AN ACT RELATING TO TOWNS AND CITIES -- OPTIONAL RETIREMENT FOR MEMBERS OF POLICE FORCE AND FIREFIGHTERS

2026 Regular Session Introduced by Bob Britto and 9 co-sponsors

Allows a universal 2.5% annual pension escalation for active and retired police and firefighters, compounded each Jan 1 after retirement.

05/14/2026 Committee recommended measure be held for further study

Bill Summary — SB 2249 (Rhode Island, 2026)

Purpose and Intent

This act proposes an optional retirement enhancement for members of police and fire departments operating under Rhode Island towns and cities.

The core change is to authorize a universal annual pension escalation of 2.5% for all active and retired police and firefighter retirement allowances, compounded annually each January 1 after retirement.

Key Provisions and Changes

Section 1: Amendments to § 45-21.2-5 (Retirement on service allowance)

Retains existing retirement eligibility and detailed criteria for various municipalities and circumstances (e.g., age, years of service, specific local provisions for Cranston, Hopkinton, Johnston, Richmond, South Kingstown).
Introduces an additional 2.5% escalation on pension payments for all active and retired members, compounded annually on January 1 after retirement (new subsection references indicate escalation applies broadly as a change to benefit calculations).
Clarifies special rules for certain municipalities and for members hired after specific dates (e.g., Cranston and Johnston provisions regarding post-1995 hires, escalation, and disability treatment via local CBAs).
Maintains existing “eligible retirement age” and phased or reduced retirement options, including early retirement with actuarial reductions, and special provisions for certain departments (Woonsocket, Cranston, Hopkinton, Richmond, Johnston, South Kingstown).
Provides a grandfathering/transition mechanism for members with specific prior rights (e.g., June 30, 2012 baseline rules, Social Security age triggers, and pre-2012 benefit baselines).

Section 2: Effective Date

The act takes effect upon passage.

Who is Affected

Active and retired police officers and firefighters covered by Rhode Island town/city retirement systems, including specific municipal provisions:

General provisions apply to all members under the state’s Optional Retirement for Police and Firefighters program.
Specific municipalities referenced: Cranston, Hopkinton, Johnston, Richmond, South Kingstown, and others with tailored retirement rules.

Beneficiaries and survivors receiving retirement allowances would also be affected by the 2.5% annual escalation.

Procedural and Timeline Aspects

Introduction date: January 23, 2026.

Referred to: Senate Finance.

Scheduled hearing/consideration: May 14, 2026 (per action history).

Effective date: Upon passage (no delayed or phased implementation stated).

Potential Impacts and Considerations

Financial Impact: A universal 2.5% annual escalation increases ongoing pension liabilities for municipal retirement systems. Governments may need to adjust funding plans, contribution rates, or amortization schedules to accommodate higher escalations.

Benefits for Members: Provides a steady, compounding increase to pension payments, improving long-term retirement income regardless of market performance.

Administrative Implications: All affected retirement systems would need to implement the escalation calculation, ensure proper rounding/compounding, and integrate with existing actuarial assumptions.

Equity and Transitions: The bill retains numerous existing eligibility rules and grandfathering provisions, aiming to balance new escalator benefits with pre-existing rights and local agreements.

If you’d like, I can provide a side-by-side comparison of current law versus proposed changes for specific municipalities (e.g., Cranston, Johnston, Hopkinton) or summarize potential budgetary implications based on actuarial assumptions.