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SB 2818

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

2026 Regular Session Introduced by John Burke and 5 co-sponsors

SB 2818 creates broad, prospective, compounded COLAs for state, teacher, and municipal retirees, tied to funding levels and sunsetting July 1, 2035, with protections against retroa

05/14/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2818

Summary of SB 2818 (Rhode Island) – Retirement System — Contributions and Benefits

Purpose and Intent

  • This act seeks to provide broad, statutory cost-of-living adjustments (COLAs) for retirees under Rhode Island’s public employee retirement systems, including state employees, teachers, and municipal employees.
  • It establishes new, prospective COLA mechanisms that would be paid as additions to existing retirement allowances, with caps and funding-ratio triggers tied to system funding levels.
  • The measure is designed to be self-contained, with separate provisions for state and municipal teacher retirements and for municipal employees enrolled in the Rhode Island Retirement System.

Key Provisions and Changes

State Retirement System (36-10-35) – Primary changes

  • (a) Pre-1968 retirees (on or before 12/31/1967) and their beneficiaries: annual COLA of 1.5% of the original retirement allowance for each calendar year the retirement allowance has been in effect, non-compounded. A special minimum of $200/year kicks in for certain long-retired retirees.
  • (b) Post-1967 retirees (on or after 1/1/1968): starting the January after the third anniversary of retirement, a 3% of the original retirement allowance COLA annually through 1980.
  • (c) From 1/1/1981 onward for long-tenured and qualifying members: 3% of the original allowance, compounded annually, through those who retired before 10/1/2009.
  • (d) A version limiting COLA to the first $35,000 of the retirement allowance for certain non-retiring-eligible members, with an annual index to adjust the $35,000 cap.
  • (e) Legislators and their beneficiaries: 3% of the original retirement allowance annually, compounded, starting in 1982.
  • (g) Special “g” provisions (2012–2015): optional, subsidy-like adjustments tied to investment returns, funded ratio rules, and five-year lookbacks; includes caps, phase-ins, and sunset provisions.
  • (h) 2015+ adjustments for a broad set of retirees with a mix of CPI-U and fixed-percent adjustments, subject to funding levels; includes one-time stipends and phased reductions/reenactments based on funded ratio.
  • (i) A one-time $500 stipend for retirees as of certain dates (earlier period).

  • (j) (New on 1/1/2026 and subsequent): An additional, separate CPI-U-based COLA for all retired former state employees (excluding state police and judges), calculated as CPI-U increase for the prior year but not exceeding 3% and not less than 0%. These adjustments compound annually and are prospective only. Sunset: July 1, 2035.

  • Funding mechanics: Several portions of the bill (notably subsections (g) and (h)) tie COLA adjustments to the funded ratio of the Rhode Island Employees’ Retirement System, the Judicial Retirement Benefits Trust, and the State Police Retirement Benefits Trust. When the funded ratio is below 80%, COLAs are suspended or reduced; when above 80%, adjustments can be reinstated. Five-year and long-term cycles govern reinstitution.

  • Funding responsibility: The COLA provisions are described as being funded from funds held by the Employee Retirement System of Rhode Island and are explicitly stated not to increase or modify employer contributions.

Teachers’ Retirement (Chapters 16-16)

  • The bill amends sections relating to applicability and COLAs for teachers, aligning them with state provisions but with teacher-specific thresholds and schedules (mirroring the state system’s structure where applicable).
  • Final compensation definitions for teachers are adjusted for different eligibility periods (before/after July 1, 2012; and by 2024 for highest consecutive years).
  • A parallel set of COLA provisions (including CPI-U-based adjustments, caps, and funding-ratio triggers) applies to retired teachers and beneficiaries, with similar sunset timing (2035) as for state employees.
  • One-time stipends and separate adjustments (as described in state provisions) are mirrored for teachers, including a $500 stipend for certain retirees.

Municipal Employees (45-21-2 et al.)

  • The act expands COLA adjustments to retired municipal employees who are part of the Rhode Island retirement system, effective January 1, 2026, with:
    • An annual adjustment equal to the CPI-U increase for the prior year’s third quarter, capped at 3% and not below 0%.
    • Such adjustments are compounded annually and become the basis for CPI calculations in subsequent years.
    • The adjustments apply prospectively only and do not alter municipal employer contributions to the system.
    • Effective sunset: July 1, 2035.
  • The act also revises definitions (e.g., “final compensation”) for municipal members to reflect changes in eligibility timelines and regulatory refinements.

Affected Parties

  • State employees and their beneficiaries receiving service, ordinary, or accidental disability retirement allowances (and their beneficiaries).
  • Teachers and teacher retirees and beneficiaries.
  • Municipal employees enrolled in the Rhode Island municipal employees retirement system (and their beneficiaries).
  • Legislators and their beneficiaries.
  • Public officials and retirees excluded from certain groups (e.g., state police and judges) in specific subsections (j).

Procedural and Timeline Aspects

  • Effective Date: The act takes effect upon passage.
  • Prospective Application: The new COLA provisions are prospective; they do not retroactively change benefits or past entitlements.
  • Sunset: The added CPI-based COLA provisions for state, teachers, and municipalities are set to sunset on July 1, 2035.
  • Funding Triggers: COLA adjustments depend on the funded status of multiple retirement trusts and the overall system’s actuarial assumptions; adjustments can be suspended if funding falls below thresholds and reinstated when funding improves.
  • Administrative Implementation: Subsection (j) introduces a separate CPI-based adjustment starting January 1, 2026, with calculations based on CPI-U and the retiree’s 2026 benefit baseline.

Summary Assessment

SB 2818 codifies a broad slate of prospective, compounded COLAs for retirees across state, teacher, and municipal retirement systems, while tying adjustments to funding levels and imposing sunset provisions. It includes multiple staged provisions, one-time stipends, and parallel treatments for different retiree groups, with explicit protection against retroactive benefits and a stated approach to funding via the retirement system’s own resources (not employer contributions).

Compiled from official sources — confirm details with the bill’s official record.

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