SB242 Alabama 2012 Session

Summary

Primary Sponsor

Tom Whatley

Republican

Session

Regular Session 2012

Title

Retirement, Deferred Retirement Option Plan, members in DROP authorized to voluntarily leave service without forfeiting portion of DROP account constituting retirement allowance, interest, or member contributions, Act 2011-27, 2011 Reg. Sess. am'd.; Secs. 16-25-150, 36-27-170 am'd.

Summary

This bill lets DROP participants in Alabama’s retirement systems leave service within the first three years without losing the retirement portion of their DROP account.

What This Bill Does

The bill amends Sections 16-25-150 and 36-27-170 to change the rule for voluntary termination within the first three years in DROP. It states that a member who voluntarily leaves DROP within the first three years will not forfeit the portion of their DROP account that constitutes the retirement allowance. It also specifies that member contributions and any interest tied to the retirement allowance will not be forfeited. Other DROP rules, such as how the account earns interest and how benefits are paid into DROP, remain in effect.

Who It Affects

• DROP participants in the Teachers' Retirement System and Employees' Retirement System who voluntarily terminate within the first three years, who will no longer forfeit the retirement-allowance portion of their DROP account and whose contributions and related interest will be preserved.
• The TRS and ERS administrations/boards that manage DROP, which will implement and enforce the amended rules and maintain DROP accounts accordingly.

Key Provisions

• Amends Sections 16-25-150 and 36-27-170 to remove forfeiture of the DROP retirement-allowance portion for voluntary termination within the first three years of DROP.
• Specifies that member contributions and any interest attributable to the retirement allowance will not be forfeited if a member leaves DROP within the first three years.
• Preserves existing DROP framework (eligibility, election process, effect on benefits and accounts, and other protections) while altering the forfeiture rule.
• Effective date: the act becomes effective immediately after passage and governor's approval.

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