Senate Bill #991 (2019)

AN ACT RELATING TO TOWNS AND CITIES - RETIREMENT OF MUNICIPAL EMPLOYEES AND CLOSED MUNICIPAL RETIREMENT PLANS

Facilitates locally administered Central Falls retirement plans joining employees retirement system of the state by providing greater flexibility in funding policies than would otherwise be required, depending upon the needs of the community.

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  • 2019 – S 0991
  • 2019 – S 0991 SUBSTITUTE A
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  • LC002870
  • LC002870/SUB A
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  • S TATE OF RHODE IS L AND
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2019
  • ____________
  • A N A C T
  • RELATINGTO TOWNSAND CITIES- RETIREMENT OFMUNICIPALEMPLOYEESAND
  • RELATINGTO TOWNSAND CITIES- RETIREMENTOFMUNICIPALEMPLOYEESAND
  • CLOSED MUNICIPAL RETIREMENT PLANS
  • Introduced By: Senator Elizabeth A. Crowley
  • Date Introduced: June 19, 2019
  • Referred To: Senate Finance
  • It is enacted by the GeneralAssembly as follows:
  • SECTION 1. Sections 45-21-8 and 45-21-16.2 of the General Laws in Chapter 45-21 entitled "Retirement of Municipal Employees" are hereby amended to read as follows:
  • 45-21-8. Membership in system.
  • Membership in the retirement system does not begin before the effective date of participation in the system as provided in §§§ 45-21-4, 45-21.4-2 or 45-21.4-3 and consists of the following:
  • (a) Any employee of a participating municipality as defined in this chapter, who becomes an employee on and after the effective date of participation, shall, under contract of his or her employment, become a member of the retirement system; provided, that the employee is not receiving any pension or retirement allowance from any other pension or retirement system supported wholly or in part by a participating municipality, and is not a contributor to any other pension or retirement system of a participating municipality. Any employee who is elected to an office in the service of a municipality after the effective date and prior to July 1, 2012, has the option of becoming a member of the system, which option must be exercised within sixty (60) days following the date the employee assumes the duties of his or her office, otherwise that person is not entitled to participate under the provisions of this section;
  • (b) Any employee or elected official of a participating municipality in service prior to the effective date of participation, who is not a member of any other pension or retirement system supported wholly or in part by a participating municipality, and who does not notify the retirement board in writing before the expiration of sixty (60) days from the effective date of participation that he or she does not wish to join the system, shall automatically become a member; and
  • (c) Any employee of a participating municipality in service prior to the effective date of participation, who is a member of any other pension or retirement system supported wholly or in part by a participating municipality on the effective date of participation of their municipality, who then or thereafter makes written application to join this system, and waives and renounces all accrued rights and benefits of any other pension or retirement system supported wholly or in part by a participating municipality, becomes a member of this retirement system and shall not be required to make contribution under any other pension or retirement system of a participating municipality, anything to the contrary notwithstanding.
  • (d) Notwithstanding the provisions of this section, present firefighters employed by the town of Johnston shall establish a pension plan separate from the state of Rhode Island retirement system. If the town of Johnston is thirty (30) days or more late on employer or employee contributions to the pension plan, the auditor general is authorized to redirect any Johnston funds to cover the shortfall or to deduct that amount from any moneys due the town from the state for any purpose other than for education. Disability determinations of present firefighters shall be made by the state retirement board, subject to the provisions of § 45-21-19, at the town of Johnston's expense. All new firefighters hired by the town of Johnston shallbecome members of the state retirement system.
  • (e) Notwithstanding the provisions of this section, any city of Cranston employees who are presently members of Teamsters Local Union No. 251, hired between the dates of July 1, 2005, and June 30, 2010, inclusive, and who are currently members of the retirement system established by this chapter may opt out of said retirement system and choose to enrollin a defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the city of Cranston.
  • (f) Notwithstanding the provisions of this section, any city of Cranston employees who are presently members of the Laborers International Union of North America Local 1322 hired between the dates of July 1, 2008, and June 30, 2013, inclusive, and who are currently members of the retirement system established by this chapter may opt out of said retirement system and choose to enroll in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the city of Cranston.
  • (g) Notwithstanding the provisions of this section, any city of Cranston employees who will be members of Teamsters Local Union No. 251, hired after June 30, 2010, shall be enrolled
  • LC002870 - Page 2of 9 in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the city of Cranston and shall not be a member of the retirement system established by this chapter.
