Senate Bill #563 (2019)

AN ACT RELATING TO PUBLIC OFFICERS AND EMPLOYEES -- RETIREMENT SYSTEM CONTRIBUTIONS AND BENEFITS

Requires that retirement contributions be deposited or remitted to the retirement system within three (3) days.

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Changes since original draft

  • 2019 – S 0563
  • 2019 – S 0563 SUBSTITUTE A
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  • LC001765
  • LC001765/SUB A
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  • S T A T E O F R H O D E I S L A N D
  • S T A T E O F R H O D E I S L A N D
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2019
  • ____________
  • A N A C T
  • RELATING TO PUBLIC OFFICERS AND EMPLOYEES – RETIREMENT SYSTEM
  • RELATING TO PUBLIC OFFICERS AND EMPLOYEES – RETIREMENT SYSTEM
  • CONTRIBUTIONS AND BENEFITS
  • Introduced By: Senators Pearson, Seveney, Murray, Paolino, and Cano
  • Date Introduced: March 14, 2019
  • Referred To: Senate Finance
  • (General Treasurer)
  • It is enacted by the General Assembly as follows:
  • SECTION 1. Sections 8-3-16 and 8-3-17 of the General Laws in Chapter 8-3 entitled "Justices of Supreme, Superior, and Family Courts" are hereby amended to read as follows:
  • 8-3-16. Retirement contribution.
  • (a) Judges engaged after December 31, 1989 shall have deducted from total salary beginning December 31, 1989 and ending June 30, 2012 an amount equal to a rate percent of compensation as specified in § 36-10-1 relating to member contributions to the state retirement system. Effective July 1, 2012, all active judges whether engaged before or after December 31, 1989 shall have deducted from compensation as defined in subsection 36-8-1(8) an amount equal to twelve percent (12%) of compensation, except active Supreme Court Judges as of June 30, 2012 who shall have deducted from compensation as defined in section 36-8-1(8) an amount equal to the percent of compensation in effect on June 30, 2012. Proceeds deposited shall be held in trust for the purpose of paying retirement benefits to participating judges or their beneficiaries on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld. The retirement board shall establish rules and regulations to govern the provisions of this section.
  • (b) The state is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • SECTION 1. Sections 8-3-16 and 8-3-17 of the General Laws in Chapter 8-3 entitled "Justices of Supreme, Superior, and Family Courts" are hereby amended to read as follows:
  • 8-3-16. Retirement contribution.
  • (a) Judges engaged after December 31, 1989 shall have deducted from total salary beginning December 31, 1989 and ending June 30, 2012 an amount equal to a rate percent of compensation as specified in § 36-10-1 relating to member contributions to the state retirement system. Effective July 1, 2012, all active judges whether engaged before or after December 31, 1989 shall have deducted from compensation as defined in subsection 36-8-1(8) an amount equal to twelve percent (12%) of compensation, except active Supreme Court Judges as of June 30, 2012 who shall have deducted from compensation as defined in section 36-8-1(8) an amount equal to the percent of compensation in effect on June 30, 2012. Proceeds deposited shall be held in trust for the purpose of paying retirement benefits to participating judges or their beneficiaries on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld. The retirement board shall establish rules and regulations to govern the provisions of this section.
  • (b) The state is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • (b)(c) A member of the judiciary who withdraws from service or ceases to be a member for any reason other than retirement, shall be paid on demand a refund consisting of the accumulated contributions standing to his or her credit in his or her individual account in the judicial retirement benefits account. Any member receiving a refund shall thereby forfeit and relinquish all accrued rights as a member of the system together with credits for total service previously granted to the member; provided, however, that if any member who has received a refund shall subsequently reenter the service and again become a member of the system, he or she shall have the privilege of restoring all money previously received or disbursed to his or her credit as refund of contributions plus regular interest for the period from the date of refund to the date of restoration. Upon the repayment of the refund as herein provided, the member shall again receive credit for the amount of total service which he or she had previously forfeited by the acceptance of the refund.
  • (c)(d) Whenever any judge dies from any cause before retirement and has no surviving spouse, domestic partner or minor child(ren), a payment shall be made of the accumulated contributions standing to his or her credit in his or her individual account in the judicial retirement benefits account. The payment of the accumulated contributions of the judge shall be made to such person as the judge shall have nominated by written designation duly executed and filed with the retirement board, or if the judge has filed no nomination, or if the person so nominated has died, then to the estate of the deceased judge.
  • 8-3-17. State contributions.
