SB387 Alabama 2016 Session

Summary

Primary Sponsor

Larry StuttsSenator

Republican

Session

Regular Session 2016

Title

Retirement Systems of Alabama, certain provisions of the Alabama Uniform Trust Code to apply to Boards of Control, Secs. 16-25-19, 16-25-20, 36-27-23, 36-27-25 am'd.

Summary

SB387 applies specified governance provisions of the Alabama Uniform Trust Code to the Boards of Control of the Teachers’ Retirement System and Employees’ Retirement System, changing how they are run and how they manage funds.

What This Bill Does

It amends Sections 16-25-19, 16-25-20, 36-27-23, and 36-27-25 to specify governance rules for the Boards of Control of TRS and ERS. The bill redefines board composition to include ex officio members plus twelve elected trustees from defined categories, with statewide, third-party–conducted elections. It creates vacancy rules, oath requirements, and voting thresholds, and it authorizes the boards to adopt rules, elect leadership, and hire actuarial and administrative staff as needed. It strengthens investment oversight with an investment committee and consultants, requires regular reporting and open records, and applies the Uniform Trust Code to board actions, along with actuarial oversight, medical review, and routine valuations.

Who It Affects

• Members and beneficiaries of the Teachers’ Retirement System and Employees’ Retirement System who will participate in elected representation and governance of their boards.
• The TRS and ERS funds and their operations, including investment management, accounting, reporting, and administrative procedures, which will be governed by new rules and oversight structures.

Key Provisions

• Applies specified governance provisions of the Alabama Uniform Trust Code to the Boards of Control of the Teachers’ Retirement System and Employees’ Retirement System.
• Redefines TRS Board of Control as 15 trustees (ex officio members plus 12 elected trustees from defined categories) and sets election procedures conducted by a third party; similar governance provisions apply to ERS with its own board structure.
• Establishes vacancy rules (TRS vacancies filled by the Governor; ERS vacancies filled by the ERS Board from a list of retired employees) and requires trustees to take an oath within 10 days of appointment.
• Requires a voting framework (TRS requires eight votes for decisions; ERS requires seven) and authorizes the board to adopt rules, appoint leadership (TRS Secretary-Treasurer; ERS Secretary-Treasurer as determined by the board), and hire necessary staff and consultants.
• Creates an Investment Committee (three board members, including the Director of Finance for ERS) and authorizes engagement of a consultant bank; assigns oversight responsibilities to the Secretary-Treasurer for investment activities with semiannual reporting.
• Grants the boards authority to invest and manage funds with prudent investment standards, including specified asset classes and risk considerations, and sets parameters for managing investment of funds.
• Imposes regular interest credits to the funds within specified ranges (minimum 3%, maximum 4.75%), with distributions to and from the State Treasury as part of fund handling and expense funding.
• Requires annual public records, financial reporting, and actuarial valuations; designates legal and medical oversight (Attorney General as legal adviser; a medical board for disability determinations) and regular actuarial investigations and tables.
• Requires compliance with the Uniform Trust Code provisions governing board actions and imposes conflict-of-interest protections for trustees and staff.

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