustment was determined to be payable by the retirement board pursuant
12
to the provisions of subsection (a) or (b) of this section. Such cost of living adjustments are available
13
to teachers who retire before October 1, 2009, or are eligible to retire as of September 30, 2009.
14
(2) The provisions of this subsection shall be deemed to apply prospectively only and no
15
retroactive payment shall be made.
16
(3) The retirement allowance of all teachers and all beneficiaries of teachers who have not
17
completed at least ten (10) years of contributory service on or before July 1, 2005, or were not
18
eligible to retire as of September 30, 2009, shall, on the month following the third anniversary date
19
of the retirement, and on the month following the anniversary date of each succeeding year be
20
adjusted and computed by multiplying the retirement allowance by three percent (3%) or the
21
percentage of increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published
22
by the United States Department of Labor Statistics, determined as of September 30 of the prior
23
calendar year, whichever is less; the cost of living adjustment shall be compounded annually from
24
the year for which the cost of living adjustment was determined payable by the retirement board;
25
provided, that no adjustment shall cause any retirement allowance to be decreased from the
26
retirement allowance provided immediately before such adjustment.
27
(d) For teachers not eligible to retire in accordance with this chapter as of September 30,
28
2009, and not eligible upon passage of this article, and for their beneficiaries, the cost of living
29
adjustment described in subsection (c)(3) of this section shall only apply to the first thirty-five
30
thousand dollars ($35,000) of retirement allowance, indexed annually, and shall commence upon
31
the third (3rd) anniversary of the date of retirement or when the retiree reaches age sixty-five (65),
32
whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase annually by the
33
percentage increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published
34
by the United States Department of Labor Statistics determined as of September 30 of the prior

LC006065 - Page 2 of 24
1
calendar year or three percent (3%), whichever is less. The first thirty-five thousand dollars
2
($35,000), as indexed, of retirement allowance shall be multiplied by the percentage of increase in
3
the Consumer Price Index for All Urban Consumers (CPI-U) as published by the United States
4
Department of Labor Statistics determined as of September 30 of the prior calendar year or three
5
percent (3%), whichever is less, on the month following the anniversary date of each succeeding
6
year. For teachers eligible to retire as of September 30, 2009, or eligible upon passage of this article,
7
and for their beneficiaries, the provisions of this subsection (d) shall not apply.
8
(e) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section.
9
(f) This subsection (f) shall be effective for the period July 1, 2012, through June 30, 2015.
10
(1) Notwithstanding the prior paragraphs of this section, and subject to subsection (f)(2)
11
below, for all present and former teachers, active and retired teachers, and beneficiaries receiving
12
any retirement, disability or death allowance or benefit of any kind, the annual benefit adjustment
13
provided in any calendar year under this section shall be equal to (A) multiplied by (B) where (A)
14
is equal to the percentage determined by subtracting five and one-half percent (5.5%) (the
15
“subtrahend”) from the Five-Year Average Investment Return of the retirement system determined
16
as of the last day of the plan year preceding the calendar year in which the adjustment is granted,
17
said percentage not to exceed four percent (4%) and not to be less than zero percent (0%), and (B)
18
is equal to the lesser of the teacher’s retirement allowance or the first twenty-five thousand dollars
19
($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000) amount to be
20
indexed annually in the same percentage as determined under (f)(1)(A) above. The “Five-Year
21
Average Investment Return” shall mean the average of the investment returns of the most recent
22
five (5) plan years as determined by the retirement board. Subject to subsection (f)(2) below, the
23
benefit adjustment provided by this subsection (f)(1) shall commence upon the third (3rd)
24
anniversary of the date of retirement or the date on which the retiree reaches their Social Security
25
retirement age, whichever is later. In the event the retirement board adjusts the actuarially assumed
26
rate of return for the system, either upward or downward, the subtrahend shall be adjusted either
27
upward or downward in the same amount.
28
(2) Except as provided in subsection (f)(3), the benefit adjustments under this section for
29
any plan year shall be suspended in their entirety unless the funded ratio of the employees’
30
retirement system of Rhode Island, the judicial retirement benefits trust, and the state police
31
retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty
32
percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan
33
year.
34
In determining whether a funding level under this subsection (f)(2) has been achieved, the

LC006065 - Page 3 of 24
1
actuary shall calculate the funding percentage after taking into account the reinstatement of any
2
current or future benefit adjustment provided under this section.
3
(3) Notwithstanding subsection (f)(2), in each fifth plan year commencing after June 30,
4
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 (f)(1)
6
above until the funded ratio of the employees’ retirement system of Rhode Island, the judicial
7
retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s
8
actuary on an aggregate basis, exceeds eighty percent (80%).
9
(4) Notwithstanding any other provisions of this chapter, the provisions of this subsection
10
(f) shall become effective July 1, 2012, and shall apply to any benefit adjustments not granted on
11
or prior to June 30, 2012.
12
(g) This subsection (g) shall become effective July 1, 2015.
13
(1)(A) As soon as administratively reasonable following the enactment into law of this
14
subsection (g)(1)(A), a one-time benefit adjustment shall be provided to teachers and/or
15
beneficiaries of teachers who retired on or before June 30, 2012, in the amount of two percent (2%)
16
of the lesser of either the teacher’s retirement allowance or the first twenty-five thousand dollars
17
($25,000) of the teacher’s retirement allowance. This one-time benefit adjustment shall be provided
18
without regard to the retiree’s age or number of years since retirement.
19
(B) Notwithstanding the prior subsections of this section, for all present and former
20
teachers, active and retired teachers, and beneficiaries receiving any retirement, disability, or death
21
allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year under
22
this section for adjustments on and after January 1, 2016, and subject to subsection (g)(2) below,
23
shall be equal to (I) multiplied by (II):
24
(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where:
25
(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%)
26
(the “subtrahend”) from the five-year average investment return of the retirement system
27
determined as of the last day of the plan year preceding the calendar year in which the adjustment
28
is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent
29
(0%). The “five-year average investment return” shall mean the average of the investment returns
30
of the most recent five (5) plan years as determined by the retirement board. In the event the
31
retirement board adjusts the actuarially assumed rate of return for the system, either upward or
32
downward, the subtrahend shall be adjusted either upward or downward in the same amount.
33
(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer
34
Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor

LC006065 - Page 4 of 24
1
Statistics determined as of September 30 of the prior calendar year.
2
In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less
3
than (0%) percent.
4
(II) is equal to the lesser of either the teacher’s retirement allowance or the first twenty-
5
five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount
6
to be indexed annually in the same percentage as determined under subsection (g)(1)(B)(I) above.
7
The benefit adjustments provided by this subsection (g)(1)(B) shall be provided to all
8
retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect,
9
and for all other retirees the benefit adjustments shall commence upon the third anniversary of the
10
date of retirement or the date on which the retiree reaches his or her Social Security retirement age,
11
whichever is later.
12
(2)
Except for teachers and/or beneficiaries of teachers who retired on or before June 30,
13
2012, the benefit adjustments under subsection (g)(1)(B) for any plan year shall be reduced to
14
twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’
15
retirement system of Rhode Island, the judicial retirement benefits trust, and the state police
16
retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty
17
percent (80%) in which event the benefit adjustment will be reinstated for all teachers for such plan
18
year.
Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode Island,
19
the judicial retirement benefits trust, and the state police retirement benefits trust, calculated by the
20
system’s actuary on an aggregate basis, of exceeding eighty percent (80%) for the benefit
21
adjustment to be reinstated for all teachers for such plan year shall be replaced with seventy-five
22
percent (75%).
For plan year 2026, eligible retirees who retired after July 1, 2012, shall receive
23
reinstatement of their full annual COLA.
24
In determining whether a funding level under this subsection (g)(2) has been achieved, the
25
actuary shall calculate the funding percentage after taking into account the reinstatement of any
26
current or future benefit adjustment provided under this section.
27
(3) Effective for teachers and/or beneficiaries of teachers who retired after June 30, 2012,
28
or on or before June 30, 2015, the dollar amount in subsection (g)(1)(B)(II) of twenty-five thousand
29
eight hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and
30
twenty-six dollars ($31,026) until the funded ratio of the employees’ retirement system of Rhode
31
Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated
32
by the system’s actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1,
33
2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement
34
benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on

LC006065 - Page 5 of 24
1
an aggregate basis, of exceeding eighty percent (80%) shall be replaced with seventy-five percent
2
(75%).
3
(4) Effective for teachers and/or beneficiaries of teachers who have retired on or before
4
July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60)
5
days following the enactment of the legislation implementing this provision, and a second one-time
6
stipend of five hundred dollars ($500) in the same month of the following year. These stipends
7
shall be payable to all retired teachers or beneficiaries receiving a benefit as of the applicable
8
payment date and shall not be considered cost of living adjustments under the prior provisions of
9
this section.
10
SECTION 2. Section 36-10-35 of the General Laws in Chapter 36-10 entitled "Retirement
11
System — Contributions and Benefits" is hereby amended to read as follows:
12

36-10-35. Additional benefits payable to retired employees.
13
(a) All state employees and all beneficiaries of state employees receiving any service
14
retirement or ordinary or accidental disability retirement allowance pursuant to the provisions of
15
this title on or before December 31, 1967, shall receive a cost of living retirement adjustment equal
16
to one and one-half percent (1.5%) per year of the original retirement allowance, not compounded,
17
for each calendar year the retirement allowance has been in effect. For the purposes of computation,
18
credit shall be given for a full calendar year regardless of the effective date of the retirement
19
allowance. This cost of living adjustment shall be added to the amount of the retirement allowance
20
as of January 1, 1968, and an additional one and one-half percent (1.5%) shall be added to the
21
original retirement allowance in each succeeding year during the month of January, and provided
22
further, that this additional cost of living increase shall be three percent (3%) for the year beginning
23
January 1, 1971, and each year thereafter, through December 31, 1980. Notwithstanding any of the
24
above provisions, no employee receiving any service retirement allowance pursuant to the
25
provisions of this title on or before December 31, 1967, or the employee’s beneficiary, shall receive
26
any additional benefit hereunder in an amount less than two hundred dollars ($200) per year over
27
the service retirement allowance where the employee retired prior to January 1, 1958.
28
(b) All state employees and all beneficiaries of state employees retired on or after January
29
1, 1968, who are receiving any service retirement or ordinary or accidental disability retirement
30
allowance pursuant to the provisions of this title shall, on the first day of January next following
31
the third anniversary date of the retirement, receive a cost of living retirement adjustment, in
32
addition to their retirement allowance, in an amount equal to three percent (3%) of the original
33
retirement allowance. In each succeeding year thereafter through December 31, 1980, during the
34
month of January, the retirement allowance shall be increased an additional three percent (3%) of

LC006065 - Page 6 of 24
1
the original retirement allowance, not compounded, to be continued during the lifetime of the
2
employee or beneficiary. For the purposes of computation, credit shall be given for a full calendar
3
year regardless of the effective date of the service retirement allowance.
4
(c)(1) Beginning on January 1, 1981, for all state employees and beneficiaries of the state
5
employees receiving any service retirement and all state employees, and all beneficiaries of state
6
employees, who have completed at least ten (10) years of contributory service on or before July 1,
7
2005, pursuant to the provisions of this chapter, and for all state employees, and all beneficiaries
8
of state employees who receive a disability retirement allowance pursuant to §§ 36-10-12 — 36-
9
10-15, the cost of living adjustment shall be computed and paid at the rate of three percent (3%) of
10
the original retirement allowance or the retirement allowance as computed in accordance with §
11
36-10-35.1, compounded annually from the year for which the cost of living adjustment was
12
determined to be payable by the retirement board pursuant to the provisions of subsection (a) or (b)
13
of this section. Such cost of living adjustments are available to members who retire before October
14
1, 2009, or are eligible to retire as of September 30, 2009.
15
(2) The provisions of this subsection shall be deemed to apply prospectively only and no
16
retroactive payment shall be made.
17
(3) The retirement allowance of all state employees and all beneficiaries of state employees
18
who have not completed at least ten (10) years of contributory service on or before July 1, 2005, or
19
were not eligible to retire as of September 30, 2009, shall, on the month following the third
20
anniversary date of retirement, and on the month following the anniversary date of each succeeding
21
year be adjusted and computed by multiplying the retirement allowance by three percent (3%) or
22
the percentage of increase in the Consumer Price Index for All Urban Consumers (CPI-U) as
23
published by the United States Department of Labor Statistics determined as of September 30 of
24
the prior calendar year, whichever is less; the cost of living adjustment shall be compounded
25
annually from the year for which the cost of living adjustment was determined payable by the
26
retirement board; provided, that no adjustment shall cause any retirement allowance to be decreased
27
from the retirement allowance provided immediately before such adjustment.
28
(d) For state employees not eligible to retire in accordance with this chapter as of
29
September 30, 2009, and not eligible upon passage of this article, and for their beneficiaries, the
30
cost of living adjustment described in subsection (c)(3) of this section shall only apply to the first
31
thirty-five thousand dollars ($35,000) of retirement allowance, indexed annually, and shall
32
commence upon the third (3rd) anniversary of the date of retirement or when the retiree reaches
33
age sixty-five (65), whichever is later. The thirty-five thousand dollar ($35,000) limit shall increase
34
annually by the percentage increase in the Consumer Price Index for All Urban Consumers (CPI-