  • The state of Rhode Island shall make its contribution for the maintaining of the system established by § 8-3-16 and providing the annuities, benefits, and retirement allowances in accordance with the provisions of this chapter by annually appropriating an amount which will pay a rate percent of the compensation paid after December 31, 1989 to judges engaged after December 31, 1989. Such rate percent shall be computed and certified in accordance with the procedures set forth in §§ 36-8-13 and 36-10-2 under rules and regulations promulgated by the retirement board pursuant to § 36-8-3. The amounts that would have been contributed shall be deposited in a special fund and not used for any purpose on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld.
  • SECTION 2. Sections 8-8-10.1 and 8-8-10.2 of the General Laws in Chapter 8-8 entitled "District Court" are hereby amended to read as follows:
  • 8-8-10.1. Retirement contribution.
  • (a) Judges engaged after December 31, 1989 shall have deducted from total salary beginning December 31, 1989 and ending June 30, 2012 an amount equal to a rate percent of compensation as specified in § 36-10-1 relating to member contributions to the state retirement system. Effective July 1, 2012, all active judges whether engaged before or after December 31,1989 shall have deducted from compensation as defined in subsection 36-8-1(8) an amount equal to twelve percent (12%) of compensation. The receipts collected under this provision shall be deposited in a restricted revenue account entitled "Judicial retirement benefits" " on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld. Proceeds deposited in this account shall be held in trust for the purpose of paying retirement benefits to participating judges or their beneficiaries. The retirement board shall establish rules and regulations to govern the provisions of this section.
  • (b) The state is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • (b)(c) A member of the judiciary who withdraws from service or ceases to be a member for any reason other than retirement shall be paid on demand a refund consisting of the accumulated contributions standing to his or her credit in his or her individual account in the judicial retirement benefits account. Any member receiving a refund shall thereby forfeit and relinquish all accrued rights as a member of the system together with credits for total service previously granted to the member; provided, however, that if any member who has received a refund shall subsequently reenter the service and again become a member of the system, the member shall have the privilege of restoring all money previously received or disbursed to his or her credit as refund of contributions plus regular interest for the period from the date of refund to the date of restoration. Upon the repayment of the refund as herein provided, the member shall again receive credit for the amount of total service which he or she had previously forfeited by the acceptance of the refund.
  • (c)(d) Whenever any judge dies from any cause before retirement and has no surviving spouse, domestic partner or minor child(ren), a payment shall be made of the accumulated contributions standing to his or her credit in his or her individual account in the judicial retirement benefits account. The payment of the accumulated contributions of the judge shall be made to such person as the judge shall have nominated by written designation duly executed and filed with the retirement board, or if the judge has filed no nomination, or if the person so nominated has died, then to the estate of the deceased judge.
  • 8-8-10.2. State contributions.
  • The state of Rhode Island shall make its contribution for the maintaining of the system established by § 8-8-10.1 and providing the annuities, benefits, and retirement allowances in accordance with the provisions of this chapter by annually appropriating an amount which will pay a rate percent of the compensation paid after December 31, 1989 to judges engaged after December 31, 1989. The rate percent shall be computed and certified in accordance with the procedures set forth in § 36-8-13 and § 36-10-2 under rules and regulations promulgated by the retirement board pursuant to § 36-8-3 and shall be transmitted on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld.
  • SECTION 3. Sections 8-8.2-7 and 8-8.2-8 of the General Laws in Chapter 8-8.2 entitled "Traffic tribunal" are hereby amended to read as follows:
  • 8-8.2-7. Retirement contribution.
  • (a) Judges of the administrative adjudication court engaged after December 31, 1989 who are reassigned by this chapter to the traffic tribunal shall have deducted from their total salary beginning December 31, 1989 and ending June 30, 2012, an amount equal to a rate percent of compensation as specified in § 36-10-1 relating to member contributions to the state retirement system. Effective July 1, 2012, all active judges whether engaged before or after December 31,1989 shall have deducted from compensation as defined in 36-8-1(8) an amount equal to twelve percent (12%) of compensation. The receipts collected under this provision shall be deposited in a restricted revenue account entitled "administrative adjudication retirement benefits" on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld. Proceeds deposited in this account shall be used to pay judges' retirement costs. The retirement board shall establish rules and regulations to govern the provisions of this section.