  • LC002870/SUB A - Page 2of 9 in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the city of Cranston and shall not be a member of the retirement system established by this chapter.
  • (h) Notwithstanding the provisions of this section, any city of Cranston employees who are presently members of the Laborers International Union of North America Local 1322 hired after April 23, 2013, shall be enrolled in a defined contribution plan (i.e., 403(b) plan or equivalent thereof) established by the city of Cranston and shall not be a member of the retirement system established by this chapter.
  • (i) Notwithstanding the provisions of this section, any city of Cranston employees defined in (e) and (f) of this section shall be precluded from purchase of service credit for time served on or after July 1, 2010, while participating in the defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the city of Cranston should the member cease employment with the city of Cranston or Teamsters LocalUnion No. 251 and re-enter the system with another participating employer who has accepted the provisions as defined, in § 45-21-4.
  • (j) Notwithstanding the provisions of this section, any town of Middletown employees, who will be members of the Teamsters Local Union No. 251 bargaining unit, hired after June 30, 2012, and any town of Middletown employees who are employed as full-time civilian dispatchers, hired after June 30, 2012, and any town of Middletown employees who are not affiliated with any recognized collective bargaining representative or union hired after June 30, 2012, shall be enrolled in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the town of Middletown and shall not be members of the retirement system established by this chapter. Said town of Middletown employees defined herein shall be precluded from the purchase of service credit for time served on or after July 1, 2012, while participating in the defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the town of Middletown should the member cease employment with the town of Middletown or in the Teamsters Local Union No. 251 bargaining unit and re-enter the system with any participating employer who has accepted the provisions as defined in § 45-21-4.
  • (k) Notwithstanding the provisions of this section, any town of Middletown employees, who will be members of the Middletown Municipal Employees Association NEARI Local 869 bargaining unit hired after June 30, 2012, shall be enrolled in a defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the town of Middletown and shall not be members of the retirement system established by this chapter. Said town of Middletown employees defined herein shall be precluded from the purchase of service credit for time served on or after July 1, 2012, while participating in the defined contribution plan (i.e., a 403(b) plan or equivalent thereof) established by the town of Middletown should the member cease employment
  • LC002870 - Page 3of 9 with the town of Middletown or in the Middletown Municipal Employees Association NEARI Local 869 bargaining unit and re-enter the system with any participating employer who has accepted the provisions as defined in § 45-21-4.
  • LC002870/SUB A - Page 3of 9 with the town of Middletown or in the Middletown Municipal Employees Association NEARI Local 869 bargaining unit and re-enter the system with any participating employer who has accepted the provisions as defined in § 45-21-4.
  • (l) Notwithstanding the provisions of this section, any Cranston public school employees who will be members of National Association of Government Employees (NAGE), LocalRI-153, hired after June 30, 2012, shall be enrolled in a defined contribution plan (i.e., a 401(a) plan or equivalent thereof) established by the Cranston school department and shall not be a member of the retirement system established by this chapter.
  • (m) Notwithstanding the provisions of this section, any Cranston public school employees defined in subsection (h) shall be precluded from the purchase of service credit for time served on or after July 1, 2012, while participating in the defined contribution plan (i.e., a 401(a) plan or equivalent thereof) established by the Cranston public schools should the member cease employment with the Cranston public schools or National Association of Government Employees (NAGE), Local RI-153 and re-enter the system with another participating employer who has accepted the provisions as defined in § 45-21-4.
  • (n) Notwithstanding the provisions of this section, the chief of police for the city of Cranston who was hired on or about September 2014, shall be enrolled in a defined contribution plan (i.e., 401(a) plan or any equivalent thereof) established by the city of Cranston, and shallnot be a member of the retirement system established by this chapter.
  • 45-21-16.2. Electronic funds transfer.
  • All members of the municipal employees retirement system retiring under the provisions of this title on or after July 1, 1998, or joining the system pursuant to §45-21.4-2 or §45-21.4-3, are required to participate in electronic funds transfer and to supply the municipal employees retirement system with a bank routing number to effectuate a monthly transfer of benefits.
  • SECTION 2. Section 45-21.2-3 of the General Laws in Chapter 45-21.2 entitled "Optional Retirement for Members of Police Force and Fire Fighters" is hereby amended to read as follows:
  • 45-21.2-3. Optional retirement for police and fire fighters.
  • In addition to the retirement system established under the provisions of chapter 21 of this title, any municipality may accept this chapter in the manner stated in § 45-21-4. Withdrawal from the system is in the same manner as stated in § 45-21-5 subject to the provisions of § 45- 21.4-3.
