HB134 Alabama 2022 Session

Summary

Primary Sponsor

Alan BakerRepresentative

Republican

Session

Regular Session 2022

Title

Teachers Retirement System, 30-year service retirement, member contribution rate increased, Secs. 16-25-14, 16-25-21 am'd.

Summary

HB134 adds a 30-year service retirement option for Tier II teachers in Alabama and updates retirement benefit calculations and funding requirements.

What This Bill Does

The bill allows Tier II Teachers' Retirement System members to retire after 30 years of creditable service, with an early-retirement reduction if they retire before age 62. It specifies the retirement benefit formula for Tier II as an annuity plus a pension equal to 1.65% of average final compensation times years of creditable service, with a cap at 80% of AFC and a 2% per year reduction for retirement before age 62 when applicable. It preserves existing retirement and survivor benefit provisions and death/benefit options while updating funding and contribution rules for the system. It also changes how employer and member contributions are calculated and collected, and requires salary reporting by involved educational boards and institutions, with the act taking effect immediately upon passage.

Who It Affects

• Tier II plan members of the Teachers' Retirement System: gain a 30-year service retirement option with a defined benefit formula and potential early-retirement reductions.
• School districts, state boards, and higher education institutions: subject to updated contribution rates and reporting requirements for funding the retirement system.

Key Provisions

• Section 16-25-14(a)(4) adds a 30-year service retirement option for Tier II members (with eligibility conditions and a 30- to 90-day retirement window) and maintains other withdrawal and eligibility rules.
• Section 16-25-14(b)-(d) establishes the Tier II retirement benefit: an annuity equal to accumulated contributions plus a pension equal to 1.65% of average final compensation times years of service, capped at 80%, with a 2% annual reduction for 30-year Tier II retirees before age 62.
• Disability and survivor benefits are retained with detailed provisions for how benefits are calculated and adjusted, including election of retirement options (Options 1-5) and lump-sum considerations.
• Section 16-25-21 introduces funding and contribution changes: tier-specific employer and member contribution rates for the Annuity Savings Fund and Pension Accumulation Fund across multiple years (with increases for Tier II and special rates for certain protective classifications), plus salary reporting requirements for boards and institutions.
• The act becomes effective immediately upon the Governor's 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

Teachers' Retirement System