Rhode Island Code of Regulations
Title 120 - Treasury Department
Chapter 00 - N/A
Subchapter 00 - N/A
Part 1 - Employees' Retirement System of Rhode Island and Municipal Employees' Retirement System Regulations
Section 120-RICR-00-00-1.1 - General Administrative Rules of the Retirement Board

Universal Citation: 120 RI Code of Rules 00 00 1.1

Current through December 26, 2024

The Rules and Regulations published herein have been adopted by the Employees' Retirement Board pursuant to statutory authority found in R.I. Gen. Laws § 36-8-3. This manual is not a substitute for the General Laws nor will its Rules prevail should a conflict arise between this manual and R.I. Gen. Laws Titles 16, 36 and 45. Finally, Rules governing retirement are subject to change periodically either by statute of the Rhode Island Legislature or by Regulation of the Employees' Retirement Board of Rhode Island.

1.1.1 General

A. Definitions
1. "Board" or "board" means the independent Retirement Board created by R.I. Gen. Laws Chapter 36-8.

2. "Member" means a member of the independent Retirement Board created by R.I. Gen. Laws Chapter 36-8.

3. "Fiduciary" means any person who exercises any discretionary authority or discretionary control respecting management of the funds of any retirement system managed or administered by the Retirement Board, or who exercises any authority or control respecting management or disposition of its assets, including, without limitation: any retirement board member, alternate member, or any retirement board staff member who exercises such authority or control.

4. "Alternate member" means an individual who is a designee of a "member", who is sworn in by the Board to either serve on the Board as provided by R.I. Gen. Laws § 36-8-4 or a Committee as provided by §1.1.1(K) of this Part, when a member is unable to participate. The alternate member possesses all the powers and responsibilities of the member. All existing provisions of law and ERSRI regulations relating to fiduciary duty, training, continuing education, attendance, conflict of interest, eligibility and removal shall apply to alternate members in the same manner as they apply to members. The alternate member's designation must also be entered into the minutes of the board or Committee meeting at which the designation is made.

B. Creation and Purpose
1. There is created an Employees' Retirement System of the State of Rhode Island, and a Municipal Employees' Retirement System of the State of Rhode Island, for the purpose of providing retirement, survivor and disability benefits for State employees, public school teachers and participating municipal employees. The systems are governed and administered by the Retirement Board, which is chaired by the General Treasurer.

2. Statutory References: R.I. Gen. Laws §§ 36-8-2, 36-8-3; 36-8-4, 36-8-4.1, 45-21-32, 45-21.2-1 et seq., and 16-16-1et seq.

C. Membership
1. The Board is authorized, created and established in the office of the general treasurer as an independent retirement board which shall hold and administer, in trust, the funds of the Retirement Systems in accordance with, and as authorized by law.

2. The board is composed of fifteen members in accordance with State law who by virtue of their duties are to be considered fiduciaries of the system. The membership of the retirement board shall consist of:
a. The general treasurer or their designee who shall be a subordinate within the general treasurer's office;

b. The director of administration or their designee who shall be a subordinate within the department of administration;

c. A representative of the budget office or their designee from within the budget office, who shall be appointed by the director of administration;

d. The president of the league of cities and towns or their designee;

e. Two (2) active State employee members of the retirement system or officials from State employee unions to be elected by active State employees;

f. Two (2) active teacher members of the retirement system or officials from a teachers union to be elected by active teachers;

g. One (1) active municipal employee member of the retirement system or an official from a municipal employees union to be elected by active municipal employees;

h. Two (2) retired members of the retirement system to be elected by retired members of the system;

i. Four (4) public members, all of whom shall be competent by training or experience in the field of finance, accounting or pensions.

3. Statutory References: R.I. Gen. Laws § 36-8-4

D. Board Terms
1. Two (2) of the public members shall be appointed by the Governor, one (1) of whom shall serve an initial term of three (3) years and one (1) of whom shall serve an initial term of four (4) years and until their successor is appointed and qualified.

2. Two (2) of the public members shall be appointed by the General Treasurer, one (1) of whom shall serve an initial term of three (3) years and one (1) of whom shall serve an initial term of four (4) years and until their successor is appointed and qualified.

3. Thereafter, the term of these four (4) public members shall be for four (4) years or until their successors are appointed and qualified.