  • (b) The state is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • (b)(c) A judge of the administrative adjudication court reassigned by this chapter to the traffic tribunal who withdraws from service or ceases to be a member for any reason other than death or retirement, shall be paid on demand a refund consisting of the accumulated contributions standing to his or her credit in his or her individual account in the administrative adjudication retirement benefits account. Any member receiving a refund shall thereby forfeit and relinquish all accrued right as a member of the system together with credits for total service previously granted to the member; provided, however, that if any member who has received a refund shall subsequently reenter the service and again become a member of the system, he or she shall have the privilege of restoring all moneys previously received or disbursed to his or her credit as a refund of contributions plus regular interest for the period from the date of refund to the date of restoration. Upon the repayment of the refund as herein provided, such member shall again receive credit for the amount of total service which he or she had previously forfeited by the acceptance of the refund.
  • (c)(d) Whenever any judge of the administrative adjudication court dies from any cause before retirement and has no surviving spouse or domestic partner or minor child(ren), a payment shall be made of the accumulated contributions standing to his or her credit in his or her individual account in the administrative adjudication court judges' retirement account. The payment of the accumulated contributions of the judge shall be made to such person as the judge shall have nominated by written designation duly executed and filed with the retirement board, or if the judge has no filed nomination, or if the person so nominated has died, then to the estate of the deceased judge.
  • 8-8.2-8. State contributions.
  • The state of Rhode Island shall make its contribution for maintaining the system established by § 8-8.2-7 and providing the annuities, benefits, and retirement allowances in accordance with the provisions of this chapter, by annually appropriating an amount which will pay a rate percent of the compensation paid after December 31, 1989 to judges of the administrative adjudication court engaged after December 31, 1989 who are reassigned by this chapter to the traffic tribunal. The rate percent shall be computed and certified in accordance with the procedures set forth in § 36-8-13 and § 36-10-2 under rules and regulations promulgated by the retirement board pursuant to § 36-8-3 and shall be transmitted on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld.
  • SECTION 4. Sections 16-16-22 and 16-16-22.1 of the General Laws in Chapter 16-16 entitled "Teachers' Retirement [See Title 16 Chapter 97 - The Rhode Island Board of Education Act]" are hereby amended to read as follows:
  • 16-16-22. Contributions to state system.
  • (a) Prior to July 1, 2012, each teacher shall contribute into the system nine and one-half percent (9.5%) of compensation as his or her share of the cost of annuities, benefits, and allowances. Effective July 1, 2012, each teacher shall contribute an amount equal to three and three quarters percent (3.75%) of his or her compensation. Effective July 1, 2015, each teacher with twenty (20) or more years of total service as of June 30, 2012, shall contribute an amount equal to eleven percent (11%) of his or her compensation. The employer contribution on behalf of teacher members of the system shall be in an amount that will pay a rate percent of the compensation paid to the members, according to the method of financing prescribed in the State Retirement Act in chapters 8 – 10 and 10.3 of title 36. This amount shall be paid forty percent (40%) by the state, and sixty percent (60%) by the city, town, local educational agency, or any formalized commissioner approved cooperative service arrangement by whom the teacher members are employed, with the exception of teachers who work in federally funded projects and further with the exception of any supplemental contributions by a local municipality employer under chapter 36-10.3 which supplemental employer contributions shall be made wholly by the local municipality. Provided, however, that the rate percent paid shall be rounded to the nearest hundredth of one percent (.01%).
  • (b) The employer contribution on behalf of teacher members of the system who work in fully or partially federally funded programs shall be prorated in accordance with the share of the contribution paid from the funds of the federal, city, town, or local educational agency, or any formalized commissioner approved cooperative service arrangement by whom the teacher members are approved.
  • (c) In case of the failure of any city, town, or local educational agency, or any formalized commissioner approved cooperative service arrangement to pay to the state retirement system the amounts due from it under this section within the time prescribed, the general treasurer is authorized to deduct the amount from any money due the city, town, or local educational agency from the state.
  • (d) The employer's contribution shared by the state shall be paid in the amounts prescribed in this section for the city, town, or local educational agency and under the same payment schedule. Notwithstanding any other provisions of this chapter, the city, town, or local educational agency or any formalized commissioner approved cooperative service arrangement shall remit to the general treasurer of the state the local employer's share of the teacher's retirement payments on a monthly basis, payable by the fifteenth (15th) of the following month on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld. The amounts that would have been contributed shall be deposited by the state in a special fund and not used for any purpose. The general treasurer, upon receipt of the local employer's share, shall effect transfer of a matching amount of money from the state funds appropriated for this purpose by the general assembly into the retirement fund.
