HB437 Alabama 2019 Session

Updated Feb 26, 2026

Notable

Summary

Primary Sponsor: Reed IngramRepresentative
Republican
Session: Regular Session 2019
Title: Retirement, RSA, ERS, Tier III Retirement plan created, plan benefits defined, Secs. 36-26-36.1, 36-27-1, 36-27-16, 36-27-24, 36-27-59 am'd.
Summary: HB 437 creates a new defined-benefit retirement plan (Tier III) for public employees hired on or after October 1, 2020, and allows eligible Tier II members to join, with updated rules for sick-leave credit, benefits, and funding.
What This Bill Does
It establishes and defines the new Tier III plan and the option for Tier II members to move into it; it amends several retirement sections to implement the new plan, set eligibility and benefit formulas by tier, and governs how benefits are calculated, how disability and survivor benefits work, and how retirement funding is shared through the Annuity Savings Fund, Pension Accumulation Fund, and Expense Fund. It also allows certain sick-leave to be converted into service credit (for Tier I and Tier III if the employer agrees), sets contribution rates for members and employers by tier, and retains medical examinations and other protections for disability beneficiaries.

Who It Affects
Public employees hired on or after October 1, 2020 by ERS-participating employers would be eligible for the new Tier III defined-benefit plan.
Tier II plan members who elect to join the new Tier III plan would transition to the new plan's benefits and funding rules.
Employers participating in the Employees' Retirement System would implement the new plan's funding structure and opt-in provisions for sick-leave credit conversions.
Current retirees and disability beneficiaries would be governed by updated tier-based rules for disability, survivor benefits, and medical reexaminations.

Key Provisions
Creates Tier III as a defined-benefit retirement plan for new hires on or after 10/01/2020 or Tier II members who elect to join the new plan.
Amends Sections 36-26-36.1, 36-27-1, 36-27-16, 36-27-24, and 36-27-59 to implement the new plan and define tier-specific terms and benefits.
Allows eligible Tier I or Tier III members to convert up to 180 accrued sick leave days into membership service for creditable service, if the employer elects to come under these provisions; conversion used for service retirement eligibility, not for deferred retirement, and not for Tier II.
Establishes a three-fund funding structure (Annuity Savings Fund, Pension Accumulation Fund, Expense Fund) and sets employer and member contribution rates, including Tier III contributions at 7.5% of earnable compensation (with certain categories having different rates).
Preserves and outlines tier-specific retirement and disability benefits, survivor benefits, medical examination requirements, and optional retirement elections under the new framework.

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