Authorizes an annual two and one-half percent (2.5%) escalation for all active and retired police and firefighter's retirement pension allowance, compounded each year on January 1 following the year of retirement and continuing yearly, on that date.

Plain-English Summary

This bill would give retired police officers and firefighters in Rhode Island an automatic annual raise in their pension payments. Specifically, their pension benefits would increase by 2.5% each year, and this increase would be compounded — meaning each year's raise is calculated based on the already-increased amount from the previous year, not just the original pension amount. These increases would take effect every January 1st, starting the year after a person retires.

The bill applies to both current retirees who are already receiving pension benefits and active police officers and firefighters who will retire in the future. For retirees, this kind of annual increase — often called a cost-of-living adjustment — is meant to help their pension income keep up with rising prices over time. Without such a provision, a pension payment that was adequate at retirement could gradually lose purchasing power as everyday costs go up.

The bill is currently in the early stages of the legislative process, having been referred to the Senate Finance Committee, which will review its potential costs and impact on Rhode Island's municipal budgets. Local governments — cities and towns — that operate pension plans for their police and fire departments would likely be responsible for funding these annual increases, which could have financial implications for those municipalities over time.