SB373 Alabama 2014 Session

Summary

Primary Sponsor

Quinton Ross

Democrat

Co-Sponsors

William “Bill” M. BeasleyLinda Coleman-MadisonVivian Davis FiguresTammy IronsPriscilla DunnRoger Bedford, Jr.Hank Sanders

Session

Regular Session 2014

Title

Retirement, DROP reestablished, exceptions, Secs. 16-25-150, 36-27-170 am'd.

Summary

SB373 would reestablish the Deferred Retirement Option Plan (DROP) for teachers and education employees, allow new participation, and remove limits on DROP account interest.

What This Bill Does

It reintroduces DROP for the Teachers' Retirement System and Employees' Retirement System and sets new eligibility criteria and participation terms (3–5 years, one-time participation, 60% of the retirement allowance redirected into DROP, with specific penalties for early withdrawal and post-DROP employment restrictions). It also eliminates caps on DROP interest and replaces them with a new rate structure (the lesser of 2% or the two-year Treasury yield), while maintaining other retirement fund rules such as continued contributions and COLA timing considerations.

Who It Affects

• Members of the Teachers' Retirement System and Employees' Retirement System who meet the eligibility requirements and choose to participate in DROP under the amended rules.
• State Police members covered under the Employees' Retirement System (36-27-170) who meet the eligibility requirements (age 52 or older) and may participate in DROP under the modified provisions.

Key Provisions

• Reestablishes DROP and allows new participation for eligible members, detailing eligibility (25+ years of creditable service and age thresholds), participation periods (3–5 years, irrevocable once started), and post-DROP employment restrictions.
• Removes previous interest caps on DROP accounts and sets the interest rate as the lesser of 2% or the two-year U.S. Treasury note yield, while establishing rules on DROP fees, fund treatment, and COLA eligibility during and after DROP.

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