Bill
HB 7500
The bill changes Rhode Island teachers’ retirement benefits by shifting the calculation cutoff dates and averaging methods, increasing or altering future pensions.
Title: AN ACT RELATING TO EDUCATION -- TEACHERS' RETIREMENT
Introduced: February 4, 2026
Referred to: House Finance
Sponsors: Shanley, Bennett, Voas, Stewart, Casimiro (co-sponsors)
Status: As of the latest action, the committee recommended holding the measure for further study.
Purpose and Intent
- This bill makes targeted amendments to the Rhode Island Teachers’ Retirement system (and related municipal employee retirement provisions) to modify retirement benefit calculations for certain members.
- In short, it shifts the retirement benefit calculation cutoff date to ensure more members retire under revised formulas and changes the formula for average compensation used to determine benefits.
Key Provisions
1) Teachers' Retirement – Calculation of Service Retirement Allowance (16-16-13)
- The bill retains the existing framework for determining service retirement allowances but changes the applicability window for certain calculations.
- It introduces a bifurcated approach based on retirement eligibility and membership start dates, with schedules A and B determining the percentage allowance (i.e., the percent of average compensation that becomes the annual retirement allowance) over different years of service.
- Schedule A (older formula) applies to:
- Members eligible to retire on or before Sept. 30, 2009, with membership before July 1, 2005, and at least 10 years of contributory service by July 1, 2005.
- Members eligible to retire on or after Oct. 1, 2009 (but not earlier), with similar pre-2005 eligibility, continuing under Schedule A for service prior to Sept. 30, 2009, and under Schedule B for service after Sept. 30, 2009 (and before July 1, 2012).
- Schedule B (newer formula) applies to:
- Teachers whose membership commenced after July 1, 2005, or who have not completed 10 years of contributory service as of July 1, 2005, with service prior to July 1, 2012 calculated under Schedule B (and extended rules thereafter).
- Additional rules adjust how average compensation is calculated (three-year, five-year, or three-year averages) depending on retirement date and service characteristics, with caps ensuring the benefit does not exceed specified percentages of compensation (e.g., up to 75%).
2) Definitions and Related Changes (General Laws)
- Section 36-8-1 definitions are updated to align with the revised benefit calculations, including:
- Average compensation: changes in which years are used (three, five, or ten years) and thresholds for minimums and indexing.
- Final compensation: aligned with the revised qualifying years and averages for municipal employees (Section 45-21 series) to harmonize treatment between teacher and municipal retirement systems.
- Revisions to glossary terms (e.g., active member, service, total service, regular interest, actuarial costs) to reflect the adjusted formulas and participating group scope.
3) Municipal Employees Retirement (Section 45-21-2)
- The bill also reframes definitions for the municipal employees’ retirement system to reflect the same approach to final/average compensation and related calculations, ensuring consistency with the teacher retirement changes.
4) Effective Date
- Section 4 states the act takes effect upon passage (immediate implementation upon signing).
Impact and Affected Parties
Notes
Compiled from official sources — confirm details with the bill’s official record.
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