HB655 Alabama 2011 Session

Summary

Primary Sponsor

Mike Hill

Republican

Session

Regular Session 2011

Title

State Personnel Board, adoption of tax deferred annuity and deferred compensation programs for state employees, Sec. 36-26-14 am'd.

Summary

HB655 would authorize the State Personnel Board to adopt tax-deferred annuity and deferred compensation plans for state employees and arrange for cost-efficient administration through the Alabama State Employees Association.

What This Bill Does

It authorizes the State Personnel Board to adopt a plan for tax-deferred annuities and deferred compensation for salaried state employees. The board may include features that keep the plan tax-advantaged under IRS rules, such as loans, hardship distributions, Roth deferrals, rollovers, and service-credit transfers. It allows consolidated billing and administration through ASEA or its designated agent so the plans can operate without cost to the state beyond incidental admin expenses and payroll deduction remittance. Participation is voluntary, with employees authorizing payroll deductions, and plan benefits are supplemental to existing state employee benefits and held in a trust for the exclusive benefit of participants and their beneficiaries.

Who It Affects

• Salaried state employees who may participate in the tax-deferred annuity and deferred compensation plans through voluntary payroll deductions.
• Alabama State Employees Association or its designated agent, which would provide administration, investment services, and trustee/administrative support for the plans.
• State government payroll and financial officials (e.g., Finance Director, Comptroller) responsible for initiating and processing payroll deductions to fund the plans.

Key Provisions

• Authorizes the State Personnel Board to adopt a plan providing tax-deferred annuities and deferred compensation for salaried state employees.
• Permits plan features that maintain tax-favored status under federal law, including loans, unforeseeable emergencies, Roth deferrals, rollovers, transfers to purchase service credit, and distributions to purchase health insurance for a retired officer.
• Allows consolidated billing and efficient investment, trustee, administrative, and professional services through the ASEA or its agent so the plan operates without cost to the State except incidental administration and payroll deduction remittances.
• Participation is voluntary; employees authorize payroll deductions to fund the plans, which are trusts established for the exclusive benefit of participants and their beneficiaries.
• The act becomes effective immediately after governor approval.

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

Subjects

State Personnel Board