  • Upon reconciliation of the final amount owed to the retirement fund for the employer share, the state shall ensure that any local education aid reduction assumed for the FY 2010 revised budget in excess of the actual savings is restored to the respective local entities.
  • (e) This section is not subject to §§ 45-13-7 through 45-13-10.
  • 16-16-22.1. City or town payment of teacher member contributions.
  • (a) Each city or town, pursuant to the provisions of § 414(h)(2) of the United States Internal Revenue Code, 26 U.S.C. § 414(h)(2), may, pursuant to appropriate local action by the city or town, pick up and pay the contributions which would be payable by the employees as teacher members under § 16-16-22. The contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code. Employee contributions picked up pursuant to this section shall be treated and identified as teacher member contributions for all purposes of the retirement system except as specifically provided to the contrary in this section.
  • (b) Teacher member contributions picked up by a city or town shall be paid from the same source of funds used for the payment of compensation to a teacher member. A deduction shall be made from a teacher member's compensation equal to the amount of his or her contributions picked up by his or her city or town employer. This deduction, however, shall not reduce his or her compensation for purposes of computing benefits under the retirement system pursuant to this chapter or chapter 10 of title 36. Picked up contributions shall be transmitted to the retirement system in accordance with the provisions of § 16-16-22 and § 36-10-1 on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld.
  • (c) Every employer is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • (d) The liability of an employer who fails to segregate such trust funds, or refuses to deduct and withhold member contributions from its employees, is enforceable by the retirement board through an appropriate action in the superior court. The general treasurer is also authorized to deduct the amount due from any money due the employer from the state.
  • SECTION 5. Sections 28-30-18.1 and 28-30-18.2 of the General Laws in Chapter 28-30 entitled "Workers' Compensation Court" are hereby amended to read as follows:
  • 28-30-18.1. Retirement contribution.
  • (a) Workers' compensation judges engaged after December 31, 1989, shall have deducted from total salary beginning December 31, 1989 and ending on June 30, 2012, an amount equal to a rate percent of compensation as specified in § 36-10-1 relating to member contributions to the state retirement system. Effective July 1, 2012, all active workers' compensation judges whether engaged before or after December 31, 1989, shall have deducted from compensation as defined in § 36-8-1(8) an amount equal to twelve percent (12%) of compensation. The receipts collected under this provision shall be deposited in a restricted revenue account entitled "workers' compensation judges' retirement benefits" on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld. Proceeds deposited in this account shall be held in trust for the purpose of paying retirement benefits to participating judges or their beneficiaries. The retirement board shall establish rules and regulations to govern the provisions of this section.
  • (b) The state is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • (b)(c) A judge of the court who withdraws from service or ceases to be a judge for any reason other than retirement shall be paid on demand a refund consisting of the accumulated contributions standing to his or her credit in his or her individual account in the workers' compensation judges' retirement benefits account. Any judge receiving a refund shall forfeit and relinquish all accrued rights as a member of the system together with credits for total service previously granted to the judge; provided, that if any judge who has received a refund subsequently reenters the service and again becomes a member of the system, he or she shall have the privilege of restoring all money previously received or disbursed to his or her credit as refund of contributions, together with regular interest for the time period from the date of refund to the date of restoration. Upon the repayment of the refund, the judge shall again receive credit for the amount of total service that he or she had previously forfeited by the acceptance of the refund.
  • (c)(d) Whenever any judge of the workers' compensation court dies from any cause before retirement and has no surviving spouse, domestic partner or minor child(ren), a payment shall be made of the accumulated contributions standing to his or her credit in his or her individual account in the workers' compensation judges' retirement account. The payment of the accumulated contributions of the judge shall be made to such person as the judge shall have nominated by written designation duly executed and filed with the retirement board, or if the judge has filed no nomination, or if the person so nominated has died, then to the estate of the deceased judge.
  • 28-30-18.2. State contributions.
  • The state of Rhode Island shall make its contribution for the maintaining of the system established by § 28-30-18.1 and providing the annuities, benefits, and retirement allowances in accordance with the provisions of this chapter by annually appropriating an amount which will pay a rate percent of the compensation paid after December 31, 1989, to judges engaged after December 31, 1989. The rate percent shall be computed and certified in accordance with the procedures set forth in §§ 36-8-13 and 36-10-2 under rules and regulations promulgated by the retirement board pursuant to § 36-8-3 and shall be transmitted on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld.