LC006065 - Page 7 of 24
1
U) as published by the United States Department of Labor Statistics determined as of September
2
30 of the prior calendar year or three percent (3%), whichever is less. The first thirty-five thousand
3
dollars ($35,000) of retirement allowance, as indexed, shall be multiplied by the percentage of
4
increase in the Consumer Price Index for All Urban Consumers (CPI-U) as published by the United
5
States Department of Labor Statistics determined as of September 30 of the prior calendar year or
6
three percent (3%), whichever is less, on the month following the anniversary date of each
7
succeeding year. For state employees eligible to retire as of September 30, 2009, or eligible upon
8
passage of this article, and for their beneficiaries, the provisions of this subsection (d) shall not
9
apply.
10
(e) All legislators and all beneficiaries of legislators who are receiving a retirement
11
allowance pursuant to the provisions of § 36-10-9.1 for a period of three (3) or more years, shall,
12
commencing January 1, 1982, receive a cost of living retirement adjustment, in addition to a
13
retirement allowance, in an amount equal to three percent (3%) of the original retirement allowance.
14
In each succeeding year thereafter during the month of January, the retirement allowance shall be
15
increased an additional three percent (3%) of the original retirement allowance, compounded
16
annually, to be continued during the lifetime of the legislator or beneficiary. For the purposes of
17
computation, credit shall be given for a full calendar year regardless of the effective date of the
18
service retirement allowance.
19
(f) The provisions of §§ 45-13-7 — 45-13-10 shall not apply to this section.
20
(g) This subsection (g) shall be effective for the period July 1, 2012, through June 30, 2015.
21
(1) Notwithstanding the prior paragraphs of this section, and subject to subsection (g)(2)
22
below, for all present and former employees, active and retired members, and beneficiaries
23
receiving any retirement, disability or death allowance or benefit of any kind, the annual benefit
24
adjustment provided in any calendar year under this section shall be equal to (A) multiplied by (B)
25
where (A) is equal to the percentage determined by subtracting five and one-half percent (5.5%)
26
(the “subtrahend”) from the Five-Year Average Investment Return of the retirement system
27
determined as of the last day of the plan year preceding the calendar year in which the adjustment
28
is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent
29
(0%), and (B) is equal to the lesser of the member’s retirement allowance or the first twenty-five
30
thousand dollars ($25,000) of retirement allowance, such twenty-five thousand dollars ($25,000)
31
amount to be indexed annually in the same percentage as determined under (g)(1)(A) above. The
32
“Five-Year Average Investment Return” shall mean the average of the investment returns of the
33
most recent five (5) plan years as determined by the retirement board. Subject to subsection (g)(2)
34
below, the benefit adjustment provided by this subsection (g)(1) shall commence upon the third

LC006065 - Page 8 of 24
1
(3rd) anniversary of the date of retirement or the date on which the retiree reaches their Social
2
Security retirement age, whichever is later. In the event the retirement board adjusts the actuarially
3
assumed rate of return for the system, either upward or downward, the subtrahend shall be adjusted
4
either upward or downward in the same amount.
5
(2) Except as provided in subsection (g)(3), the benefit adjustments under this section for
6
any plan year shall be suspended in their entirety unless the funded ratio of the employees’
7
retirement system of Rhode Island, the judicial retirement benefits trust, and the state police
8
retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty
9
percent (80%) in which event the benefit adjustment will be reinstated for all members for such
10
plan year.
11
In determining whether a funding level under this subsection (g)(2) has been achieved, the
12
actuary shall calculate the funding percentage after taking into account the reinstatement of any
13
current or future benefit adjustment provided under this section.
14
(3) Notwithstanding subsection (g)(2), in each fifth plan year commencing after June 30,
15
2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of five
16
plan years, a benefit adjustment shall be calculated and made in accordance with subsection (g)(1)
17
above until the funded ratio of the employees’ retirement system of Rhode Island, the judicial
18
retirement benefits trust, and the state police retirement benefits trust, calculated by the system’s
19
actuary on an aggregate basis, exceeds eighty percent (80%).
20
(4) Notwithstanding any other provision of this chapter, the provisions of this subsection
21
(g) shall become effective July 1, 2012, and shall apply to any benefit adjustment not granted on or
22
prior to June 30, 2012.
23
(h) This subsection (h) shall become effective July 1, 2015.
24
(1)(A) As soon as administratively reasonable following the enactment into law of this
25
subsection (h)(1)(A), a one-time benefit adjustment shall be provided to members and/or
26
beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent
27
(2%) of the lesser of either the member’s retirement allowance or the first twenty-five thousand
28
dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be
29
provided without regard to the retiree’s age or number of years since retirement.
30
(B) Notwithstanding the prior subsections of this section, for all present and former
31
employees, active and retired members, and beneficiaries receiving any retirement, disability or
32
death allowance or benefit of any kind, the annual benefit adjustment provided in any calendar year
33
under this section for adjustments on and after January 1, 2016, and subject to subsection (h)(2)
34
below, shall be equal to (I) multiplied by (II):