  • SECTION 3. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby amended by adding thereto the following chapter:
  • LC002870 - Page 4of 9
  • LC002870/SUB A - Page 4of 9
  • CHAPTER 21.4
  • RELATING TO CENTRAL FALLS PENSION PLAN
  • 45-21.4-1. Legislative findings.
  • The general assembly finds and declares the following:
  • The generalassembly finds and declares the following:
  • (1) All Rhode Islanders deserve retirement security, including those who have spent their careers serving their communities as first responders and municipal employees; and
  • (2) The city of Central Falls has shown great resilience in emerging from bankruptcy and thriving economically and culturally against great odds; and
  • (3) The bankruptcy occurred in part because the pension plan in CentralFalls had become severely underfunded, and as a result many first responders and retirees in the city of Central Falls experienced significant hardship in the form of benefit reductions; and
  • (4) The city of Central Falls, the labor organizations representing its first responders, and the state of Rhode Island are united in their desire to see the city of Central Falls remain on the path of fiscal health, and that the predictability and sustainability of the pension system is vital to maintaining fiscal health for the city of Central Falls and retirement security for its first responders and retirees.
  • (5) The general assembly adopts this act to facilitate the assistance of the municipal employees' retirement system of the state of Rhode Island in administering the localCentralFalls pension plan
  • 45-21.4-2. Alternative acceptance bythe cityof Central Falls of optional retirement for police and fire fighters.
  • (a) The provisions of this section shall apply only to locally administered plans within the city of CentralFalls hereinafter referred collectively as the "CentralFalls plan".
  • (b) On or after the effective date of this section, Central Falls may accept the provisions of this chapter, by resolution or an ordinance of its governing body stating the group or groups of employees to be included as provided in § 45-21-4; provided that, any and all labor organizations representing active employees of the municipality to be included have assented to such participation of their respective memberships, through a collective bargaining agreement and ratification of the decision by a majority vote of those members of any such labor organization present and voting. A copy of the resolution or ordinance and proof of assent from the applicable labor organization shall be immediately forwarded to the retirement board for review. A vote of the retirement board to accept the entry of the group or groups of employees in to the system shall be required.
  • (c) Effective August 31, 2019, the CentralFalls plan shall be closed to new members.
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  • (d) Members of the Central Falls plan in active service as of August 30, 2019 shall continue to be subject to the applicable retirement ages and restrictions, and accrue benefits on total service at the rates of the CentralFalls plan pursuant to the collective bargaining agreements in effect on August 30, 2019 between Central Falls and the labor organizations representing members of the CentralFalls plan.
  • (e) Disability determinations shall be made by the retirement board, subject to the procedures and standards of §§ 45-21.2-7 and 45-21.2-9 as applicable, for members hired prior to August 31, 2019. If a disability retirement pension is granted, the member shall receive benefits provided by the Central Falls pension plan pursuant to the collective bargaining agreements in effect on August 30, 2019.
  • (f) Beginning August 31, 2019 members of the Central Falls plan in active service shall contribute an amount equal to eleven and seven-tenths percent (11.7%) of the salary or compensation earned or accruing to the member.
  • (g) Subject to the provisions of subsection (b) of this section being met, new employees hired on or after August 31, 2019 shall be subject to all of the provisions of § 45-21.2, including all applicable disability provisions and benefits provided by §§ 36-10.3-4 and 45-21-52.
  • (h) Notwithstanding anything in § 45-21-42.2 to the contrary, the cost to evaluate Central Falls prospective membership in the retirement system pursuant to this section or § 45-21.4-3, shall be borne by the retirement board.
  • (i) Notwithstanding anything in § 45-21-43.1 to the contrary, determination of the employer contribution rate of the closed Central Falls pension plan pursuant to this section, shall be computed using an amortization period for the unfunded actuarial accrued liability as determined by the board, based upon the recommendation of the plan's actuary. Future actuarial gains and losses accruing within a plan year will be amortized over individual new twenty (20) year closed periods consistent with § 45-21-43.1(c).
  • (j) Notwithstanding anything in § 45-21-56 to the contrary, if a CentralFalls pension plan pursuant to this section is in critical status as defined in § 45-65-4, and an employee of the Central Falls pension plan leaves employment and is hired by another participating municipality that is not in critical status as defined in § 45-65-4, then the retirement system shall transfer the amount of the member's total accrued liability with the Central Falls pension plan, multiplied by the funded status of the Central Falls pension plan, to the account of the current employing municipality.
