SB136 Alabama 2015 Session

Summary

Primary Sponsor

Phillip W. Williams

Republican

Session

Regular Session 2015

Title

State Personnel Board, tax deferred annuity and deferred compensation programs, county employees authorized to participate, Sec. 36-26-14 am'd.

Summary

SB136 allows Alabama counties to participate in state-administered tax-deferred annuity and deferred compensation plans, with county approval and safeguards to maintain tax-favored status.

What This Bill Does

The bill lets the State Personnel Board offer deferred compensation plans to state and local government employees, including counties (except county commission employees). Local governments must approve participation before their employees join. Plans may include features that preserve tax-favored treatment (loans, hardship distributions, Roth deferrals, rollovers, etc.). The Board can arrange consolidated billing and services so the plans operate with little or no cost to the State beyond incidental admin expenses. Participation is voluntary through employee payroll deductions, and retirees may have retiree health insurance costs deducted from deferred compensation distributions per IRS guidelines; benefits are supplemental to existing retirement benefits and the plans are trusts created by statute.

Who It Affects

• County employees may participate in the plans if their county or political subdivision approves participation; employees of county commissions are not covered by this bill.
• Public employees who participate or may participate in these plans (including retirees) and the local governments that sponsor them are affected by the ability to participate, payroll deductions, and potential health-insurance cost deductions from distributions.

Key Provisions

• Authorizes the State Personnel Board to adopt and maintain deferred compensation plans for state and local entities, excluding county commission employees; participation by counties requires local approval.
• Plans may include features that preserve tax-favored treatment (loans, hardship distributions, Roth deferrals, rollovers, etc.).
• The Board may arrange consolidated billing and cost-efficient administration so plans operate without cost to the State beyond incidental expenses.
• Participation is voluntary and implemented through employee-written payroll deduction authorizations.
• Participants may elect to deduct retiree health insurance costs from deferred compensation distributions under IRS guidelines.
• Benefits under these plans are supplemental to existing retirement benefits and the plans are trusts created by statute, held for the exclusive benefit of participants and their beneficiaries.
• The act becomes effective immediately after governor's 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