LC006065 - Page 9 of 24
1
(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where:
2
(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%)
3
(the “subtrahend”) from the five-year average investment return of the retirement system
4
determined as of the last day of the plan year preceding the calendar year in which the adjustment
5
is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent
6
(0%). The “five-year average investment return” shall mean the average of the investment returns
7
of the most recent five (5) plan years as determined by the retirement board. In the event the
8
retirement board adjusts the actuarially assumed rate of return for the system, either upward or
9
downward, the subtrahend shall be adjusted either upward or downward in the same amount.
10
(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer
11
Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor
12
Statistics determined as of September 30 of the prior calendar year. In no event shall the sum of (i)
13
plus (ii) exceed three and one-half percent (3.5%) or be less than zero percent (0%).
14
(II) is equal to the lesser of either the member’s retirement allowance or the first twenty-
15
five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount
16
to be indexed annually in the same percentage as determined under subsection (h)(1)(B)(I) above.
17
The benefit adjustments provided by this subsection (h)(1)(B) shall be provided to all
18
retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect,
19
and for all other retirees the benefit adjustments shall commence upon the third anniversary of the
20
date of retirement or the date on which the retiree reaches their Social Security retirement age,
21
whichever is later.
22
(2)
Except for members and/or beneficiaries of members who retired on or before June 30,
23
2012, the benefit adjustments under subsection (h)(1)(B) for any plan year shall be reduced to
24
twenty-five percent (25%) of the benefit adjustment unless the funded ratio of the employees’
25
retirement system of Rhode Island, the judicial retirement benefits trust, and the state police
26
retirement benefits trust, calculated by the system’s actuary on an aggregate basis, exceeds eighty
27
percent (80%) in which event the benefit adjustment will be reinstated for all members for such
28
plan year.
Effective July 1, 2024, the funded ratio of the employees’ retirement system of Rhode
29
Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated
30
by the system’s actuary on an aggregate basis, of exceeding eighty percent (80%) for the benefit
31
adjustment to be reinstated for all members for such plan year shall be replaced with seventy-five
32
percent (75%).
For plan year 2026, eligible retirees who retired after July 1, 2012, shall receive
33
reinstatement of their full annual COLA..
34
In determining whether a funding level under this subsection (h)(2) has been achieved, the

LC006065 - Page 10 of 24
1
actuary shall calculate the funding percentage after taking into account the reinstatement of any
2
current or future benefit adjustment provided under this section.
3
(3) Effective for members and/or beneficiaries of members who retired after June 30, 2012,
4
or on or before June 30, 2015, the dollar amount in subsection (h)(1)(B)(II) of twenty-five thousand
5
eight hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and
6
twenty-six dollars ($31,026) until the funded ratio of the employees’ retirement system of Rhode
7
Island, the judicial retirement benefits trust, and the state police retirement benefits trust, calculated
8
by the system’s actuary on an aggregate basis, exceeds eighty percent (80%). Effective July 1,
9
2024, the funded ratio of the employees’ retirement system of Rhode Island, the judicial retirement
10
benefits trust, and the state police retirement benefits trust, calculated by the system’s actuary on
11
an aggregate basis, of exceeding eighty percent (80%) shall be replaced with seventy-five percent
12
(75%).
13
(i) Effective for members and/or beneficiaries of members who have retired on or before
14
July 1, 2015, a one-time stipend of five hundred dollars ($500) shall be payable within sixty (60)
15
days following the enactment of the legislation implementing this provision, and a second one-time
16
stipend of five hundred dollars ($500) in the same month of the following year. These stipends
17
shall be payable to all retired members or beneficiaries receiving a benefit as of the applicable
18
payment date and shall not be considered cost of living adjustments under the prior provisions of
19
this section.
20
SECTION 3. Section 44-30-12 of the General Laws in Chapter 44-30 entitled "Personal
21
Income Tax" is hereby amended to read as follows:
22

44-30-12. Rhode Island income of a resident individual. [Effective January 1, 2025.]
23
(a)
General.
The Rhode Island income of a resident individual means the individual’s
24
adjusted gross income for federal income tax purposes, with the modifications specified in this
25
section.
26
(b)
Modifications increasing federal adjusted gross income.
There shall be added to
27
federal adjusted gross income:
28
(1) Interest income on obligations of any state, or its political subdivisions, other than
29
Rhode Island or its political subdivisions;
30
(2) Interest or dividend income on obligations or securities of any authority, commission,
31
or instrumentality of the United States, but not of Rhode Island or its political subdivisions, to the
32
extent exempted by the laws of the United States from federal income tax but not from state income
33
taxes;
34
(3) The modification described in § 44-30-25(g);

LC006065 - Page 11 of 24
1
(4)(i) The amount defined below of a nonqualified withdrawal made from an account in
2
the tuition savings program pursuant to § 16-57-6.1. For purposes of this section, a nonqualified
3
withdrawal is:
4
(A) A transfer or rollover to a qualified tuition program under Section 529 of the Internal
5
Revenue Code, 26 U.S.C. § 529, other than to the tuition savings program referred to in § 16-57-
6
6.1; and
7
(B) A withdrawal or distribution that is:
8
(I) Not applied on a timely basis to pay “qualified higher education expenses” as defined
9
in § 16-57-3(12) of the beneficiary of the account from which the withdrawal is made;
10
(II) Not made for a reason referred to in § 16-57-6.1(e); or
11
(III) Not made in other circumstances for which an exclusion from tax made applicable by
12
Section 529 of the Internal Revenue Code, 26 U.S.C. § 529, pertains if the transfer, rollover,
13
withdrawal, or distribution is made within two (2) taxable years following the taxable year for
14
which a contributions modification pursuant to subsection (c)(4) of this section is taken based on
15
contributions to any tuition savings program account by the person who is the participant of the
16
account at the time of the contribution, whether or not the person is the participant of the account
17
at the time of the transfer, rollover, withdrawal, or distribution;
18
(ii) In the event of a nonqualified withdrawal under subsection (b)(4)(i)(A) or (b)(4)(i)(B)
19
of this section, there shall be added to the federal adjusted gross income of that person for the
20
taxable year of the withdrawal an amount equal to the lesser of:
21
(A) The amount equal to the nonqualified withdrawal reduced by the sum of any
22
administrative fee or penalty imposed under the tuition savings program in connection with the
23
nonqualified withdrawal plus the earnings portion thereof, if any, includible in computing the
24
person’s federal adjusted gross income for the taxable year; and
25
(B) The amount of the person’s contribution modification pursuant to subsection (c)(4) of
26
this section for the person’s taxable year of the withdrawal and the two (2) prior taxable years less
27
the amount of any nonqualified withdrawal for the two (2) prior taxable years included in
28
computing the person’s Rhode Island income by application of this subsection for those years. Any
29
amount added to federal adjusted gross income pursuant to this subdivision shall constitute Rhode
30
Island income for residents, nonresidents, and part-year residents;
31
(5) The modification described in § 44-30-25.1(d)(3)(i);
32
(6) The amount equal to any unemployment compensation received but not included in
33
federal adjusted gross income;
34
(7) The amount equal to the deduction allowed for sales tax paid for a purchase of a

