§ 16-7-19.1. Optional incentive plan. (a) Any school committee in a municipality, or regional school district with an elected school committee, may by resolution to the retirement board, and the chief executive officer in any municipality with an appointed school committee may by order to the retirement board, as a result of a bargaining agreement with its teacher employees, accept an incentive plan to provide supplemental payments for teachers who are eligible for a service retirement allowance at the time they retire, or who become eligible for a service retirement allowance subsequent to their retirement, as follows: As an incentive to retire, the school committee shall grant no later than thirty (30) days following retirement a lump sum payment not to exceed one hundred fifty dollars ($150) for each year of service in that community, up to a maximum of thirty (30) years of service.

(b) Each teacher must notify the school committee by July 1 of the year in which they intend to retire. The incentive payment shall be paid to the teacher no later than thirty (30) days following retirement or at the time they become eligible for a service retirement allowance and no retirement contribution shall be made from this payment.

(c) Incentive payments under the plan shall not be included in the final salary of a teacher for the computation of the basic pension due from the retirement plan and the supplemental amount shall be computed as a separate item based on the existing pension formula, including three (3) year average, and the supplemental payment shall then be added to the teacher's basic pension amount.

(d) Supplemental payments under this section shall be applied, in the case of an option, after the option annuity amount is determined, and shall be continued for the lifetime of the teacher only and not to a beneficiary.

(e) Supplemental payments under this section shall not be included in the original pension allowance subject to any cost of living increase provided by § 16-16-40.

(f) The total of all supplemental payments to retired teachers under this section shall be reimbursed to the retirement board by the school districts on a monthly basis. Whenever any amounts due are not paid within thirty (30) days from the date due, the board shall levy regular interest on the payments from date due to date of payment.

(g) Any school committee in a municipality or regional school district with an elected school committee may terminate the optional incentive plan by resolution to the retirement board and the chief executive officer of a municipality with an appointed school committee may terminate the optional incentive plan by order to the retirement board, provided that:

(1) No teacher who retires after the termination of the plan shall be eligible for any incentive or supplemental payments.

(2) Any retired teacher who is receiving supplemental payments prior to the termination of the plan shall continue to receive payments for the remaining lifetime of the teacher, and the school district shall continue to be liable for the reimbursement of the payments to the retirement board as provided in subsection (f) of this section.

History of Section. (P.L. 1981, ch. 162, § 4; P.L. 1983, ch. 289, § 1; P.L. 1986, ch. 432, § 1; P.L. 1987, ch. 368, § 1; P.L. 1988, ch. 84, § 74; P.L. 1988, ch. 129, art. 11, § 1; P.L. 1991, ch. 44, art. 39, § 1; P.L. 2011, ch. 265, § 3.)