4. Ex-officio members serve until such time as their successors are appointed and qualified. Subject to §§1.1.1(D)(1) and (2) of this Part above, all appointed members serve a term of four (4) years or until such time as their successors are appointed and qualified. The term of office for elected members shall be for four (4) years, and election of their successors shall be administered by the board prior to the expiration of the terms of the incumbent elected members.

5. Statutory Reference: R.I. Gen. Laws § 36-8-4

E. Board Authority and Duties
1. The board shall:
a. Oversee and be responsible for the proper operation of the Retirement System, including strategic planning and enterprise risk management;

b. Establish all Rules and Regulations for the administration of the system;

c. Appoint the Executive Director, who shall serve at its pleasure, establish goals for and evaluate the Executive Director, and make recommendations as to the compensation of the Executive Director;

d. Approve and subscribe to the code of Fiduciary Responsibility as outlined in these Rules;

e. Approve all applications for ordinary and accidental disability retirement;

f. Rule on administrative decisions as provided for in § 1.4 of this Part;

g. Approve submission to the Governor on or before December 1st of each year, an annual financial report for the prior fiscal year;

h. Rule on any negotiated agreement entered into after June 1, 1992, between any State or municipal agency or department and an employee or employees, whose conditions are contrary to the General Laws or the Rules, Regulations, and policies as adopted and promulgated by the retirement board and shall be null and void unless and until approved by formal action of the retirement board for good cause shown;

i. Oversee and approve the securing of the services of an actuary and physicians;

j. Approve actuarial policies (including expected rate of return);

k. Approve the assumptions for the yearly preparation of an actuarial valuation;

l. Monitor interaction between actuarial assumptions and investment practices;

m. Approve a yearly budget of the retirement system, excluding those monies allocated for Treasury personnel assigned to the retirement system;

n. Review yearly audits of the retirement system;

o. Designate such subcommittees as may be necessary to carry out the duties and obligations of the Board;

p. Oversee communications with System participants, employers and other stakeholders;

q. Approve topics for board discussion with the State Investment Commission; and

r. Monitor litigation and legal issues involving the Board.

s. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4, 36-8-4.1, 36-8-8, 36-8-9, 36-8-10, 36-8-19

2. The Board has retained the authority described above unless such authority has been delegated to subcommittees or the Executive Director. Regarding Board delegation of authority, the following definitions shall apply:
a. "Conduct" "Appoint," "Designate" or "Rule" when ascribed to the Board, mean that the Board performs the task described.

b. "Approve" or "Set," when ascribed to the Board, mean that the Board retains final decision authority on prudently delegated activities to approve or set policies and limits. Once approved, the Board must then oversee to ensure that actual practice reflects the Board's policies.

c. "Oversee," when ascribed to the Board, means that the Board has a minimum legal duty to monitor and question. The Board reserves with power (with Committee assistance) to oversee that prudently delegated authorities are properly exercised, appropriate policies and controls are in place and delegates are held accountable for performance. "Oversee" does not constitute close supervision and day-to-day management.

F. Retirement Board Attendance
1. Board members, elected or appointed, shall be required to attend a minimum of two thirds (2/3) of regularly scheduled meetings on a calendar basis, to be evaluated at the annual meeting. Excused absences shall be granted under the following conditions:
a. The member has notified the Executive Director at least ten (10) business days before the scheduled meeting;

b. The member is involved in an emergency beyond their control; or

c. The member contracts an illness the day of the meeting and notifies the Executive Director before the start of the meeting.

d. The member count of absences will not be on a cumulative basis. The attendance requirement shall separately apply to the meetings of the Retirement Board, and to the meetings of any Committee that the member serves on, e.g., members are expected to attend a minimum of two thirds (2/3) of regularly scheduled monthly Retirement Board meetings, and two thirds (2/3) of the regularly scheduled meetings of any Committee the member may serve on.

e. If a Board member does not meet the attendance standard, either with respect to attendance at Board meetings or attendance at Committee meetings, the Board shall direct the Executive Director to put the member on official notice of the excessive absenteeism, and will take the following actions for a first (1st) offense:
(1) The Executive Director shall furnish the Board with a schedule of attendance of the affected member at the annual meeting, as of the annual meeting.