LC006065 - Page 12 of 24
1
qualified motor vehicle as defined by the Internal Revenue Code § 164(a)(6); and
2
(8) For any taxable year beginning on or after January 1, 2020, the amount of any Paycheck
3
Protection Program loan forgiven for federal income tax purposes as authorized by the Coronavirus
4
Aid, Relief, and Economic Security Act and/or the Consolidated Appropriations Act, 2021 and/or
5
any other subsequent federal stimulus relief packages enacted by law, to the extent that the amount
6
of the loan forgiven exceeds $250,000, including an individual’s distributive share of the amount
7
of a pass-through entity’s loan forgiveness in excess of $250,000.
8
(c)
Modifications reducing federal adjusted gross income.
There shall be subtracted
9
from federal adjusted gross income:
10
(1) Any interest income on obligations of the United States and its possessions to the extent
11
includible in gross income for federal income tax purposes, and any interest or dividend income on
12
obligations, or securities of any authority, commission, or instrumentality of the United States to
13
the extent includible in gross income for federal income tax purposes but exempt from state income
14
taxes under the laws of the United States; provided, that the amount to be subtracted shall in any
15
case be reduced by any interest on indebtedness incurred or continued to purchase or carry
16
obligations or securities the income of which is exempt from Rhode Island personal income tax, to
17
the extent the interest has been deducted in determining federal adjusted gross income or taxable
18
income;
19
(2) A modification described in § 44-30-25(f) or § 44-30-1.1(c)(1);
20
(3) The amount of any withdrawal or distribution from the “tuition savings program”
21
referred to in § 16-57-6.1 that is included in federal adjusted gross income, other than a withdrawal
22
or distribution or portion of a withdrawal or distribution that is a nonqualified withdrawal;
23
(4) Contributions made to an account under the tuition savings program, including the
24
“contributions carryover” pursuant to subsection (c)(4)(iv) of this section, if any, subject to the
25
following limitations, restrictions, and qualifications:
26
(i) The aggregate subtraction pursuant to this subdivision for any taxable year of the
27
taxpayer shall not exceed five hundred dollars ($500) or one thousand dollars ($1,000) if a joint
28
return;
29
(ii) The following shall not be considered contributions:
30
(A) Contributions made by any person to an account who is not a participant of the account
31
at the time the contribution is made;
32
(B) Transfers or rollovers to an account from any other tuition savings program account or
33
from any other “qualified tuition program” under section 529 of the Internal Revenue Code, 26
34
U.S.C. § 529; or

LC006065 - Page 13 of 24
1
(C) A change of the beneficiary of the account;
2
(iii) The subtraction pursuant to this subdivision shall not reduce the taxpayer’s federal
3
adjusted gross income to less than zero (0);
4
(iv) The contributions carryover to a taxable year for purpose of this subdivision is the
5
excess, if any, of the total amount of contributions actually made by the taxpayer to the tuition
6
savings program for all preceding taxable years for which this subsection is effective over the sum
7
of:
8
(A) The total of the subtractions under this subdivision allowable to the taxpayer for all
9
such preceding taxable years; and
10
(B) That part of any remaining contribution carryover at the end of the taxable year which
11
exceeds the amount of any nonqualified withdrawals during the year and the prior two (2) taxable
12
years not included in the addition provided for in this subdivision for those years. Any such part
13
shall be disregarded in computing the contributions carryover for any subsequent taxable year;
14
(v) For any taxable year for which a contributions carryover is applicable, the taxpayer
15
shall include a computation of the carryover with the taxpayer’s Rhode Island personal income tax
16
return for that year, and if for any taxable year on which the carryover is based the taxpayer filed a
17
joint Rhode Island personal income tax return but filed a return on a basis other than jointly for a
18
subsequent taxable year, the computation shall reflect how the carryover is being allocated between
19
the prior joint filers;
20
(5) The modification described in § 44-30-25.1(d)(1);
21
(6) Amounts deemed taxable income to the taxpayer due to payment or provision of
22
insurance benefits to a dependent, including a domestic partner pursuant to chapter 12 of title 36 or
23
other coverage plan;
24
(7)
Modification for organ transplantation.
25
(i) An individual may subtract up to ten thousand dollars ($10,000) from federal adjusted
26
gross income if the individual, while living, donates one or more of their human organs to another
27
human being for human organ transplantation, except that for purposes of this subsection, “human
28
organ” means all or part of a liver, pancreas, kidney, intestine, lung, or bone marrow. A subtract
29
modification that is claimed hereunder may be claimed in the taxable year in which the human
30
organ transplantation occurs.
31
(ii) An individual may claim that subtract modification hereunder only once, and the
32
subtract modification may be claimed for only the following unreimbursed expenses that are
33
incurred by the claimant and related to the claimant’s organ donation:
34
(A) Travel expenses.

LC006065 - Page 14 of 24
1
(B) Lodging expenses.
2
(C) Lost wages.
3
(iii) The subtract modification hereunder may not be claimed by a part-time resident or a
4
nonresident of this state;
5
(8)
Modification for taxable Social Security income.
6
(i) For tax years beginning on or after January 1, 2016:
7
(A) For a person who has attained the age used for calculating full or unreduced Social
8
Security retirement benefits who files a return as an unmarried individual, head of household, or
9
married filing separate whose federal adjusted gross income for the taxable year is less than eighty
10
thousand dollars ($80,000); or
11
(B) A married individual filing jointly or individual filing qualifying widow(er) who has
12
attained the age used for calculating full or unreduced Social Security retirement benefits whose
13
joint federal adjusted gross income for the taxable year is less than one hundred thousand dollars
14
($100,000), an amount equal to the Social Security benefits includible in federal adjusted gross
15
income.
16
(ii) Adjustment for inflation. The dollar amount contained in subsections (c)(8)(i)(A) and
17
(c)(8)(i)(B) of this section shall be increased annually by an amount equal to:
18
(A) Such dollar amount contained in subsections (c)(8)(i)(A) and (c)(8)(i)(B) of this section
19
adjusted for inflation using a base tax year of 2000, multiplied by;
20
(B) The cost-of-living adjustment with a base year of 2000.
21
(iii) For the purposes of this section the cost-of-living adjustment for any calendar year is
22
the percentage (if any) by which the consumer price index for the preceding calendar year exceeds
23
the consumer price index for the base year. The consumer price index for any calendar year is the
24
average of the consumer price index as of the close of the twelve-month (12) period ending on
25
August 31, of such calendar year.
26
(iv) For the purpose of this section the term “consumer price index” means the last
27
consumer price index for all urban consumers published by the department of labor. For the purpose
28
of this section the revision of the consumer price index which is most consistent with the consumer
29
price index for calendar year 1986 shall be used.
30
(v) If any increase determined under this section is not a multiple of fifty dollars ($50.00),
31
such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a
32
married individual filing separate return, if any increase determined under this section is not a
33
multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple
34
of twenty-five dollars ($25.00);

