SB72 Alabama 2011 Session

Summary

Primary Sponsor

Del Marsh

Republican

Co-Sponsors

Trip PittmanRusty GloverScott BeasonShadrack McGillBill HoltzclawPhillip W. Williams

Session

Regular Session 2011

Title

Retirement, Deferred Retirement Option Plan, new participation prohibited, limits on interest paid on DROP accounts, Secs. 16-25-150, 36-27-170 am'd.

Summary

SB72 ends new DROP participation, caps interest on existing DROP accounts, and creates a committee to study how to retain Alabama’s top teachers and public employees.

What This Bill Does

The bill prohibits anyone from starting new participation in the Deferred Retirement Option Plan (DROP). It keeps DROP mechanics for those already in or who started before a specified date, but limits how much interest can be paid on DROP deposits. It also creates a six-member Keeping Alabama's Best Joint Interim Legislative Committee on Teacher and Public Employee Retention to study retention strategies and report recommendations that are revenue-neutral or cost-saving, with no compensation for members.

Who It Affects

• Public employees and classroom teachers who would have participated in DROP in the future: new DROP participation is prohibited, effectively stopping new entrants.
• Existing DROP participants or those who began DROP on or before April 1, 2011 (and who fulfill their DROP obligations): interest paid on DROP accounts is capped under the act, and specific rules apply to how that interest is calculated.

Key Provisions

• Amends Sections 16-25-150 and 36-27-170 to prohibit new participation in DROP effective upon enactment and to limit the interest paid on DROP accounts.
• DROP accounts shall earn interest at the same rate as active member accounts, but for certain members the amount of interest payable after the act’s effective date is the lesser of (a) last year’s investment performance (not negative) or (b) the standard DROP interest provision, with details specified in the new language.
• DROP shall not be subject to fees, charges, or similar expenses of any kind.
• Section 2 creates the Keeping Alabama's Best Joint Interim Legislative Committee on Teacher and Public Employee Retention, with six members (three from House, three from Senate, including minority party representation), charged with studying retention and reporting to the Legislature by the fifth legislative day of the 2012 Regular Session, with recommendations limited to revenue-neutral or cost-saving options and no compensation for members.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Retirement