HB190 Alabama 2012 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Mike Hill
Republican
Session: Regular Session 2012
Title: State Personnel Board, adoption of tax deferred annuity and deferred compensation programs for participating employees, Sec. 36-26-14 am'd
Summary: HB190 would let Alabama's State Personnel Board create tax-deferred retirement and deferred compensation plans for state and local government employees, with centralized administration and optional payroll deductions, and allow retiree health insurance costs to be paid from those distributions.
What This Bill Does
Expands eligibility to include employees of counties, cities, towns, and public organizations; authorizes the board to arrange consolidated billing, investments, and professional services through the Alabama State Employees Association with minimal cost to the state. Participation would be voluntary, requiring written employee authorization for payroll reductions. The bill specifies plan features allowed to maintain tax-favored status (loans, hardship distributions, Roth deferrals, rollovers, service credit purchases, etc.) and may permit deducting retiree health insurance costs from deferred compensation distributions for retirees, all while ensuring benefits are supplementary to existing retirement plans and held in trust for participants and their beneficiaries.

Who It Affects
State and local government employees (state employees and employees of counties, cities, towns, or public organizations) who may participate in tax-deferred annuity or deferred compensation plans through voluntary payroll deductions.
Participants receiving monthly benefits from retirement systems (and their beneficiaries) who may have retiree health insurance costs deducted from their deferred compensation distributions, under IRS guidelines.

Key Provisions
Authorizes the State Personnel Board to adopt tax-deferred annuity and deferred compensation plans for state and local government employees and public subdivisions, with provisions to maintain tax-favored treatment (loans, hardship distributions, Roth deferrals, rollovers, service-credit purchases, etc.).
Allows the board to arrange consolidated billing, efficient investments, trustee and administrative services through the Alabama State Employees Association or its agent, with no cost to the State of Alabama beyond incidental administration and payroll remittance.
Participation in the plans is voluntary and requires written employee authorization to reduce cash compensation for the plan.
The Finance Director or appropriate official is authorized to initiate payroll deductions as directed by each employee.
Participants receiving monthly retirement benefits may opt to have retiree health insurance costs deducted from their deferred compensation distributions in accordance with IRS guidelines.
Benefits under these provisions are in addition to other state benefits and the plans are to be administered as trusts for the exclusive benefit of participants and their beneficiaries.
Effective date: immediately following passage and gubernatorial 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