  • (k) Upon the conditions of subsection (b) of this section being met, the city of Central Falls shall remain liable to the retirement system for the cost of funding a retirement system for
  • LC002870 - Page 6of 9 its employees who are members of the system as provided herein, and the retirement board maintains the right to enforce payment of any liability as provided in chapter 21 of this title.
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  • (d) Members of the Central Falls plan in active service as of August 31, 2019 shall continue to be subject to the applicable retirement ages and restrictions, and accrue benefits on total service at the rates of the CentralFalls plan pursuant to the collective bargaining agreements in effect on August 31, 2019 between Central Falls and the labor organizations representing members of the CentralFalls plan.
  • (e) Disability determinations shall be made by the retirement board, subject to the procedures and standards of §§ 45-21.2-7 and 45-21.2-9 as applicable, for members hired prior to September 1, 2019. If a disability retirement pension is granted, the member shallreceive benefits provided by the Central Falls pension plan pursuant to the collective bargaining agreements in effect on August 31, 2019.
  • (f) Beginning September 1, 2019 members of the CentralFalls plan in active service shall contribute an amount equal to eleven and seven-tenths percent (11.7%) of the salary or compensation earned or accruing to the member.
  • (g) Subject to the provisions of subsection (b) of this section being met, new employees hired on or after September 1, 2019 shall be subject to all of the provisions of § 45-21.2, including all applicable disability provisions and benefits provided by §§ 36-10.3-4 and 45-21-52.
  • (h) Notwithstanding anything in § 45-21-42.2 to the contrary, the cost to evaluate Central Falls prospective membership in the retirement system pursuant to this section or § 45-21.4-3, shall be borne by the retirement board.
  • (i) Notwithstanding anything in § 45-21-43.1 to the contrary, determination of the employer contribution rate of the closed Central Falls pension plan pursuant to this section, shall be computed using an amortization period for the unfunded actuarial accrued liability as determined by the board, based upon the recommendation of the plan's actuary. Future actuarial gains and losses accruing within a plan year will be amortized over individual new twenty (20) year closed periods consistent with § 45-21-43.1(c).
  • (j) Notwithstanding anything in § 45-21-56 to the contrary, if a CentralFalls pension plan pursuant to this section is in critical status as defined in § 45-65-4, and an employee of the Central Falls pension plan leaves employment and is hired by another participating municipality that is not in critical status as defined in § 45-65-4, then the retirement system shall transfer the amount of the member's total accrued liability with the Central Falls pension plan, multiplied by the funded status of the Central Falls pension plan, to the account of the current employing municipality.
  • (k) Upon the conditions of subsection (b) of this section being met, the city of Central Falls shall remain liable to the retirement system for the cost of funding a retirement system for
  • LC002870/SUB A - Page 6of 9 its employees who are members of the system as provided herein, and the retirement board maintains the right to enforce payment of any liability as provided in chapter 21 of this title.
  • (l) Subject to the provisions of subsection (b) of this section being met, the Central Falls plan and the provisions of this section shall be administered in the same manner provided in chapter 21 of this title; credits for prior service and collection of contributions are determined through reference to that chapter; provided, that where the provisions of that chapter conflict with this chapter, then the provisions of this chapter control. Liability of contributions is enforced in the same manner as stated in chapter 21 of this title.
  • 45-21.4-3. Retiree participation in optional requirement plan.
  • (a) The provisions of this section shall apply only to locally administered plans within the city of CentralFalls.
  • (b) Notwithstanding any provision of this chapter to the contrary, on or before August 31, 2019, Central Falls may accept the provisions of this chapter by an ordinance of its governing body stating the group or groups of retired former employees to be included as provided in § 45- 21-4; provided that, a majority of retired former employees have consented in writing to joining the system or any duly constituted retiree organization that represents said retired former employees has assented to joining the system. A copy of the ordinance shall be immediately forwardedto the retirement board for review. A vote of the retirement board to acceptthe entry of the group or groups of employees in to the system shall be required.
  • For purposes of this section, "retired former employees" means any Central Falls police officer or fire fighter who has retired prior to August 31, 2019, pursuant to the provisions of the CentralFalls' retirement plan.
