The 2005 Rhode Island General Assembly enacted broad changes for teacher and state employee members of the Employees' Retirement System of Rhode Island.
The new law modifies benefits for future hires and current members who have fewer than 10 years of service as of July 5, 2005. These members are now referred to as "Schedule B" members. All other current employees (with more than 10 years of service) are referred to as "Schedule A" members, and will experience no change in benefits.
The Schedule A designation includes inactive vested members who have more than 10 years of contributory service, as well as all current retirees.
| Summary of Changes - Schedule B Members |
New Formula for Accruing
Retirement Percentage Allowance |
| Years of Service |
Percent Earned Per Year |
| 1-10 inclusive |
1.60% |
| 11-20 inclusive |
1.80% |
| 21-25 inclusive |
2.00% |
| 26-30 inclusive |
2.25% |
| 31-37 inclusive |
2.50% |
| 38 |
2.25% |
(working beyond 38 years of service earns no further percentage allowance)
"Normal retirement" is now defined as age 59 with at least 29 years of service, at 53%.
Maximum credit is now awarded following 38 years of service, at 75%.
- A member may retire at age 59 or later with a minimum of 29 years of service, with no actuarial reduction in benefit. Such a member would collect a retirement benefit equal to 53% annually of the average of his/her three highest years' salaries.
- A member may retire at age 65 or later with a minimum of 10 years of service, with no actuarial reduction in benefit. This member would collect 16% annually of the average of his/her three highest years' salaries.
- A member may retire at a minimum age of 55 with a minimum of 20 years of service, or between age 59 and 65 with more than 10 but fewer than 29 years of service, and collect an actuarially reduced benefit depending on age. The "actuarial early retirement factors" are listed below.
The actuarial early retirement factor is the amount a member's benefit is reduced by if that member retires:
- Between the ages of 55 and 59, with at least 20 years of service, or;
- Between the ages of 59 and 65 with at least 10 but no more than 28 years of service.
| Actuarial Early Retirement Factors |
| Age |
Age Factor |
| 55 |
34.9% |
| 56 |
38.5% |
| 57 |
42.5% |
| 58 |
47.1% |
| 59 |
52.2% |
| 60 |
57.9% |
| 61 |
64.3% |
| 62 |
71.6% |
| 63 |
79.9% |
| 64 |
89.3% |
Example: Using the actuarial early retirement factor, a member retiring at age 57 with 25 years of service would receive 42.5% of his/her earned benefit, which is 44% of the average of his/her three highest years' salaries. In other words, if that average is $50,000, the earned annual benefit would be $22,000. By retiring early, the member would receive only 42.5% of $22,000, or $9,350.
Many members who began their public employment at a young age may have accrued 29 or more years of service well before their 59th birthday. These members can avoid a retirement reduction by deferring collection of their benefits until age 59 or later, even if they leave state employment at an earlier date. Likewise, members with only 10 years of service can avoid a retirement reduction by waiting until age 65 to collect their benefits.
- The SRA-Plus Option (Social Security) is eliminated for Schedule B members. These retirement plan changes were devised in the General Assembly last year under the direction of Governor Carcieri. In turn, the state is obligated to abide by a contributions re-invest provision.
- In any year that the actuarially required employer contribution to the system is lower than the year before, the governor shall take 20% of the rate reduction and appropriate it to the pension fund.
- The 20% shall be an additional amount over the required contribution, and serve to reduce the UAAL.
Visit the Retirement System for more information.