HB446 Alabama 2020 Session

Summary

Primary Sponsor

Joe LovvornRepresentative

Republican

Session

Regular Session 2020

Title

Education Retirees' Trust Fund Funding Act, Education Retirees Trust Fund created in State Treasury as permanent trust to fund periodic bonus checks for education retirees, duties of TRS Board of Control specified

Summary

HB446 would create an irrevocable Education Retirees' Trust Fund in the State Treasury to provide periodic bonus checks to education retirees, managed by the Teachers' Retirement System Board of Control.

What This Bill Does

It establishes a permanent trust and investment account in the state treasury to fund periodic bonus checks for retirees and their beneficiaries. The trust is managed by trustees who can invest funds, enter contracts, hire staff, and pay administrative expenses and bonuses. It must be funded from sources other than the Education Trust Fund, and if assets exceed $100 million and are sufficient to fund bonuses, those assets may be transferred to the Teachers' Retirement System to pay bonuses; the assets are protected from taxation and creditors. The act also sets rules for amendments, reporting, and compliance with tax and accounting standards, without creating new guaranteed rights to bonuses beyond those in the pension plan.

Who It Affects

• Education retirees and their beneficiaries — would receive periodic bonus checks funded by the new trust, per the pension system's provisions.
• Teachers' Retirement System Board of Control and trustees — would create, manage, invest, and operate the irrevocable trust and determine distributions to fund bonuses.

Key Provisions

• Creates the Education Retirees' Trust Fund in the State Treasury as an irrevocable trust to fund periodic bonus checks for education retirees and their beneficiaries.
• The Trust Fund is managed by trustees (the Board of Control) who may adopt rules, enter contracts, hire staff, and invest funds, with expenses payable from the trust.
• Funding must come from sources other than Education Trust Fund revenue, including investment income, gifts/grants, and legislatively directed revenues; assets cannot be appropriated by the Legislature.
• If actuary certifies assets exceed a $100 million minimum and are sufficient to fund bonuses, those assets may be transferred to the Teachers' Retirement System to fund periodic bonuses.
• Assets and income of the trust are tax-exempt, not subject to creditors or execution, and provide for annual GAAP-based financial statements and audits.
• The act may be amended under specified circumstances (tax considerations, post-employment benefits accounting, or court approval) to further its purposes.
• The trust is not intended to grant new rights to periodic bonuses beyond those already provided by the pension plan, and rights remain governed by the plan.
• Section 10 requires diversity in personnel and vendors associated with the trust fund.

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

Subjects

Education Retirees' Trust Fund Funding Act