HB338 Alabama 2017 Session

Summary

Primary Sponsor

Allen TreadawayRepresentative

Republican

Session

Regular Session 2017

Title

Birmingham, Firemen and Policemen's Supplemental Pension System, percent of investments in fixed income securities lowered, Sec. 45-37A-51.03 am'd.

Summary

HB338 lowers the Birmingham Firemen's and Policemen's Supplemental Pension System's fixed-income minimum and reshapes its board and investment rules.

What This Bill Does

It sets the minimum fixed-income investment at 12.5% of the fund's value (down from the prior level). It changes the board to five members with specific roles and election rules, including a firefighter, a police officer, a retiree, and a Jefferson County appointee. It broadens investment options to include many asset classes while requiring investments to be SEC-registered or traded on recognized markets and capping any single nonguaranteed entity at 10% of the fixed-income allocation. It specifies how funds are transferred to the General Retirement and Relief System when retirees begin benefits, based on what would have been contributed if they had continued to work to 30 years. The act takes effect immediately after governor approval.

Who It Affects

• Active firefighters and police officers who participate in or retire from the Birmingham system, because the board composition and investment rules directly affect how their fund is managed and how benefits are funded.
• The City of Birmingham and Jefferson County government entities (including the Jefferson County Personnel Board) that administer the pension system and handle inter-system funding transfers.
• Retirees in the system are affected by governance changes and the funding transfer provisions when benefits start.

Key Provisions

• Amends Section 45-37A-51.03 to reduce the minimum fixed-income allocation for the system to 12.5% of the fund's fair market value.
• Establishes a five-member board (city president as chair; four associate members) with detailed appointment and election rules: Member No.1 appointed by the Jefferson County Personnel Board; Member No.2 a firefighter participant; Member No.3 a police officer participant; Member No.4 a retiree with eligibility rules and rotating eligibility between fire and police retirees.
• Board meetings are set for the second Wednesday of each month (with flexibility if no business) and a secretary from the Jefferson County Personnel Board; three members constitute a quorum; no compensation for secretary or board members.
• Investment authority covers a wide range of assets (bonds, stocks, mutual funds, REITs, international and private investments, derivatives, etc.) and requires investments in fixed income or equity to be registered with the SEC or traded on NASDAQ, or through Rule 144A or organized exchanges; direct investments in real estate are excluded.
• No single nonguaranteed agency or entity may represent more than 10% of the fixed-income allocation at purchase time.
• The board must transfer funds to the General Retirement and Relief System equal to the deductions the city would have made plus the matching city contributions, for a period corresponding to 30 years of service if the participant had continued working.
• Effective immediately upon the 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

Birmingham