HB275 Alabama 2010 Session

Summary

Primary Sponsor

Barbara Bigsby BoydRepresentative

Democrat

Co-Sponsors

Robert BentleyH. Mac GipsonTodd GreesonJeremy OdenJames C. FieldsButch TaylorRichard LindseyJames E. BuskeyJody LetsonYvonne KennedyBetty Carol GrahamRandy HinshawJohn W. Rogers

Session

Regular Session 2010

Title

Teachers' Retirement System, pension accumulation fund, accrued liability contribution rate authorized to be computed by Board of Control over a 30-year period, Sec. 16-25-21 am'd.

Summary

HB275 would extend the funding period used to compute the accrued liability contribution rate for the Teachers' Retirement System from 20 years to 30 years.

What This Bill Does

It amends Section 16-25-21 to allow the accrued liability contribution rate to be calculated over a period not exceeding 30 years, rather than the current maximum of 20. It preserves the three funds (Annuity Savings Fund, Pension Accumulation Fund, Expense Fund) and outlines how employer and member contributions are collected and allocated, including normal and accrued liability rates and how unfunded liabilities are measured. It requires the Teachers' Retirement System to recommend rates for the next fiscal year to the Legislature, which will set those rates in the annual appropriation bill. It also adds reporting requirements for school boards and universities and authorizes the Board of Control to transfer funds or adjust surpluses or deficits among funds as needed.

Who It Affects

• Teachers and other members of the Teachers' Retirement System, whose retirement funding contributions and benefits may be influenced by the longer calculation period and adjustments to contribution rates.
• Employers and governing bodies (local boards of education, State Board of Education, universities, and the Alabama Education Association) who must deduct, report, and remit contributions and may see changes in funding responsibilities and costs.

Key Provisions

• Amends Section 16-25-21 to raise the maximum funding period for the accrued liability contribution rate from 20 years to 30 years.
• Maintains the three funds—Annuity Savings Fund, Pension Accumulation Fund, and Expense Fund—and transfers balances from the former Pension Reserve Fund and Annuity Reserve Fund into the Pension Accumulation Fund.
• Annuity Savings Fund rules: 5% of earnable compensation shall be deducted from members' salaries; the Board can adjust timing/amounts; members are assumed to consent to deductions.
• Pension Accumulation Fund rules: monthly normal contribution and accrued liability contribution are paid into the fund; rates are set by the actuarial valuation and Legislature; unfunded liabilities are defined and funded over a period not less than 10 and not more than 30 years.
• Unfunded accrued liability is calculated using total liabilities not dischargeable by assets and the present value of normal contributions; asset values use market value at June 30, 1997 and five-year smoothed values thereafter.
• Board of Control may transfer surpluses or deficits between the Pension Accumulation Fund and the Annuity Savings Fund as needed to manage funds.
• Death benefit provision: if a member dies with no survivor benefits, a death benefit up to 5,000 may be paid from the Pension Accumulation Fund.
• Reporting requirements: local boards, the State Board of Education, universities, and the Alabama Education Association must file certified statements about members and compensation with the Board of Control; delinquent contributions accrue interest after 30 days.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Teachers' Retirement System