HB271 Alabama 2020 Session

Summary

Primary Sponsor

Chris SellsRepresentative

Republican

Session

Regular Session 2020

Title

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

Summary

HB271 would create an optional Employees' Investment Retirement Plan (EIRP) for certain members of Alabama's Teachers' Retirement System and Employees' Retirement System, allowing eligible Tier I and Tier II members to defer retirement and continue working for a set period.

What This Bill Does

It establishes EIRP as an optional account within TRS and ERS for eligible members to contractually defer retirement in exchange for continued employment during a defined participation period. Eligible Tier I and Tier II members may elect to participate in 3- to 5-year increments (one-time, irrevocable). During participation, 80% of the monthly retirement allowance that would have been payable is credited to the EIRP account, while employer and employee contributions continue; time spent in EIRP does not count as service credit. At the end of participation or withdrawal, members can take a lump-sum from EIRP or roll over to an eligible retirement plan, and monthly benefits begin (recalculated for any accrued sick leave); there are rules on sick leave, death benefits, COLA, and fees.

Who It Affects

• Teachers' Retirement System (TRS) members who meet Tier I or Tier II eligibility criteria and choose to participate in EIRP.
• Employees' Retirement System (ERS) members who meet Tier I or Tier II eligibility criteria (including special age rules for state police, firefighters, law enforcement, and related roles) and choose to participate in EIRP.

Key Provisions

• Establishes EIRP as an optional account within TRS and ERS for eligible members.
• Eligibility for Tier I/II participation requires meeting service years (at least 25) and age thresholds (e.g., TRS: 55+ for Tier I, 62+ for Tier II; ERS: 55+ or 52+ for state police, with Tier II at 62 or 56 for specified public safety roles).
• Participation is elected for 3 to 5 years, is irrevocable, and can be used only once per member; voluntary termination in the first three years can forfeit part of the EIRP, with certain exceptions for involuntary dismissal, disability, spouse transfer, or death.
• During participation, 80% of the monthly retirement allowance that would have been payable is deposited into the EIRP account; contributions continue; EIRP funds remain part of the retirement fund for distribution; the employee’s contribution is not refundable.
• EIRP has no fees or charges; participation does not affect other employment rights, leave accrual, or eligible salary increases, and COLA is paused during participation until after withdrawal and a full year of retirement receipt.
• Sick leave cannot be used to establish eligibility or counted in the original allowance, but can be credited or converted to retirement benefits under applicable laws when computing benefits thereafter.
• Upon withdrawal or end of the period, members may take a lump-sum from EIRP or roll over to an eligible retirement plan; monthly benefits begin and may be recalculated for accrued sick leave; time in EIRP does not count as service credit.
• If the member dies or becomes disabled during EIRP, related death/benefit rules apply with lump-sum or continued benefits to a beneficiary or estate, subject to sick leave adjustments; no prior death benefits apply in some ERS/TRS provisions.
• The act takes effect January 1, 2020.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Retirement Systems