It’s often said that hard work goes a long way. Throughout the years, you’ve worked tirelessly and prepared yourself for what is now seemingly right around the corner: your retirement. But what comes next, and how can you be adequately prepared for your retirement and pension plan in the state of Rhode Island?
To answer these questions and more, let’s look at some of the most important pension and retirement law facts in Rhode Island you don’t want to go without.
- Some Workers May Be Required to Become Members of the Employees’ Retirement System of Rhode Island (ERSRI)
One of the first things you should know about retirement in Rhode Island is that your job likely has unique retirement and pension protocol to consider. For instance, if you are a state employee, public school teacher, correctional officer, behavioral healthcare specialist, registered nurse, municipal employee, MERS Police and Fire, state police officer, or judge, you are required to become a member of the Employees’ Retirement System of Rhode Island as a condition of your employment.
According to NASRA, “ERSRI provides retirement, disability and survivor benefits to state employees, public school teachers, judges, state police, participating municipal police and fire employees, and general employees of participating municipalities. Retirement eligibility and benefits are governed by Titles 16, 28, 36, 42 and 45 of the Rhode Island General Laws.”
- Pension Vesting Can Happen Immediately or Over a 7-Year Period
According to Investopedia, “Pension vesting for defined-benefit plans can occur in a variety of ways. Your benefits can vest immediately, or vesting can be spread out over up to seven years. It’s important to understand how your pension vests because the vesting schedule determines when you are eligible to receive full pension benefits.” ERSRI does not vest until after 10 years.
Every job you’ve chosen matters and can affect your pension vesting. As such, you will want to consider whether or not you were fully vested when you moved from one position to another throughout your lifetime.
- There Is a Difference Between Cliff and Graduated Vesting
The form of vesting your company chooses determines when your full pension is vested and ready to be utilized. With cliff vesting, you are fully vested within five years of service. In some cases, this can also be when you reach 65, whichever comes first. This means that you are not fully vested in your pension until that 5-year period is up, though your contributions are still fully vested.
On the other hand, with graduated vesting, the first three years mean nothing, and you become 20 percent vested every year after that initial 3-year period. As such, you are only fully vested once you reach the seventh year of service.
- Your Age and Years of Service Determine When You Can Retire
In the state of Rhode Island, there are several options for retirement based on age versus the years of service you have completed. Essentially, you can retire if you are age 65 with 30 years of service, 64 with 31 years of service, 63 with 32 years of service, or 62 with 33 years of service. You may retire earlier if your RIRSA date is sooner or if you were eligible under a transition rule.
It is essential that you keep track of your service years, your pension, and your age throughout these years to ensure that your retirement process runs smoothly.
- Members of Fifty Municipal (MERS) Pension Plans Will Receive a Cost-of-Living Adjustment (COLA) in 2019
According to the Employees’ Retirement System of Rhode Island, “All members of these 50 plans who retired before June 30, 2012 and were previously receiving or eligible for a COLA will receive a COLA beginning the month following their retirement date in 2019.”
This means that the COLA revisions made in 2012 will be fully amended and you will receive a cost-of-living adjustment settlement of sorts. If you have not received this yet, it may be time to look into this with a local qualified pension and retirement law attorney.
If you are interested in working with one in the state of Rhode Island and need help with your retirement and pension, contact the Law Offices of Howe and Garside today! We have years of experience in this field and know just how to get the most out of the next chapter in your exciting life.