LC006065 - Page 15 of 24
1
(9)
Modification of taxable retirement income from certain pension plans or
2
annuities.
3
(i) For tax years beginning on or after January 1, 2017, until the tax year beginning January
4
1, 2022, a modification shall be allowed for up to fifteen thousand dollars ($15,000), and for tax
5
years beginning on or after January 1, 2023, until the tax year beginning January 1, 2024, a
6
modification shall be allowed for up to twenty thousand dollars ($20,000), and for tax years
7
beginning on or after January 1, 2025, a modification shall be allowed for up to fifty thousand
8
dollars ($50,000), of taxable pension and/or annuity income that is included in federal adjusted
9
gross income for the taxable year:
10
(A) For a person who has attained the age used for calculating full or unreduced Social
11
Security retirement benefits who files a return as an unmarried individual, head of household, or
12
married filing separate whose federal adjusted gross income for such taxable year is less than the
13
amount used for the modification contained in subsection (c)(8)(i)(A) of this section an amount not
14
to exceed $15,000 for tax years beginning on or after January 1, 2017, until the tax year beginning
15
January 1, 2022, and an amount not to exceed twenty thousand dollars ($20,000) for tax years
16
beginning on or after January 1, 2023, until the tax year beginning January 1, 2024, and an amount
17
not to exceed fifty thousand dollars ($50,000) for tax years beginning on or after January 1, 2025,
18
of taxable pension and/or annuity income includible in federal adjusted gross income; or
19
(B) For a married individual filing jointly or individual filing qualifying widow(er) who
20
has attained the age used for calculating full or unreduced Social Security retirement benefits whose
21
joint federal adjusted gross income for such taxable year is less than the amount used for the
22
modification contained in subsection (c)(8)(i)(B) of this section an amount not to exceed $15,000
23
for tax years beginning on or after January 1, 2017, until the tax year beginning January 1, 2022,
24
and an amount not to exceed twenty thousand dollars ($20,000) for tax years beginning on or after
25
January 1, 2023, until the tax year beginning January 1, 2024, and an amount not to exceed fifty
26
thousand dollars ($50,000) for tax years beginning on or after January 1, 2025, of taxable pension
27
and/or annuity income includible in federal adjusted gross income.
28
(ii) Adjustment for inflation. The dollar amount contained by reference in subsections
29
(c)(9)(i)(A) and (c)(9)(i)(B) of this section shall be increased annually for tax years beginning on
30
or after January 1, 2018, by an amount equal to:
31
(A) Such dollar amount contained by reference in subsections (c)(9)(i)(A) and (c)(9)(i)(B)
32
of this section adjusted for inflation using a base tax year of 2000, multiplied by;
33
(B) The cost-of-living adjustment with a base year of 2000.
34
(iii) For the purposes of this section, the cost-of-living adjustment for any calendar year is

LC006065 - Page 16 of 24
1
the percentage (if any) by which the consumer price index for the preceding calendar year exceeds
2
the consumer price index for the base year. The consumer price index for any calendar year is the
3
average of the consumer price index as of the close of the twelve-month (12) period ending on
4
August 31, of such calendar year.
5
(iv) For the purpose of this section, the term “consumer price index” means the last
6
consumer price index for all urban consumers published by the department of labor. For the purpose
7
of this section, the revision of the consumer price index which is most consistent with the consumer
8
price index for calendar year 1986 shall be used.
9
(v) If any increase determined under this section is not a multiple of fifty dollars ($50.00),
10
such increase shall be rounded to the next lower multiple of fifty dollars ($50.00). In the case of a
11
married individual filing a separate return, if any increase determined under this section is not a
12
multiple of twenty-five dollars ($25.00), such increase shall be rounded to the next lower multiple
13
of twenty-five dollars ($25.00).
14
(vi) For tax years beginning on or after January 1, 2022, the dollar amount contained by
15
reference in subsection (c)(9)(i)(A) shall be adjusted to equal the dollar amount contained in
16
subsection (c)(8)(i)(A), as adjusted for inflation, and the dollar amount contained by reference in
17
subsection(c)(9)(i)(B) shall be adjusted to equal the dollar amount contained in subsection
18
(c)(8)(i)(B), as adjusted for inflation;
19

(vii) For tax years beginning on or after January 1, 2027, a taxpayer may subtract from
20
federal gross income the taxpayer's state retirement system benefits included in federal adjusted
21
gross income;
22
(10)
Modification for Rhode Island investment in opportunity zones
. For purposes of
23
a taxpayer’s state tax liability, in the case of any investment in a Rhode Island opportunity zone by
24
the taxpayer for at least seven (7) years, a modification to income shall be allowed for the
25
incremental difference between the benefit allowed under 26 U.S.C. § 1400Z-2(b)(2)(B)(iv) and
26
the federal benefit allowed under 26 U.S.C. § 1400Z-2(c);
27
(11)
Modification for military service pensions.
28
(i) For purposes of a taxpayer’s state tax liability, a modification to income shall be allowed
29
as follows:
30
(A) For the tax years beginning on January 1, 2023, a taxpayer may subtract from federal
31
adjusted gross income the taxpayer’s military service pension benefits included in federal adjusted
32
gross income;
33
(ii) As used in this subsection, the term “military service” shall have the same meaning as
34
set forth in 20 C.F.R. § 212.2;

LC006065 - Page 17 of 24
1
(iii) At no time shall the modification allowed under this subsection alone or in conjunction
2
with subsection (c)(9) exceed the amount of the military service pension received in the tax year
3
for which the modification is claimed;
4
(12) Any rebate issued to the taxpayer pursuant to § 44-30-103 to the extent included in
5
gross income for federal tax purposes; and
6
(13) For tax years beginning on or after January 1, 2025, in the case of a taxpayer that is
7
licensed in accordance with chapters 28.6 and/or 28.11 of title 21, the amount equal to any
8
expenditure that is eligible to be claimed as a federal income tax deduction but is disallowed under
9
26 U.S.C. § 280E.
10
(d)
Modification for Rhode Island fiduciary adjustment.
There shall be added to, or
11
subtracted from, federal adjusted gross income (as the case may be) the taxpayer’s share, as
12
beneficiary of an estate or trust, of the Rhode Island fiduciary adjustment determined under § 44-
13
30-17.
14
(e)
Partners.
The amounts of modifications required to be made under this section by a
15
partner, which relate to items of income or deduction of a partnership, shall be determined under §
16
44-30-15.
17
SECTION 4. Section 45-21-52 of the General Laws in Chapter 45-21 entitled "Retirement
18
of Municipal Employees" is hereby amended to read as follows:
19

