Bill
HB 5407
The bill changes teachers’ retirement eligibility and early-retirement reductions by applying different eligibility rules based on prior service dates and offering actuarial reduct
Title: AN ACT RELATING TO EDUCATION -- TEACHERS', MUNICIPAL AND STATE EMPLOYEES EARLY RETIREMENT PENALTY
Bill #: HB 5407
Introduced: Feb 7, 2025 (filed Mar 14, 2025)
Sponsors: Reps. Bennett, Shanley, Hull, Diaz, Perez, Slater, Casimiro, Potter, Baginski, Messier
Current status: 04/22/2025 — Committee recommended measure be held for further study (House committee consideration scheduled 04/22/2025)
Related: HB 5438 (companion)
Purpose
- To amend Rhode Island’s teachers’ retirement statute (R.I. Gen. Laws §16-16-12) governing service retirement eligibility and actuarial reductions, and to address early retirement penalties. (The bill title also references municipal and state employees, but the provided text amends the Teachers’ Retirement provisions; later sections are truncated in the provided version.)
Key provisions (as included in the provided text)
- Establishes different retirement-eligibility rules tied to specific historical cutoffs:
- Members with specified service on or before July 1, 2005 — retain earlier age/service eligibility (e.g., age 60 + 10 contributory years, or 28 total years regardless of age) if eligible before or as of 9/30/2009.
- For members who become eligible 10/1/2009 through 6/30/2012 — minimum retirement age generally is raised to 62 with at least 10 contributory years (or 29 total years depending on the clause), but allows a proportional downward adjustment of that age based on service earned as of 9/30/2009. The bill specifies a three-step proportional formula to calculate the adjusted age.
- Effective 7/1/2012 — for teachers not previously eligible, eligibility requires at least five (5) years of contributory service and attainment of the teacher’s Social Security retirement age. For those with service as of 6/30/2012, a proportional formula can reduce that retirement age (but not below age 59 or below the age under laws in effect 6/30/2012).
- Early retirement option effective 7/1/2015: Teachers with 20+ years total service and within five years of their eligible retirement age may elect to retire early with an actuarial reduction. The bill provides a table of cumulative reductions by year preceding retirement (Year 1 higher reduction — e.g., ~9% cumulative annual; Years 2–5 somewhat lower — e.g., ~8% then ~7%), with specified monthly equivalents (approximately 0.25%–0.75% per month depending on the year). (Table in text is reproduced; precise application uses actuarial reduction per month under the section.)
- Several clauses repeat the proportional formula methodology for different benchmark dates (9/30/2009 and 6/30/2012) to determine how much a member’s minimum retirement age is reduced based on service credit earned by those dates.
Who is affected
- Primarily active and prospective members of the Rhode Island Teachers’ Retirement System: educators whose service spans the various cutoff dates (9/30/2009, 6/30/2012, 7/1/2012) will be affected differently depending on their service credit and retirement timing.
- Indirectly relevant to school districts, state and municipal budgets because changes to retirement eligibility and actuarial reductions affect pension benefit timing and cost. (Text referencing municipal and state employees is not included in the supplied excerpt; impacts on those groups are therefore unclear from the provided material.)
Procedural / timeline notes
- Introduced in early 2025; referred to House Finance and Trade, Workforce & Economic Development committees. As of 04/22/2025 the committee recommended holding the measure for further study (i.e., not advancing it at that time).
- The supplied bill text is truncated after §16-16-12(c)(iv); readers should consult the full enrolled bill or legislative files (and companion HB 5438) for complete provisions, including any sections addressing municipal and state employee retirement penalties.
For full analysis
- Review the complete bill text and actuarial impact statements (if available) to quantify budgetary effects and to clarify provisions that are truncated in the supplied excerpt.
Compiled from official sources — confirm details with the bill’s official record.
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