Frequently Asked Questions - Teachers

A Teacher’s Guide to RIRSA

• Member contributions to DB: 3.75 percent
• Member contributions to DC: 5 percent; additional 2 percent for teachers without Social Security
• Employer contributions to DC: 1 percent; additional 2 percent for teachers without Social Security
• DB pension accrual rate: 1 percent per year; (See Hybrid FAQs)
• Average Compensation: Average of the highest 5 consecutive years of compensation
• COLA: The RIRSA COLA provisions are the same for state employees, teachers, judges, employees and state police. The law enacted November 18, 2011 will suspend the COLA for all state employees, teachers, state police and judges until the plans’ funding level for all groups, calculated in the aggregate, exceeds an 80 percent funding level. For all public employees with a suspended COLA, a COLA will be calculated and awarded at 5 year intervals during the suspension period. All COLAs will be calculated and awarded based on investment returns and will have a floor of 0 percent and a ceiling of four percent. The COLA will be awarded on a member’s first $25,000 (indexed) of pension allowance. (See COLA FAQ)    

• Retirement age: For all members eligible to retire prior to July 1, 2012, their retirement age remains the same as current law. For all new hires or members with less than five years of service on June 30, 2012, the new retirement age will match their Social Security retirement age. Members with five or more years of service on June 30, 2012, will be eligible to retire at their Social Security retirement age but will receive a proportional downward adjustment based on years of service prior to July 1, 2012, with a minimum retirement age of 59. Under the new bill, Social Security retirement age will never exceed age 67. (See Retirement Age FAQ)
• Vesting: Five years for DB; three years for employer contributions to DC; immediately for employee contributions to DC

Member Contribution Rate to Defined Benefit Plan	Retirement Eligibility	Benefit Multiplier	Average Compensation Period	Post-Retirement Benefit Adjustments	Defined Contributions
3.75 percent	-Social Security Normal Retirement. See transition rules	1 percent	Highest five consecutive years	Risk-adjusted COLA targeting two percent. Calculated as five-year smoothed investment return less 5.50 percent, with 0 percent Floor and 4.0 percent Cap, applied to first $25,000 of benefit, indexed. COLA delayed until later of SS NRA or 3 years after retirement. See COLA FAQs for suspension rules.	5 percent Member plus 1 percent Employer DC contribution. Teachers without Social Security: additional 2 percent Member and 2 percent Employer contribution.