45-21-52. Automatic increase in service retirement allowance.
20
(a) The local legislative bodies of the cities and towns may extend to their respective
21
employees automatic adjustment increases in their service retirement allowances, by a resolution
22
accepting any of the plans described in this section:
23
(1)
Plan A.
All employees and beneficiaries of those employees receiving a service
24
retirement or disability retirement allowance under the provisions of this chapter on December 31
25
of the year their city or town accepts this section, receive a cost of living adjustment equal to one
26
and one-half percent (1.5%) per year of the original retirement allowance, not compounded, for
27
each calendar year the retirement allowance has been in effect. This cost of living adjustment is
28
added to the amount of the retirement allowance as of January 1 following acceptance of this
29
provision, and an additional one and one-half percent (1.5%) is added to the original retirement
30
allowance in each succeeding year during the month of January, and provided, further, that this
31
additional cost of living increase is three percent (3%) for the year beginning January 1 of the year
32
the plan is accepted and each succeeding year.
33
(2)
Plan B.
All employees and beneficiaries of those employees receiving a retirement
34
allowance under the provisions of this chapter on December 31 of the year their municipality

LC006065 - Page 18 of 24
1
accepts this section, receive a cost of living adjustment equal to three percent (3%) of their original
2
retirement allowance. This adjustment is added to the amount of the retirement allowance as of
3
January 1 following acceptance of this provision, and an additional three percent (3%) of the
4
original retirement allowance, not compounded, is payable in each succeeding year in the month
5
of January.
6
(3)
Plan C.
All employees and beneficiaries of those employees who retire on or after
7
January 1 of the year following acceptance of this section, on the first day of January next following
8
the date of the retirement, receive a cost of living adjustment in an amount equal to three percent
9
(3%) of the original retirement allowance.
10
(b) In each succeeding year in the month of January, the retirement allowance is increased
11
an additional three percent (3%) of the original retirement allowance, not compounded.
12
(c) This subsection (c) shall be effective for the period July 1, 2012, through June 30, 2015.
13
(1) Notwithstanding any other subsections of this section, and subject to subsection (c)(2)
14
below, for all present and former employees, active and retired members, and beneficiaries
15
receiving any retirement, disability or death allowance or benefit of any kind by reason of adoption
16
of this section by their employer, the annual benefit adjustment provided in any calendar year under
17
this section shall be equal to (A) multiplied by (B) where (A) is equal to the percentage determined
18
by subtracting five and one-half percent (5.5%) (the “subtrahend”) from the Five-Year Average
19
Investment Return of the retirement system determined as of the last day of the plan year preceding
20
the calendar year in which the adjustment is granted, said percentage not to exceed four percent
21
(4%) and not to be less than zero percent (0%), and (B) is equal to the lesser of the member’s
22
retirement allowance or the first twenty-five thousand dollars ($25,000) of retirement allowance,
23
such twenty-five thousand dollars ($25,000) amount to be indexed annually in the same percentage
24
as determined under (c)(1)(A) above. The “Five-Year Average Investment Return” shall mean the
25
average of the investment returns of the most recent five (5) plan years as determined by the
26
retirement board. Subject to subsection (c)(2) below, the benefit adjustment provided by this
27
subsection (c)(1) shall commence upon the third (3rd) anniversary of the date of retirement or the
28
date on which the retiree reaches their Social Security retirement age, whichever is later; or for
29
municipal police and fire retiring under the provisions of chapter 21.2 of this title, the benefit
30
adjustment provided by this subsection (c)(1) shall commence on the later of the third (3rd)
31
anniversary of the date of retirement or the date on which the retiree reaches age fifty-five (55). In
32
the event the retirement board adjusts the actuarially assumed rate of return for the system, either
33
upward or downward, the subtrahend shall be adjusted either upward or downward in the same
34
amount.

LC006065 - Page 19 of 24
1
(2) Except as provided in subsection (c)(3) the benefit adjustments provided under this
2
section for any plan year shall be reduced to twenty-five percent (25%) of the benefit adjustment
3
for each municipal plan within the municipal employees’ retirement system unless the municipal
4
plan is determined to be funded at a Funded Ratio equal to or greater than eighty percent (80%) as
5
of the end of the immediately preceding plan year in accordance with the retirement system’s
6
actuarial valuation report as prepared by the system’s actuary, in which event the benefit adjustment
7
will be reinstated for all members for such plan year.
8
In determining whether a funding level under this subsection (c)(2) has been achieved, the
9
actuary shall calculate the funding percentage after taking into account the reinstatement of any
10
current or future benefit adjustment provided under this section.
11
(3) Notwithstanding subsection (c)(2), for each municipal plan that has a Funded Ratio of
12
less than eighty percent (80%) as of June 30, 2012, in each fifth plan year commencing after June
13
30, 2012, commencing with the plan year ending June 30, 2017, and subsequently at intervals of
14
five (5) plan years, a benefit adjustment shall be calculated and made in accordance with subsection
15
(c)(1) above until the municipal plan’s Funded Ratio exceeds eighty percent (80%).
16
(d) This subsection (d) shall become effective July 1, 2015.
17
(1)(A) As soon as administratively reasonable following the enactment into law of this
18
subsection (d)(1)(A), a one-time benefit adjustment shall be provided to members and/or
19
beneficiaries of members who retired on or before June 30, 2012, in the amount of two percent
20
(2%) of the lesser of either the employee’s retirement allowance or the first twenty-five thousand
21
dollars ($25,000) of the member’s retirement allowance. This one-time benefit adjustment shall be
22
provided without regard to the retiree’s age or number of years since retirement.
23
(B) Notwithstanding the prior subsections of this section, for all present and former
24
employees, active and retired employees, and beneficiaries receiving any retirement, disability or
25
death allowance or benefit of any kind by reason of adoption of this section by their employer, the
26
annual benefit adjustment provided in any calendar year under this section for adjustments on and
27
after January 1, 2016, and subject to subsection (d)(2) below, shall be equal to (I) multiplied by
28
(II):
29
(I) shall equal the sum of fifty percent (50%) of (i) plus fifty percent (50%) of (ii) where:
30
(i) is equal to the percentage determined by subtracting five and one-half percent (5.5%)
31
(the “subtrahend”) from the five-year average investment return of the retirement system
32
determined as of the last day of the plan year preceding the calendar year in which the adjustment
33
is granted, said percentage not to exceed four percent (4%) and not to be less than zero percent
34
(0%). The “five-year average investment return” shall mean the average of the investment returns