  • SECTION 6. Sections 36-10-1.1 and 36-10-2 of the General Laws in Chapter 36-10 entitled "Retirement System - Contributions and Benefits" are hereby amended to read as follows:
  • 36-10-1.1. Department payment of member contributions.
  • (a) Each department, pursuant to the provisions of § 414(h)(2) of the United States Internal Revenue Code, 26 U.S.C. § 414(h)(2), shall pick up and pay the contributions which would be payable by the employees as members under §§ 36-10-1, 8-3-16, 8-8-10.1, 8-8.2-7, 28- 30-18.1, and 42-28-22.1. The contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code; and shall not be included as gross income of the employee until such time as they are distributed. Employee contributions which are picked up pursuant to this section shall be treated and identified as member contributions for all purposes of the retirement system except as specifically provided to the contrary in this section.
  • (b) Member contributions picked up by a department shall be paid from the same source of funds used for the payment of compensation to a member. A deduction shall be made from a member's compensation equal to the amount of his or her contributions picked up by his or her departmental employer. This deduction, however, shall not reduce his or her compensation for purposes of computing benefits under the applicable retirement system. Picked up contributions shall be transmitted to the retirement system in accordance with the provisions of § 36-10-1, on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld.
  • (c) The state is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • 36-10-2. State contributions.
  • (a) The State of Rhode Island shall make its contribution for the maintenance of the system, including the proper and timely payment of benefits in accordance with the provisions of this chapter and chapters 8, 16, 28, 31 and 42 of this title, by annually appropriating an amount equal to a percentage of the total compensation paid to the active membership. The percentage shall be computed by the actuary employed by the retirement system and shall be certified by the retirement board to the director of administration on or before the fifteenth day of October in each year. In arriving at the yearly employer contribution the actuary shall determine the value of:
  • (1) The contributions made by the members;
  • (2) Income on investments; and
  • (3) Other income of the system.
  • (b) The Actuary shall thereupon compute the yearly employer contribution that will:
  • (1) Pay the actuarial estimate of the normal cost for the next succeeding fiscal year;
  • (2) Amortize the unfunded liability of the system in accordance with section 36-10- 2.1(b).
  • (c) The State of Rhode Island shall remit to the general treasurer the employer's share of the contribution for state employees, state police, and judges on a payroll frequency basis, on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld, and for teachers in a manner pursuant to § 16-16- 22.
  • (d)(1) In accordance with the intent of § 36-8-20 that the retirement system satisfy the requirements of § 401(a) of the Internal Revenue Code of 1986, the state shall pay to the retirement system:
  • (i) By June 30, 1995, an amount equal to the sum of the benefits paid to state legislators pursuant to § 36-10-10.1 in excess of ten thousand dollars ($10,000) per member (plus accrued interest on such amount at eight percent (8%)) for all fiscal years beginning July 1, 1991, and ending June 30, 1995, but this amount shall be paid only if § 36-10-10.1(e) becomes effective January 1, 1995; and
  • (ii) By December 31, 1994, twenty million seven hundred eighty eight thousand eight hundred twelve dollars and nineteen cents ($20,788,812.19) plus accrued interest on that amount at eight percent (8%) compounded monthly beginning March 1, 1991, and ending on the date this payment is completed (reduced by amortized amounts already repaid to the retirement system with respect to the amounts withdrawn by the state during the fiscal year July 1, 1990 – June 30, 1991); and
  • (iii) By June 30, 1995, the sum of the amounts paid by the retirement system for retiree health benefits described in § 36-12-4 for all fiscal years beginning July 1, 1989, and ending June 30, 1994, to the extent that the amounts were not paid from the restricted fund described in subsection (c).
  • (2) Any and all amounts paid to the retirement system under this subsection shall not increase the amount otherwise payable to the system by the state of Rhode Island under subsection (a) for the applicable fiscal year. The actuary shall make such adjustments in the amortization bases and other accounts of the retirement system as he or she deems appropriate to carry out the provisions and intent of this subsection.
