HB116 Alabama 2022 Session

Summary

Primary Sponsor

Chris SellsRepresentative

Republican

Session

Regular Session 2022

Title

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

Summary

HB116 would provide a funded, one-time lump-sum payment to certain Employees' Retirement System retirees and eligible beneficiaries in 2022, financed by higher employer contributions.

What This Bill Does

The bill creates a funded one-time lump-sum payment for fiscal year 2021-2022 to retirees whose retirement date is before May 1, 2022 and who are receiving a monthly ERS benefit on April 30, 2022, with an exception for retirees whose employer participated in ERS under Sections 36-27-6, 36-27-7, and 36-27-7.1. The lump-sum amount is $1.25 per month for each year of service attained by the retiree, including service credits such as state police bonus credit or hazardous duty credit. Beneficiaries of deceased members or retirees under the same conditions will also receive a lump-sum. The payment will be funded by employer contribution increases for FY2022, with lump-sums paid in June 2022; Medicaid eligibility rules may exclude some individuals, and the total cost will be addressed in the 2023 State General Fund budget act; the act becomes effective immediately.

Who It Affects

• ERS retirees who retired before May 1, 2022 and were receiving monthly benefits on April 30, 2022 (subject to employer participation exception) will receive a funded lump-sum equal to $1.25 per month for each year of service.
• Employers participating in the Employees' Retirement System will pay higher employer contribution rates in FY2022 to cover the cost of the lump-sum payments.

Key Provisions

• For fiscal year 2021-2022, there is a funded one-time lump-sum payment to eligible retirees who retired before May 1, 2022 and who are receiving monthly ERS benefits on April 30, 2022, except for those whose employer participated in ERS under Sections 36-27-6, 36-27-7, and 36-27-7.1.
• The lump-sum amount is $1.25 per month for each year of service attained by the retiree (including state police bonus or hazardous duty credits).
• Beneficiaries of deceased members or retirees who meet the same conditions will also receive a lump-sum.
• Service credits included for the calculation include regular ERS service plus state police bonus credit or hazardous duty (FLC) credits.
• Medicaid eligibility rules apply; individuals whose Medicaid benefits would be impaired by the lump-sum are not entitled to receive it.
• The ERS Board will determine the total cost and notify employers; for FY2022, employers will pay the increased rate using the same funding source as active member salaries.
• Lump-sums will be paid in June 2022; the act is not an additional appropriation but the cost will be included in the 2023 State General Fund budget act; it becomes effective immediately after passage and governor approval.

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

Subjects

Employees' Retirement System