LC006065 - Page 20 of 24
1
of the most recent five (5) plan years as determined by the retirement board. In the event the
2
retirement board adjusts the actuarially assumed rate of return for the system, either upward or
3
downward, the subtrahend shall be adjusted either upward or downward in the same amount.
4
(ii) is equal to the lesser of three percent (3%) or the percentage increase in the Consumer
5
Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor
6
Statistics determined as of September 30 of the prior calendar year.
7
In no event shall the sum of (i) plus (ii) exceed three and one-half percent (3.5%) or be less
8
than zero percent (0%).
9
(II) is equal to the lesser of either the member’s retirement allowance or the first twenty-
10
five thousand eight hundred and fifty-five dollars ($25,855) of retirement allowance, such amount
11
to be indexed annually in the same percentage as determined under (d)(1)(B)(I) above.
12
The benefit adjustments provided by this subsection (d)(1)(B) shall be provided to all
13
retirees entitled to receive a benefit adjustment as of June 30, 2012, under the law then in effect,
14
and for all other retirees the benefit adjustments shall commence upon the third anniversary of the
15
date of retirement or the date on which the retiree reaches their Social Security retirement age,
16
whichever is later; or for municipal police and fire retiring under the provisions of § 45-21.2-
17
5(b)(1)(A), the benefit adjustment provided by this subsection (d)(1)(B) shall commence on the
18
later of the third anniversary of the date of retirement or the date on which the retiree reaches age
19
fifty-five (55); or for municipal police and fire retiring under the provisions of § 45-21.2-5(b)(1)(B),
20
the benefit adjustment provided by this subsection (d)(1)(B) shall commence on the later of the
21
third anniversary of the date of retirement or the date on which the retiree reaches age fifty (50).
22
(2) Except for municipal employees and/or beneficiaries of municipal employees who
23
retired on or before June 30, 2012, the benefit adjustments under subsection (d)(1)(B) for any plan
24
year shall be reduced to twenty-five percent (25%) of the benefit adjustment for each municipal
25
plan within the municipal employees’ retirement system unless the municipal plan is determined to
26
be funded at a funded ratio equal to or greater than eighty percent (80%) as of the end of the
27
immediately preceding plan year in accordance with the retirement system’s actuarial valuation
28
report as prepared by the system’s actuary, in which event the benefit adjustment will be reinstated
29
for all members for such plan year. Effective July 1, 2024, the funded ratio for each municipal plan
30
within the municipal employees’ retirement system, calculated by the system’s actuary, of equal to
31
or greater than eighty percent (80%) for the benefit adjustment to be reinstated for all members for
32
such plan year shall be replaced with seventy-five percent (75%).
For plan year 2026, eligible
33
retirees who retired after July 1, 2012, shall receive a one-time full COLA of two and eighty-nine
34
one hundredths percent (2.89%).

LC006065 - Page 21 of 24
1
In determining whether a funding level under this subsection (d)(2) has been achieved, the
2
actuary shall calculate the funding percentage after taking into account the reinstatement of any
3
current or future benefit adjustment provided under this section.
4
(3) Effective for members and/or beneficiaries of members who retired after June 30, 2012,
5
or on or before June 30, 2015, the dollar amount in (d)(1)(B)(II) of twenty-five thousand eight
6
hundred and fifty-five dollars ($25,855) shall be replaced with thirty-one thousand and twenty-six
7
dollars ($31,026) until the municipal plan’s funded ratio exceeds eighty percent (80%). Effective
8
July 1, 2024, the funded ratio for each municipal plan within the municipal employees’ retirement
9
system, calculated by the system’s actuary, of exceeding eighty percent (80%) for the benefit
10
adjustment to be reinstated for all members for such plan year shall be replaced with seventy-five
11
percent (75%).
12
(e) Upon acceptance of any of the plans in this section, each employee shall on January 1
13
next succeeding the acceptance, contribute by means of salary deductions, pursuant to § 45-21-41,
14
one percent (1%) of the employee’s compensation concurrently with and in addition to
15
contributions otherwise being made to the retirement system.
16
(f) The city or town shall make any additional contributions to the system, pursuant to the
17
terms of § 45-21-42, for the payment of any benefits provided by this section.
18
(g) The East Greenwich town council shall be allowed to accept Plan C of subsection (a)(3)
19
of this section for all employees of the town of East Greenwich who either, pursuant to contract
20
negotiations, bargain for Plan C, or who are non-union employees who are provided with Plan C
21
and who shall all collectively be referred to as the “Municipal-COLA Group” and shall be separate
22
from all other employees of the town and school department, union or non-union, who are in the
23
same pension group but have not been granted Plan C benefits. Upon acceptance by the town
24
council, benefits in accordance with this section shall be available to all such employees who retire
25
on or after January 1, 2003.
26
(h) Effective for members and/or beneficiaries of members who have retired on or before
27
July 1, 2015, and without regard to whether the retired member or beneficiary is receiving a benefit
28
adjustment under this section, a one-time stipend of five hundred dollars ($500) shall be payable
29
within sixty (60) days following the enactment of the legislation implementing this provision, and
30
a second one-time stipend of five hundred dollars ($500) in the same month of the following year.
31
These stipends shall not be considered cost of living adjustments under the prior provisions of this
32
section.

LC006065 - Page 22 of 24
1
SECTION 5. This act shall take effect upon passage.
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LC006065 - Page 23 of 24
EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO EDUCATION -- TEACHERS' RETIREMENT
***
1
Effective for retirement plan year 2026, the act would provide that all teachers and state
2
employees who retired after July 1, 2012, their annual cost of living adjustment would be reinstated
3
and municipal employees would receive a one-time cost of living adjustment of two and eighty
4
nine one hundredths percent (2.89%). The act would also provide that public petition benefits from
5
the state retirement system would not be subject to the state personal income tax.
6
This act would take effect upon passage.
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LC006065
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LC006065 - Page 24 of 24