(2) Upon review, the Board will officially notify the member in writing of the excessive absenteeism. The official notification shall state the members' deficient attendance record, and shall direct the member to comply with the attendance standard for the following year.

2. The official notification shall also state that if the member does not comply with the attendance standard during the next year, the Board will seek to notify either the appointing authority or constituent body, whichever is applicable, of the deficiency in attendance.

3. If a member has a second (2nd) offense, the Board shall again officially notify the member in writing of the excessive absenteeism. The official notification shall state the members' deficient attendance record and shall direct the member to comply with the attendance standard. Additionally, the Board shall direct the Executive Director to notify either the appointing authority or constituent body, whichever is applicable, of the continuing deficiency in attendance.

4. With respect to public members, continued unexcused excessive absenteeism shall be considered cause for removal by the Chair under R.I. Gen. Laws § 36-8-4(e).

5. Statutory Reference: R.I. Gen. Laws §§ 36-8-2; 36-8-3 and 36-8-4

G. Reimbursement of Board Expenses
1. Board members may be reimbursed for special expenses incurred as a result of their membership on the board, but may not be reimbursed for travel to and from all regular meetings of the Board or its Subcommittees.

2. Statutory Reference: R.I. Gen. Laws § 36-8-7

H. Board Education and Professional Development
1. The Retirement Board's education policy shall be established and updated from time to time, as deemed necessary and appropriate by the Retirement Board Governance Committee with approval of the Retirement Board. Such education shall be required of all members and alternate members of the Board and its subcommittees. The Executive Director shall implement the policy and develop a budget as directed by the Governance Committee, with approval of the Retirement Board. The Executive Director shall maintain a list of selected conferences and workshops that will increase understanding of public pension administration and the Board members' roles as fiduciaries of the Retirement System.

2. Board members shall be reimbursed for necessary expenses incurred as a result of attendance at such approved conferences or workshops, but in no event shall expenses in excess of one thousand five hundred dollars ($1,500.00) per fiscal year per member be considered necessary, unless advance approval is obtained from the Board Chair.

3. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4.1 and 36-87

I. Duties of the Executive Director
1. The Executive Director shall:
a. Be in charge of administration of the Retirement System, and shall serve as secretary to the Retirement Board;

b. Be responsible for the formulation of a monthly agenda and board minutes;

c. Be responsible for the day-to-day administration of the retirement system including the promulgation of administrative decisions;

d. Submit to the Board for its approval an annual budget for the administrative operation of the retirement system;

e. Provide an organizational chart of the retirement system to the board;

f. Make available to the Board the findings of all external and internal audits of the Retirement System;

g. Secure the services of a medical advisor and such physicians, as required, to conduct medical examinations as required by law or as requested by the Retirement Board or the Disability Committee;

h. Secure the services of lawyers, as necessary, to serve as hearing officers in conjunction with § 1.4 of this Part;

i. Represent the system as necessary before the Legislature and the State Investment Commission (SIC);

j. Represent the system and the State of Rhode Island within the National Association of State Retirement Administrators and other national public retirement organizations;

k. Appoint an Assistant Executive Director, who shall serve at the pleasure of the Executive Director; establish goals for and evaluate the Assistant Executive Director on an annual basis; and make recommendations as to the compensation of the Assistant Executive Director, all in consultation with the Board prior to any final action;

l. Perform such other duties as assigned by the Board or required by its committees.

2. Statutory Reference: R.I. Gen. Laws § 36-8-9

J. Officers
1. There shall be a Vice Chairperson of the board who shall be elected by the Board membership no later than July of the year following the Board elections. The Vice Chairperson shall serve a four (4) year term.

2. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4, 36-8-9

K. Committees
1. Committee Composition
a. The Board Chairperson, after consultation with the Board, will appoint five (5) board members to each of the standing committees and special committees, and shall serve on all committees ex-officio. The Board Chairperson shall recommend a chairperson for each of the standing committees and special committees, with the advice and consent of the Board. Each committee shall select a Vice Chairperson. The Chairperson shall preside at all meetings. In the absence of the Chairperson, the Vice Chairperson shall preside. All board members except the public representatives will be allowed to send an alternate member to represent themselves on such standing committees, with the exception of the Disability Committee which shall be subject to § 1.9(K) of this Part and to vote provided a written proxy statement has been entered. In the case of all elected members, the alternate member must be a member of the membership group of the elected member. At any time the Board may amend committee charters to increase or decrease the number of members to standing or special committees. For the avoidance of doubt, the terms "Committee" and "committee" are used interchangeably.

b. Committee assignments shall be made no later than July following an election of elected retirement board members. Committee assignments may be made every two (2) years or at other times as deemed necessary by the Board Chairperson.

