SB394 Alabama 2021 Session

Summary

Primary Sponsor

Greg AlbrittonSenator

Republican

Co-Sponsor

Arthur Orr

Session

Regular Session 2021

Title

State Employee Retirees' Trust Fund Funding Act, State Employee Retirees' Trust Fund created in State Treasury as permanent trust and investment account to fund periodic bonus checks for state employee retirees

Summary

SB394 would create a permanent State Employee Retirees' Trust Fund in the State Treasury to invest money and pay periodic bonus checks to state employee retirees and their beneficiaries.

What This Bill Does

It creates an irrevocable trust called the State Employee Retirees' Trust Fund to hold and invest assets for the purpose of funding periodic bonus checks. It requires funding from sources other than the Education Trust Fund, and the assets and income are protected from tax and creditors. The trust is managed by the Board of Control, which can hire staff, enter contracts, and invest in permitted investments, with annual financial statements and audits required.

Who It Affects

• Retired state employees and their beneficiaries would be eligible to receive periodic bonus checks funded by the new trust, subject to the fund's assets and actuary certification.
• The State Employees' Retirement System and its Board of Control would administer and oversee the trust, including managing investments, governance, and compliance with the act.

Key Provisions

• Creates the State Employee Retirees' Trust Fund in the State Treasury as an irrevocable trust to provide periodic bonus checks to retirees and beneficiaries.
• Funding sources for the trust come from investment income, gifts/grants/contributions, and other non-Education Trust Fund revenues; Education Trust Fund revenues cannot be used.
• Assets are restricted to approved uses: acquiring permitted investments, paying administrative expenses, and providing periodic bonus checks; the Legislature cannot appropriate trust assets.
• Trustees, appointed by the Board of Control, serve without compensation and have immunity from certain suits; they may be indemnified for costs unless due to willful misconduct.
• The trust may invest in permitted investments; the Board can enter contracts, hire staff, and manage the trust, with expenses paid from the trust.
• If actuaries certify the trust assets exceed a $25 million minimum, those assets can be transferred to the State Employees' Retirement System to fund bonuses or increases.
• The trust can be amended for tax advantages, to meet GAAP post-employment benefits standards, or as required by court order.
• Assets and income are tax-exempt and not subject to state creditors or execution; annual financial statements must be audited by an independent firm.
• The act intends to maximize investment earnings while controlling costs and aligning with other post-employment benefit accounting standards.
• The act requires diversity in personnel and vendors reflecting the state's racial and ethnic diversity.
• The act becomes effective on the first day of the third month after passage and governor approval.

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

Subjects

State Employees