SB290 Alabama 2020 Session

Summary

Primary Sponsor

Cam Ward

Republican

Session

Regular Session 2020

Title

Employees' Retirement System, retirees and beneficiaries, one-time lump-sum additional payment

Summary

The bill would provide a funded one-time lump-sum bonus to certain Alabama Employees' Retirement System retirees and beneficiaries if their employer participates, to be paid in December 2020.

What This Bill Does

It creates a funded one-time lump-sum payment for ERS retirees and beneficiaries who were retired before October 1, 2020 and were receiving monthly benefits as of September 30, 2020, provided their employer participates in ERS. The bonus is calculated as the sum of three parts, with amounts determined by the retiree's annual benefit, retirement date, and years of service; beneficiaries of deceased members/retirees may receive a $300 bonus under certain conditions. Employers must elect to participate by September 1, 2020 and will bear the cost of the lump-sum bonuses, with payments scheduled in December 2020; the act also includes Medicaid-related restrictions and funding mechanics for future employer contributions.

Who It Affects

• ERS retirees and beneficiaries whose employers participate in the Employees' Retirement System and who were receiving a monthly allowance on September 30, 2020 (eligible for a funded lump-sum bonus calculated from three components).
• Beneficiaries of deceased ERS members or retirees (and certain local-government retirees) who meet the specified date and benefit-eligibility conditions and whose employer elects to fund the bonus (eligible for a lump-sum payout, typically $300 for deceased beneficiaries or via the three-component formula for others).

Key Provisions

• Creates a funded one-time lump-sum payment for eligible ERS retirees and beneficiaries in fiscal year 2021-2022, contingent on employer participation.
• Bonus is the sum of three parts: (1) $200 or $100 based on annual retirement benefit; (2) $200 or $100 based on retirement date (pre- or post-2000); (3) $200 or $100 based on 25+ years of creditable service.
• Beneficiaries of deceased members/retirees with death before October 1, 2020 and receiving a monthly allowance on September 30, 2020 may receive a $300 lump-sum, if the employer participates.
• Employers must elect to participate by September 1, 2020; the employer bears the cost of the lump-sum bonuses paid to its retirees/beneficiaries.
• Medicaid-related restrictions apply: individuals whose Medicaid benefits would be impaired by the lump-sum are not eligible for the increase.
• The Board of Control determines the total cost and notifies employers; starting with fiscal year 2021-2022, employers pay the increase in the employer rate through the same payroll process used for active member salaries.
• Lump-sum bonuses funded under the act are paid to eligible recipients by the ERS in December 2020, and the act takes effect immediately upon passage.

AI-generated summary using openai/gpt-5-nano on Feb 23, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Employees' Retirement System