Bill
SB 2362
Rhode Island SB 2362 expands teacher and municipal retirement benefits with new COLA structures, one-time stipends, and tax adjustments linked to funding thresholds.
SB 2362 ( Rhode Island, 2026) is an education-related measure focused on teachers’ retirement benefits. Introduced January 30, 2026 and referred to the Senate Finance Committee, the bill makes adjustments to retirement benefits for teachers, retirees, and their beneficiaries, and also includes corresponding modifications to related income tax provisions and municipal retirement plans. The act would take effect upon passage.
1) Spouse, former spouse, or domestic partner benefits (16-16-26)
- Establishes eligibility for monthly spousal/partner benefits upon reaching age 60.
- Sets a minimum monthly benefit scale based on the highest annual salary, with a matrix (ranges from $825 to $1,725+ per month for the spouse/partner).
- Provides that remarriage or establishment of a domestic partnership would render the person ineligible for these benefits.
- Clarifies conditions for deeming cohabitation and support arrangements.
- Specifies cost-of-living adjustments (COLAs) for these benefits tied to the annual Social Security adjustment.
2) Additional benefits for retired teachers (16-16-40)
- Maintains and supplements longstanding COLA structures for retirees and beneficiaries, with phased implementation across eras (pre-1967, post-1967, and later years).
- Introduces a comprehensive COLA framework that uses: annual percentage increases (e.g., 1.5% and 3%), compounding rules, and CPI-U-based adjustments, with caps and phase-ins based on funded ratios of Rhode Island retirement systems.
- Provides several sets of adjustments contingent on funding thresholds (80% funded ratio) across:
- Plan F (several subsections labeled (f)–(h)) covering general teachers, disability retirees, and those aged out of specific eligibility windows.
- A one-time 2% or 3.34% COLA-type adjustment for retirees who retired by certain dates, plus subsequent annual adjustments as governed by funded status.
- Includes targeted one-time stipends of $500 for certain retirees as a non-COLA lump-sum.
3) Tax code changes (44-30-12)
- Adds modifications increasing Rhode Island taxable income related to certain pension and retirement benefits, including:
- Taxable portions of nonqualified 529 withdrawals, certain tuition savings program distributions, unemployment compensation, and other pension-related adjustments.
- Subtractions and additions to federal AGI for specific pension-related items, 529 program carryovers, Social Security income tax treatment, and other defined scenarios.
- Provisions for adjustments to reflect changes such as the One Big Beautiful Bill Act or similar Congressional actions (emergency-rule trigger).
- Also includes provisions related to Rhode Island investment in opportunity zones, military service pensions, and other pension-related tax adjustments.
4) Municipal employees’ retirement system (Section 45-21-52)
- Allows municipalities to adopt automatic COLA plans (Plan A, B, or C) with varying annual increases, subject to funding thresholds.
- Mirrors state-level COLA mechanics, including annual adjustments, funding ratio tests (80%), one-time stipends, and phased reinstatements tied to actuarial funding status.
- Adds a provision for special cases (East Greenwich municipal-COLA Group) and employee salary deduction requirements.
Compiled from official sources — confirm details with the bill’s official record.
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