HB581 Alabama 2019 Session

Summary

Primary Sponsor

Chris SellsRepresentative

Republican

Session

Regular Session 2019

Title

Employees' Investment Retirement Plan (EIRP), established for certain TRS and ERS members of RSA

Summary

HB 581 would create an optional Employees' Investment Retirement Plan (EIRP) for certain Tier I and Tier II members of Alabama's Teachers' Retirement System and Employees' Retirement System, allowing deferral of retirement for a defined period in exchange for future benefits.

What This Bill Does

It would establish EIRP as an optional account within TRS and ERS for eligible members. Eligible Tier I and Tier II members can elect to participate for 3 to 5 years, one time only. During participation, 80 percent of the monthly retirement allowance that would have been payable is credited to the EIRP, contributions continue from both employer and employee, and there are forfeiture rules for early voluntary termination. Upon withdrawal or rollover, the member begins receiving the normal retirement benefit and sick leave credits are applied to retirement calculations; participation does not count as service credit.

Who It Affects

• Eligible Tier I and Tier II members of the Teachers' Retirement System and Employees' Retirement System who choose to participate in EIRP
• The retirement systems and employers that would administer EIRP, manage contributions and disbursements, and enforce eligibility and forfeiture provisions

Key Provisions

• Establishes EIRP as an optional account within the Teachers' Retirement System and Employees' Retirement System for eligible Tier I and Tier II members.
• Eligibility criteria: Tier I and Tier II members must meet specified age and years of service to participate (ages and thresholds differ by system).
• Election window: participation can be 3 to 5 years, not to be repeated, with forfeiture rules for voluntary termination within the first three years unless exceptions apply (involuntary dismissal, disability, spouse transfer, or death).
• During participation, 80 percent of the retirement allowance that would have been payable goes into the EIRP; employer and employee contributions continue; employee contributions are not refundable; funds remain part of the regular retirement fund until disbursed.
• Distribution on exit: lump-sum payments or rollover to an eligible retirement plan; monthly retirement benefits begin upon withdrawal, with sick-leave credits applied to retirement calculations.
• Sick leave rules: sick leave cannot be used to establish eligibility or the initial allowance, but can be credited for retirement purposes after withdrawal as allowed by law; conversions limited to applicable laws and days not exceeding those on entry.
• No fees: EIRP cannot have fees or expenses.
• Service credit: time spent in EIRP does not count as Alabama public retirement system service credit; if the member does not withdraw after the period, they resume active contributing membership.
• Cost-of-living adjustments: not available while in EIRP and resume only after withdrawal and satisfying the applicable waiting period.
• Death or disability: if the participant dies or becomes disabled during EIRP, a lump-sum payable to the beneficiary or estate, with potential adjustments for sick leave as allowed by law; certain standard death benefits may not apply during EIRP.
• Effective date: the act becomes effective January 1, 2020.

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