HB508 Alabama 2012 Session

Summary

Primary Sponsor

Mac McCutcheon

Republican

Co-Sponsor

Jamie Ison

Session

Regular Session 2012

Title

Retirement, Teachers (TRS) and State Employees (ERS), new defined benefit plan for persons entering TRS and ERS on or after January 1, 2013; contributions, minimum retirement ages, and benefits provided, Secs. 16-25-1, 16-25-3, 16-25-11.1, 16-25-14, 16-25-21, 36-26-36.1, 36-27-1, 36-27-4, 36-27-16, 36-27-24, 36-27-59 am'd

Summary

HB508 creates a new defined-benefit retirement plan for Alabama public employees hired on or after January 1, 2013, with two tracks (Tier I and Tier II) and required employee contributions.

What This Bill Does

The bill establishes a new defined-benefit retirement plan for public employees who first become members on or after the act’s effective date and assigns them to Tier I or Tier II based on prior service. It requires those employees to contribute a portion of their salary into the new plan and sets minimum age and service requirements for retirement under the new plan. It also reorganizes funding into three funds and designates the Retirement Systems of Alabama (RSA) to administer the plan, with rates and costs determined by actuarial valuations and paid by both employees and employers.

Who It Affects

• Public employees hired on or after January 1, 2013 by TRS/ERS-participating employers, who would enter the new Tier I or Tier II defined-benefit plan and make scheduled salary contributions.
• Employers (schools, state agencies, universities, etc.) and the Retirement Systems of Alabama responsible for funding and administering the new plan, including collection of employee contributions and funding through the Annuity Savings Fund, Pension Accumulation Fund, and Expense Fund.

Key Provisions

• Establishes a new defined-benefit retirement plan for public employees who first become a member on or after January 1, 2013, with Tier I for those with prior TRS/ERS service and Tier II for those with no prior service.
• Requires employee contributions to the new plan (approximately 7.5% for Tier I and 6% for Tier II of earnable compensation, with rates set by actuarial valuations) and creates separate funding structures (normal contributions and accrued liability contributions).
• Creates three funds—Annuity Savings Fund, Pension Accumulation Fund, and Expense Fund—to manage retirement benefits and specifies how contributions and investments are handled, including monthly transfers and annual valuations.
• Sets retirement eligibility and ages under the new plan (generally age 60 for Tier I and age 62 for Tier II, with disability retirement and other provisions) and provides for administration by RSA and the Board of Control in conjunction with actuarial determinations.

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

Subjects

Retirement