2. Standing Committees
a. To facilitate the operation of the Board, the following standing committees are established:
(1) Disabilities Committee: The Committee on Disabilities shall review all applications for ordinary and accidental disability allowances, and make recommendations for the disposition of claims, and shall conduct hearings as required.

(2) Governance Committee: The Governance Committee formulates Rules and Regulations that govern the policy, practices, and procedures of the Retirement System, and periodically reviews such; reviews all such recommendations and suggestions regarding amendments to the retirement laws and shall make such recommendations as it deems appropriate, with approval of the Retirement Board, to interested legislators for consideration by the General Assembly; oversees policies and requirements for training and evaluating Board members; and oversees other Board governance matters.

(3) Administration Committee: The Administration Committee shall have those responsibilities as set forth in the Retirement System's Regulations §§ 1.2 and 1.3 of this Part. The Administration Committee shall also assist the Board in fulfilling its oversight responsibilities with respect to procurement, financial planning, budgeting, accounting, business continuity, and information technology and data security. In addition, the Administration Committee is to assist the Board in fulfilling its oversight responsibilities with respect to the financial reporting processes; the system of internal controls; and the internal and external audit processes.
(AA) The Administration Committee's responsibility is one of oversight, recognizing that the System is responsible for preparing the financial statements and that the Auditor General is statutorily responsible for compliance auditing consistent with R.I. Gen. Laws § 36-8-19.

(4) Member Services Committee:

The primary purpose of the Member Services Committee is to assist the Board in fulfilling its oversight responsibilities with respect to retirement benefit administration; retirement system performance; and communications with members, employers and other stakeholders.

3. Committee Authority

The subcommittees shall have such authority as described herein, in their respective Committee charters, and as the Board may determine from time to time. The subcommittees may propose certain actions to the Board for approval but shall not have authority to act on behalf of the Board unless specifically authorized to do so by the full Board. Notwithstanding anything else provided herein, neither the Board nor any Committee shall take any action that is inconsistent with applicable law.

4. Strategic Plan

At least annually, the Executive Director shall lead the Board in developing and/or updating a comprehensive strategic plan which identifies the Board's strategic long and short-term priorities (the "Strategic Plan"). Upon approval of the Strategic Plan by the Board, the Executive Director shall coordinate with the Board and subcommittees to implement the Plan. The Board shall identify reasonable timeframes for completion. The Subcommittee Chairs shall oversee the work identified in the Strategic Plan being conducted by their respective subcommittees.

5. Agenda Calendar

The Executive Director shall collaborate with the Chair and Subcommittee Chairs to develop an annual calendar of Board and Committee meetings (the "Agenda Calendar"). The Agenda Calendar shall identify one (1) time and recurring Board and Committee obligations, including, without limitation, those obligations identified in R.I. Gen. Laws Chapters 36-8 through 36-10, System Regulations, the Strategic Plan, Committee charters and Board policies. The Agenda Calendar shall be annually approved by the Board. The Governance Committee shall generally oversee development and maintenance of the Agenda Calendar.

6. Committee Reporting

Committee Chairs shall report to the Board on Committee deliberations, recommendations, and actions. Committee meeting minutes shall be distributed to all Board Members.

7. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4, 36-8-9, 368-10

L. Special Committees
1. The Board may establish special committees to deal with particular issues as they arise. Any such special committee established by the Board will be discharged once its tasks have been completed. Any Board Member may propose formation of a special committee for the Board's consideration.

2. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4, 36-8-9, 368-10

M. Code of Ethics for Fiduciaries
1. Anyone deemed to be a fiduciary shall subscribe and conform to the following Code of Ethics:
a. Fiduciaries should conduct themselves with integrity and act in an ethical manner in their dealings with the public, retirement board, employers, employees, and fellow fiduciaries.

b. Fiduciaries should conduct themselves and should encourage other fiduciaries to perform their functions in a professional and ethical manner that will reflect credit on themselves and the other fiduciaries.

c. Fiduciaries should act with competence and should strive to maintain and improve their competence and that of other fiduciaries.

d. Fiduciaries should use proper care and exercise independent professional judgment.

e. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4, 368-4.1, 36-8-17

N. Standard of Conduct for Fiduciaries
1. Every fiduciary shall:
a. Discharge their duties for the exclusive purpose of providing benefits to retirement system members and their beneficiaries;

b. Act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims;

c. Operate in accordance with the Rhode Island General Laws on retirement as well as promulgated Regulations by the Retirement Board.

d. No fiduciary shall:
(1) Deal with retirement system assets for their own account or in their own interest;

(2) Act in any manner affecting the Retirement Systems on behalf of any person or organization whose interests are adverse to the interests of the systems, their members or beneficiaries;

(3) Receive anything of value for their own personal account from any person or organization in connection with a transaction involving retirement system assets. A fiduciary who is a member of a retirement system shall not be deemed to have dealt with retirement system assets for their own account, or in their own interest or to have received anything of value for their own personal account, to the extent that the fiduciary derives a benefit as a result of their membership which is not unique and is no greater than the benefit derived by other similarly situated members of the Retirement Systems.

2. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4, 36-8-4.1, 36-8-17

1.1.2 Meetings

A. Meeting Conduct
1. The Board Chairperson will preside at all Board meetings, unless they chooses to relinquish the chair to the Vice Chairperson. In the absence of the Chairperson, the Vice Chair shall assume all of the duties and responsibilities of the Chair. The Chairperson may speak in discussion without relinquishing the Chair and may make motions and vote on all questions put to the members.

2. All meetings of the Board shall be conducted in accordance with R.I. Gen. Laws § 42-46-1, et seq.

3. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-3.1, 36-8-4, 36-8-6.

B. Annual Meeting
1. One (1) Board meeting each year, as designated by the meeting schedule approved annually by the Board, shall be known as the annual meeting of the Board. The Board may change the date of the annual meeting by a majority vote of the members present and voting at a meeting at which a quorum is present, subject to advance notice requirements imposed by R.I. Gen. Laws § 42-46-6.

2. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4

C. Regular Meetings
1. Regular meetings of the Board shall be held on the second (2nd) Wednesday of each month unless re-scheduled by the Chairperson. The Board may change the date of any regular meeting by a majority vote of the members present and voting at a meeting at which a quorum is present, subject to advance notice requirements imposed by R.I. Gen. Laws § 42-46-6.

2. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4

D. Special Meetings
1. Special meetings of the Board may be called upon affirmative vote by a majority of the Board or by the Board Chairperson by written notice to the Board. The date, time, place, and purpose of any special meeting shall be given to every board member at least three (3) days prior to the meeting whenever practicable.

2. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4

E. Meeting Notice, Minutes and Agenda
1. The Executive Director shall cause a notice of each regular or annual Board meeting along with the previous month's minutes, agenda, and draft agendas for any upcoming Committee meeting (subject to §1.1.1(K) of this Part above), to be mailed or made available electronically to each member at least seven (7) days prior to such meeting. Additionally, the Executive Director shall distribute meeting minutes of the Board and any of its Subcommittees to all members of the Board within twenty (20) days of any meeting held whether in draft or final form.

2. Statutory Reference: R.I. Gen. Laws §§ 36-8-2, 36-8-3, 36-8-4

F. Quorum and Decision
1. Each member of the board shall be entitled to one (1) vote. A majority of the board shall constitute a quorum and all actions of the board shall be by a majority vote of the members present and voting at a meeting at which a quorum is present. The board shall keep a record of all the proceedings which shall be open to public inspection.

2. Statutory Reference: R.I. Gen. Laws § 36-8-6

G. Tie Votes
1. In the event of a tie vote of a quorum present and voting on a contested matter, the matter will automatically be placed on the agenda of the next Retirement Board meeting.

2. In the event of a tie vote of a quorum present and voting on a contested matter rescheduled from a prior meeting, the Retirement Board may vote to postpone and re-consider the matter at a subsequent hearing, when a larger number of voting members may be present. If no such vote to postpone and re-consider is taken, or if a vote to postpone and reconsider the matter at a later date fails, the underlying action appealed from will be deemed affirmed.

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