SB120 Alabama 2014 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

Regular Session 2014

Title

Employees' Retirement System and Teachers' Retirement System, part-time service by retirees as independent contractors authorized, written notice to system required, Secs. 16-25-26, 36-27-8.2 am'd.

Summary

SB120 allows certain retirees from Alabama's Teacher and Employees retirement systems to work part time as independent contractors without losing benefits, with employer contributions and required notice.

What This Bill Does

The bill lets retirees from the Teachers' Retirement System and Employees' Retirement System perform part-time postretirement work as independent contractors for employers that participate in the retirement systems without suspending their retirement allowance, as long as the work is not permanent full-time and earnings stay within an annual limit. The employing authority must pay the employer retirement contributions for each retiree, and the retiree must certify required information to the employer and the retirement system. The retiree must provide written notice to the appropriate retirement system within 30 days after learning the work will be full-time or will exceed the earnings limit. There are additional rules for retired elected officials and a transitional provision for contracts entered before the act, with immediate effectiveness upon passage.

Who It Affects

• Retired teachers in the Teachers' Retirement System who may take part-time independent contractor work for employers participating in TRS or ERS, without losing benefits, if limits are met.
• Retired employees in the Employees' Retirement System who may take part-time independent contractor work for employers participating in ERS or TRS, without losing benefits, if limits are met.
• Employing authorities and employers who hire these retirees, who must pay the applicable retirement system employer contributions and ensure compliance.
• Retired elected officials, who may serve in compensated public offices without suspension of retirement benefits, provided they do not accrue both pension and salary and the earnings are within the stated limits.

Key Provisions

• Allows part-time postretirement service by TRS and ERS retirees as independent contractors for participating employers without suspension of retirement benefits, under conditions that the work is not permanent full-time and earnings do not exceed the annual limit.
• Requires the employing authority to pay the employer retirement contributions for each retiree.
• Requires the retiree to provide written notice of the postretirement employment to the appropriate retirement system within 30 days after learning the work will be full-time or the earnings will exceed the limit.
• Establishes an initial annual earnings limit of 17,000 dollars in 2000, with increases each year by the same percentage as CPI and rounded down to the nearest thousand; increases apply to the following calendar year.
• For elected officials who are retirees, allows service without suspension of retirement benefits, but prohibits accumulating pension and salary, and applies the same earning limit conditions as other employees if applicable.
• Includes a transitional provision that prevents enforcement against retirees acting as independent contractors under contracts entered before the act for 180 days after the act's effective date.
• Effective immediately upon passage and approval by the Governor (or otherwise law).

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 Systems