HB466 Alabama 2016 Session

Updated Feb 26, 2026

High Interest

Summary

Primary Sponsor: Phil Williams
Republican
Session: Regular Session 2016
Title: Retirement Systems of Alabama, employees hired after Jan. 1, 2017, required to contribute to individual retirement accounts, opt-out provisions, Sec. 36-27A-5 am'd.
Summary: HB466 would require new public employees hired after January 1, 2017 to contribute to a Public Employees IRA (PEIRAF) with automatic enrollment and an opt-out option.
What This Bill Does
It establishes PEIRAF for public employees and mandates contributions for those hired on or after 1/1/2017. Most new hires would be automatically enrolled and defaulted to contribute 1.5% of pre-tax compensation, but they can opt out within 90 days. Employees may also choose another employer-sponsored deferred compensation plan, with disclosures about fees. Contributions to PEIRAF would be in addition to any existing retirement system contributions, and the rules include optional auto-escalation and board-established guidelines.

Who It Affects
Public employees first employed by a participating employer of the Teachers’ Retirement System, Employees’ Retirement System, or Judicial Retirement Fund on or after January 1, 2017 (except certain college/university employees who participate in TRS/ERS).
Public officials or employees of the State or political subdivisions who are eligible to participate in PEIRAF, and any employer eligible to participate in ERS under the relevant code.
Employers participating in automatic enrollment (and counties in ERS with the higher contribution rate) that choose to participate, subject to the board’s rules.

Key Provisions
PEIRAF is available to public employees who are members of TRS, ERS, or the Judicial Retirement Fund and to other eligible public employees and officials.
New hires after 1/1/2017 shall be automatically enrolled in PEIRAF; there is a 90-day opt-out window and a default contribution of 1.5% of pre-tax compensation.
Employees may opt out, or elect to enroll in another employer deferred compensation plan, with employer disclosure requirements about fees and costs.
Contributions to PEIRAF are in addition to any existing Retirement Systems of Alabama contributions; participation is guided by board rules and IRS provisions for public employee IRAs.
An auto-escalation program may be adopted by the board to increase contributions with salary, and participation in auto-escalation is optional for employers and employees.
Employers must provide written notice to automatically enrolled employees about their right to opt out.

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