  • (c) Notwithstanding any other provisions of this section or other applicable law, upon acceptance into the system, all "Central Falls retirees," as defined in § 45-21-67(a)(2), and their beneficiaries, and also all other former retired employees and their beneficiaries who are entitled to benefits under the "settlement agreement" that is identified in § 45-21-67(a)(3), shall retain all of the benefits accrued and calculated to them as provided in accordance with such settlement agreement (and, for clarification, irrespective of and notwithstanding any possible expiration of any "term" in respect to certain provisions of such agreement), including disability and post- retirement benefits, and their entitlement to all payments provided under § 45-21-67, and none of the foregoing shall be made unavailable or conditioned, nor be diminished or reduced, by virtue of entry into the system. The retired former employee, including any "Central Falls retiree", shall not be entitled to any retirement allowance or benefit from the system otherwise available or calculated pursuant to the provisions of §§ 45-21.2-6, 45-21.2-13, or 45-21.2-20, 45-21.2-21, or
  • LC002870 - Page 7of 9 45-21.2-22.
  • For purposes of this section, "retired former employees" means any Central Falls police officer or fire fighter who has retired prior to September 1, 2019, pursuant to the provisions of the CentralFalls' retirement plan.
  • (c) Notwithstanding any other provisions of this section or other applicable law, upon acceptance into the system, all "Central Falls retirees," as defined in § 45-21-67(a)(2), and their beneficiaries, and also all other retired former employees and their beneficiaries who are entitled to benefits under the "settlement agreement" that is identified in § 45-21-67(a)(3), shall retain all of the benefits accrued and calculated to them as provided in accordance with such settlement agreement (and, for clarification, irrespective of and notwithstanding any possible expiration of any "term" in respect to certain provisions of such agreement), including disability and post- retirement benefits, and their entitlement to all payments provided under § 45-21-67, and none of the foregoing shall be made unavailable or conditioned, nor be diminished or reduced, by virtue of entry into the system. Any retired former employee who is not entitled to benefits under the "settlement agreement" shall retain all of the benefits accrued and calculated in accordance with, and shall be subject to, all of the provisions, limitations and restrictions contained in the
  • LC002870/SUB A - Page 7of 9 collective bargaining agreement at the time of his or her retirement. Retired former employees, including any "Central Falls retiree", shall not be entitled to any retirement allowance or benefit from the system otherwise available or calculated pursuant to the provisions of §§ 45-21.2-6, 45- 21.2-13, or 45-21.2-20, 45-21.2-21, or 45-21.2-22.
  • (d) Withdrawal of a plan consisting solely of retired former Central Falls police officers or fire fighters, that had joined the retirement system pursuant to this section, shallbe as provided in § 45-21-5.
  • (e) The cost to evaluate Central Falls' prospective membership in the retirement system, and costs related to obtaining consent of retirees to join the system pursuant to this section shall be borne by the retirement board.
  • (f) Upon the conditions of subsection (b) of this section being met, the city of Central Falls shall remain liable to the retirement system for the cost of funding a retirement system for its employees who are members of the system and the retirement board maintains the right to enforce payment of any liability as provided in chapter 21 of this title.
  • (g) Subject to the provisions of subsection (b) of this section being met, the provisions of this section shall be administered in the same manner provided in chapter 21 of this title; provided, that where the provisions of that chapter conflict with this chapter, then the provisions of this chapter control. Liability of the municipality is enforced in the same manner as stated in chapter 21 of this title.
  • 45-21.4-4. Transfer of assets.
  • (a) Subject to the provisions of §§ 45-21.4-2(b) and 45-21.4-3(b) being met, on December 31, 2019, the system shall be responsible for administering the Central Falls plan, including the administration of any supplemental payments as provided in § 45-21-67, and Central Falls shall transfer to the system the accumulated contributions of each member entering the system and any other assets of the CentralFalls plan.
  • (b) Beginning January 1, 2020, all appropriations made pursuant to § 45-21-67 shall be appropriated to the system and disbursed by the system in accordance with § 45-21-67.
  • SECTION 4. This act shalltake effect upon passage.
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  • LC002870
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  • EXPLANATION
  • BY THE LEGISLATIVE COUNCIL
  • OF
  • A N A C T RELATINGTO TOWNSAND CITIES- RETIREMENTOFMUNICIPALEMPLOYEESAND
  • CLOSED MUNICIPAL RETIREMENT PLANS
  • ***
  • This act would facilitate the locally administered Central Falls retirement plans joining the municipal employees retirement system of the state, by providing greater flexibility in funding policies than would otherwise be required, depending upon the needs and circumstances of the community.
  • This act would take effect upon passage. ======== LC002870 ========
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  • This act would take effect upon passage. ======== LC002870/SUB A ========
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