  • (e) In addition to the contributions provided for in subsection (a) through (c) and in order to provide supplemental employer contributions to the retirement system, commencing in fiscal year 2006, and each year thereafter:
  • (1) Except for fiscal year 2009, fiscal year 2010 and fiscal year 2011, for each fiscal year in which the actuarially determined state contribution rate for state employees, including state contributions under chapter 36-10.3, is lower than that for the prior fiscal year, the governor shall include an appropriation to that system equivalent to twenty percent (20%) of the rate reduction for the state's contribution rate for state employees to be applied to the actuarial accrued liability of the state employees' retirement system for state employees for each fiscal year;
  • (2) Except for fiscal year 2009, fiscal year 2010 and fiscal year 2011, for each fiscal year in which the actuarially determined state contribution rate for teachers, including state contributions under chapter 36-10.3, is lower than that for the prior fiscal year, the governor shall include an appropriation to that system equivalent to twenty percent (20%) of the rate reduction for the state's share of the contribution rate for teachers to be applied to the actuarial accrued liability of the state employees' retirement system for teachers for each fiscal year;
  • (3) The amounts to be appropriated shall be included in the annual appropriation bill and shall be paid by the general treasurer into the retirement system.
  • (4) Assessments pursuant to § 42-149-3.1 shall be included in the annual appropriation bill and shall be paid by the general treasurer into the retirement system beginning FY2013.
  • (f) While the retirement system's actuary shall not adjust the computation of the annual required contribution for the year in which supplemental contributions are received, such contributions once made may be treated as reducing the actuarial liability remaining for amortization in the next following actuarial valuation to be performed.
  • SECTION 7. Sections 36-10.3-4, 36-10.3-5 and 36-10.3-6 of the General Laws in Chapter 36-10.3 entitled "Defined Contribution Retirement Plan" are hereby amended to read as follows:
  • 36-10.3-4. Member contributions.
  • (1) Each regular member shall contribute to the member's individual account in the plan an amount equal to five percent (5%) of the member's compensation from July 1 to the following June 30.
  • (2) Each public safety member not participating in Social Security under the Federal Old Age, Survivors and Disability Income program, shall contribute to the member's individual account an amount equal to three percent (3%) of the member's compensation from July 1 to the following June 30.
  • (3) Contributions by supplemental members shall be governed by § 36-10.3-6.
  • (4) The employer shall deduct the contribution from the member's compensation at the end of each payroll period, and shall remit such contributions on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld, and the contribution shall be credited by the plan to the member's individual account. The contributions shall be deducted from the member's compensation before the computation of applicable federal taxes and shall be treated as employer contributions under 26 U.S.C. § 414(h)(2). A member shall not have the option of making the payroll deduction directly in cash instead of having the contribution picked up by the employer.
  • (5) Contributions of employees shall be made by payroll deductions. Every member shall be considered to consent to payroll deductions. It is of no consequence that a payroll deduction may cause the compensation paid in cash to an employee to be reduced below the minimum required by law. Payment of an employee's compensation, less payroll deductions, is a full and complete discharge and satisfaction of all claims and demands by the employee relating to remuneration of services during the period covered by the payment, except with respect to the benefits provided under the plan.
  • (6) Additional voluntary member contributions may be permitted in accordance with this section in such manner as determined in the discretion of the commission.
  • (7) Every employer is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • 36-10.3-5. Employer contributions.
  • (1) An employer shall contribute to each regular member's individual account the following amounts on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld:
  • (i) For members with fewer than ten (10) years of total service as of June 30, 2012, an amount equal to one percent (1%) of the member's compensation at the end of each payroll period from July 1 to the following June 30;
  • (ii) For members with ten (10) or more, but fewer than fifteen (15) years of total service as of June 30, 2012, an amount equal to one percent (1%) of the member's compensation at the end of each payroll period from July 1, 2012 through June 30, 2015, and effective July 1, 2015, an amount equal to one and one-quarter percent (1.25%) of the member's compensation at the end of each payroll period; and
  • (iii) For members with fifteen (15) or more, but fewer than twenty (20) years of total service as of June 30, 2012, an amount equal to one percent (1%) of the member's compensation at the end of each payroll period from July 1, 2012 through June 30, 2015, and effective July 1, 2015, an amount equal to one and one-half percent (1.5%) of the member's compensation at the end of each payroll period from July 1 to the following June 30.
  • (2) An employer shall contribute to the individual account of each public safety member, not participating in Social Security under the Federal Old Age, Survivors and Disability Income program, an amount equal to three percent (3%) of the member's compensation from July 1 to the following June 30.
  • (3) Contributions by supplemental employers shall be governed by § 36-10.3-6.
  • 36-10.3-6. Supplemental employer and member contributions.
  • (a) A supplemental member shall contribute to the member's individual account an amount equal to two percent (2%) of the member's compensation from July 1 to the following June 30 in addition to the requirements of § 36-10.3-4. For such members, a supplemental employer shall contribute to the member's individual account an amount equal to two percent (2%) of the member's compensation from July 1 to the following June 30 in addition to the requirements of § 36-10.3-5.
