Transition Rule 1: a reduced pension
You need 20 or more years of service and must be within 5 years of your full-pension date. Handbook, p. 18, Transition Rule 1; Early Retirement Reduction table; R.I. Gen. Laws § 16-16-12(c)(iii)
| Years before your full date | That year's cut | Total cut | Per month, for part of that year |
|---|---|---|---|
| 1 | 9% | 9% | 0.75% |
| 2 | 8% | 17% | 0.667% |
| 3 | 7% | 24% | 0.583% |
| 4 | 7% | 31% | 0.583% |
| 5 | 7% | 38% | 0.583% |
Year 1 is the year just before your full-pension date. The handbook prints the yearly and total columns; the monthly column is from the statute. Handbook, p. 18, Early Retirement Reduction ('Year(s) from full retirement / Percent Reduction / Cumulative Reduction'); R.I. Gen. Laws § 16-16-12(c)(iii) (monthly column)
For a part year we add that year's monthly rate for each leftover month. For example, 18 months early is 9% plus 6 x 0.667% = about 13%. The handbook prints whole years only, and the statute doesn't say exactly how to combine the two columns.
What would settle it: An ERSRI estimate for a part-year early retirement.
If you retire early under Transition Rule 1, your maximum pension (80% or 75%) is reduced too. Handbook, p. 19, note 29
A teacher could retire at 60, a year before her full-pension age of 61. Her pension of $43,128.48 a year (55.25% of $78,060.60) is cut 9% to about $39,246.92. Waiting a year, she'd get $44,787.27 with no cut.
Worked under the 2012 law (1% a year after June 30, 2012).
ERSRI RIRSA Guide (Jan. 2012), pp. 14-15Transition Rule 2: retire on your 2012 date
Transition Rule 2: with 10 or more years of contributory service on June 30, 2012, you may retire at the date you would have had under the laws in effect on June 30, 2012 (not earlier). Your pension then uses only your service and highest average compensation on June 30, 2012; you get no credit for service or pay after that date. Handbook, p. 18, Transition Rule 2; R.I. Gen. Laws § 16-16-12(c)(iv); ERSRI RIRSA Guide (Jan. 2012), p. 14
She could retire at 60 with her June 30, 2012 accrual of 51.25% and her average salary then of $72,115.93: $36,959.41 a year, with no early cut but nothing added for her later years or raises.
ERSRI RIRSA Guide (Jan. 2012), pp. 14-15Not sure which date is your full-pension date? It depends on your schedule. Working longer instead is covered in one more year.
Leaving before you can retire
If you leave after vesting and leave your contributions in, you can start a pension when you reach the eligibility age for your schedule. It does not start automatically: apply, ideally 6-12 months before. There is no retroactive payment; it starts on your eligibility date or the first of the month ERSRI receives your completed application. Leaving right at 5 years? Ask ERSRI for written confirmation that you vested before you terminate. Handbook, p. 33, Deferred Retirement and note 48; R.I. Gen. Laws § 36-10-11
What the handbook says
- Transition Rule 1: with 20 or more years of service you can retire up to 5 years before your full-benefit date, with a permanent cut: 9% for the first year early, 8% for the second, 7% for each of the third, fourth and fifth (9%, 17%, 24%, 31%, 38% in total).Handbook, p. 18, Transition Rule 1; Early Retirement Reduction
- Check with ERSRIFor part of a year, the statute's table also prints monthly rates: 0.75% a month in the year just before your full date, 0.667% in the second year, 0.583% after that. We use those for leftover months.R.I. Gen. Laws § 16-16-12(c)(iii)The handbook prints whole years only, and the statute doesn't say how the two columns combine.
- If you retire early under Transition Rule 1, your maximum pension (80% or 75%) is reduced too.Handbook, p. 19, note 29
- If you leave after vesting and wait until your eligibility age to start, there is no reduction. Apply 6-12 months ahead; the pension never starts on its own and is never paid back to an earlier date.Handbook, p. 33, Deferred Retirement
Questions
How much does retiring early cut an ERSRI pension?
9% for 1 year early, 17% for 2 years early, 24% for 3 years early, 31% for 4 years early, 38% for 5 years early. The cut is permanent.
Who can retire early?
Teachers with 20 or more years of service, within 5 years of their full-pension date. This is called Transition Rule 1.
What is Transition Rule 2?
If you had 10 or more years of contributory service on June 30, 2012, you can retire on the date you'd have had under the law then. Your pension is frozen at your June 30, 2012 service and average salary.
What if I leave before I can retire?
If you are vested and leave your contributions in, you can start a pension at your eligibility age with no cut. Apply 6-12 months ahead. It never starts on its own.
Source: ERSRI Membership and Retirement Handbook, 10th edition, June 2020 (with the 2024 Article 12 changes from the Treasurer's guide, July 1, 2024), pp. 18, 19, 33. Also: Rhode Island General Laws; ERSRI's guide to the Retirement Security Act, Jan. 2012. Last reviewed .