  • (b) A supplemental employer may request a different level of supplemental member contributions and supplemental employer contributions subject to the approval of the state investment commission.
  • (c) Such contributions shall be transmitted on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld and every employer is required to deduct and withhold member supplemental contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • SECTION 8. Sections 42-28-22.1 and 42-28-22.2 of the General Laws in Chapter 42-28 entitled "State Police" are hereby amended to read as follows:
  • 42-28-22.1. Retirement contribution.
  • (a) Legislative findings. The general assembly finds that:
  • (1) A trust was created for retirement purposes for members of the state police who were hired after July 1, 1987; however, as of January 1, 2015, there was an unfunded liability of approximately $200 million attributable to the retirement benefits for members of the state police hired on or before July 1, 1987, and no trust had been created for them.
  • (2) Unless a trust is established, these members' benefits will continue to be funded on a pay-as-you-go basis and would not be recognized as a liability on the state's financial statements under generally accepted accounting purposes.
  • (3) An investigation of Google, Inc., conducted by the Rhode Island U.S. attorney's office and the Rhode Island task force of the U.S. food and drug administration's office of criminal investigations, the department of the attorney general, and state and local police netted settlement amounts of approximately $230 million to the state, of which $45.0 million has been allocated for use by the state police.
  • (4) The allocation of Google settlement monies to the state police presents a unique opportunity to reduce the amount of the unfunded liability attributable to the retirement benefits for members of the state police hired on or before July 1, 1987.
  • (5) It is in the best interests of the members of the state police and the taxpayers of this state to reduce the amount of the unfunded liability attributable to retirement benefits for these police officers by creating a separate trust and to fund those benefits on an actuarial basis.
  • (b) Each member of the state police initially hired after July 1, 1987 shall have deducted from "compensation" as defined in § 36-8-1(8) beginning July 1, 1989, an amount equal to a rate percent of such compensation of eight and three quarters percent (8.75%). The receipts collected from members of the state police shall be deposited in a restricted revenue account entitled "state police retirement benefits" on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld. The proceeds deposited in this account shall be held in trust for the purpose of paying retirement benefits under this section to participating members of the state police or their beneficiaries. The retirement board shall establish rules and regulations to govern the provisions of this section.
  • (c) The state is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • (c)(d) A member of the state police initially hired after July 1, 1987 who withdraws from service or ceases to be a member for any reason other than death or retirement, will, at the member's request, be paid on demand a refund consisting of the accumulated contributions standing to his or her credit in his or her individual account in the state police retirement benefits account. Any member receiving a refund shall thereby forfeit and relinquish all accrued rights as a member of the system together with credits for total service previously granted to the member; provided, however, that if any member who has received a refund shall subsequently reenter the service and again become a member of the system, he or she shall have the privilege of restoring all moneys previously received or disbursed to his or her credit as refund of contributions, plus regular interest for the period from the date of refund to the date of restoration.
  • (d)(e) Upon the repayment of the refund provided in subsection (c) above, the member shall again receive credit for the amount of total service which he or she had previously forfeited by the acceptance of the refund.
  • (f) The state shall deposit contributions for members of the state police initially hired on or before July 1, 1987, from time to time (as provided in § 42-28-22.2) to be held in trust. The proceeds of this trust shall pay retirement benefits under this section to participating members of the state police or their beneficiaries. The retirement board shall establish rules and regulations to govern the provisions of this section.
  • 42-28-22.2. State contributions.
  • The state of Rhode Island shall make its contribution for the maintaining of the system established by § 42-28-22.1 and providing the annuities, benefits, and retirement allowances in accordance with the provisions of this chapter by (a) annually appropriating an amount which will pay a rate percent of the compensation paid after July 1, 1989 to members of the state police hired after July 1, 1987 and (b) appropriating an amount which will amortize the unfunded liability associated with the benefits payable to members of the state police hired on or before July 1, 1987. The dollar amount specified in subsection (b) above shall be computed on an actuarial basis using an eighteen (18) year amortization schedule commencing on July 1, 2015, taking into account an initial supplemental contribution from the state, and certified in accordance with the procedures set forth in §§ 36-8-13 and 36-10-2 under rules and regulations promulgated by the retirement board pursuant to § 36-8-3. Such contributions shall be transmitted on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld.
  • SECTION 9. Sections 45-21-41.1 and 45-21-42 of the General Laws in Chapter 45-21 entitled "Retirement of Municipal Employees" are hereby amended to read as follows:
  • 45-21-41.1. Municipality payment of member contributions.
  • (a) Each municipality, pursuant to the provisions of 26 U.S.C. § 414(h)(2) of the United States Internal Revenue Code, may, pursuant to appropriate legal action by the municipality, pick up and pay the contributions which would be payable by the employees as members under § 45- 21-41. The contributions so picked up shall be treated as employer contributions in determining tax treatment under the United States Internal Revenue Code; however, each municipality shall continue to withhold federal and state income taxes based upon these contributions until the Internal Revenue Service rules that pursuant to 26 U.S.C. § 414(h)(2) of the United States Internal Revenue Code, these contributions shall not be included as gross income of the employee until the time they are distributed. Employee contributions which are picked up pursuant to this section shall be treated and identified as member contributions for all purposes of the retirement system except as specifically provided to the contrary in this section.
  • (b) Member contributions picked up by a municipality shall be paid from the same source of funds used for the payment of compensation to a member. A deduction shall be made from a member's compensation equal to the amount of the employee's contributions picked up by the employee's municipal employer. This deduction, however, shall not reduce the employee's compensation for purposes of computing benefits under the retirement system pursuant to this chapter. Picked up contributions shall be submitted to the retirement system in accordance with the provisions of § 45-21-41 on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld.
  • (c) Every employer is required to deduct and withhold member contributions and to transmit same to the retirement system and is hereby made liable for the contribution. In addition, any amount of employee contributions actually deducted and withheld shall be deemed to be a special fund in trust for the benefit of the member and shall be transmitted to the retirement system as set forth herein.
  • (d) The liability of an employer who fails to segregate such trust funds, or refuses to deduct and withhold member contributions from its employees, is enforceable by the retirement board through an appropriate action in the superior court. The general treasurer is also authorized to deduct the amount due from any money due the employer from the state.
  • 45-21-42. Contributions by municipalities.
  • (a) Each municipality shall make contributions to the system to provide for the remainder of the obligation for retirement allowances, annuities, and other benefits provided in this chapter, after applying the accumulated contributions of the members, interest income on investments of the system, and other income accruing to the system. These contributions shall, in any event, be sufficient to establish and maintain a reserve equal to the sum of:
  • (1) The full credits for accumulated contributions in the "members' contribution reserve" described in § 45-21-43,
  • (2) The present value, determined in accordance with the actuarial tables in use by the system, of the retirement allowances, disability allowances, accidental death benefits, and other benefits in force, chargeable to the "retirement reserve" described in § 45-21-43, and
  • (3) The present value of deferred annuities to members who have acquired a vested right under the provisions of § 45-21-18.
  • (b) The rate of contribution on the part of each municipality, to meet its obligations under this chapter, is the rate certified by the retirement board at the date of participation of the municipality. The rate is redetermined at least once every five (5) years and certified by the retirement board, upon recommendation of the actuary, following an evaluation and analysis of the operating experience of the system and of the assets, liabilities, and reserves of the system. Nothing contained in this chapter is deemed to impose any obligation upon any municipality for service which may have been rendered by an employee of one municipality in behalf of another municipality.
  • (c) In case of failure of any city or town to pay to the state the amounts due from it under this title within the time prescribed, the general treasurer is hereby authorized to deduct that amount from any moneys due the city or town from the state for any purpose other than for education.
  • (d) Notwithstanding any other provisions of the general laws, the payment of the contributions for the employers' share shall be remitted to the retirement board on a monthly basis, payable by the 15th of the following month on the date contributions are withheld but no later than three (3) business days following the pay period ending in which contributions were withheld.
  • (e) This section is not subject to §§ 45-13-7 – 45-13-10, as amended.
  • SECTION 10. This act shall take effect on January 1, 2020. ======== LC001765 ========
  • SECTION 10. This act shall take effect on July 1, 2020. ======== LC001765/SUB A ========
  • EXPLANATION
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T
  • RELATING TO PUBLIC OFFICERS AND EMPLOYEES – RETIREMENT SYSTEM
  • CONTRIBUTIONS AND BENEFITS
  • ***
  • This act would require that retirement contributions of judges, teachers, state employees and municipal employees be deposited in the designated account or remitted to the retirement system not later than three (3) business days after the contributions are withheld.
  • This act would take effect on January 1, 2020. ======== LC001765 ========
  • This act would take effect on July 1, 2020. ======== LC001765/SUB A ========

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