HB404 Alabama 2022 Session

Summary

Primary Sponsor

Chris SellsRepresentative

Republican

Session

Regular Session 2022

Title

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

Summary

HB404 would create a funded, one-time longevity bonus for certain Alabama Employees' Retirement System retirees and beneficiaries, with eligibility rules based on retirement dates, employer participation, and funding arrangements.

What This Bill Does

It provides a one-time lump-sum longevity bonus calculated as $2 per month for each year of service for eligible retirees and beneficiaries, with additional setup for specific scenarios. Some groups must have their employers elect to participate in the act and fund the bonus, while others receive the payment automatically if certain dates are met. The bill also sets Medicaid-related limits, how costs are funded by employers, and when payments are distributed (April 2022 generally, October 2022 for certain groups).

Who It Affects

• Retirees of the Employees' Retirement System whose employer did not participate in ERS and who retired before March 1, 2022 and are receiving monthly benefits as of March 30, 2022.
• Beneficiaries of deceased ERS members/retirees whose death occurred under a non-participating employer and who are receiving monthly benefits as of March 30, 2022.
• Retirees/beneficiaries whose employers participated in ERS but elect to come under this act (by Aug 31, 2022) and who are receiving monthly allowances by Sept 30, 2022; the employer bears the cost.
• Retirees/annuitants who retired from a city, town, county, or public/quasi-public organization before that entity joined ERS and who are receiving monthly allowances by Sept 30, 2022, if their local unit elects to fund the bonus.
• Beneficiaries in the above city/town/county/group scenario, who would receive a $300 bonus under certain conditions and only if the local unit funds and confirms years of service.
• Medicaid recipients or applicants whose eligibility would be impaired by the longevity bonus (they would not receive the bonus).
• Employing units (local governments) that participate in ERS and elect to fund the bonuses; they must cover the cost, either in a lump sum or as an increased employer rate starting in FY 2023.

Key Provisions

• Section 1: Establishes a funded one-time longevity bonus for eligible retirees and beneficiaries, with a formula of $2 per month for each year of service (including certain creditable service credits).
• Section 1: Beneficiaries of deceased members/retirees under certain conditions shall also receive a bonus; service credits include state police bonus or hazardous duty credits.
• Section 2: Allows employers who participated in ERS to elect to come under this act by August 31, 2022; if elected, eligible retirees/beneficiaries receive the longevity bonus and the employer pays the cost.
• Section 3: Extends eligibility to retirees/annuitants who retired from certain local entities before joining ERS, and to their beneficiaries, if the local unit funds the bonus and provides years of service; a $300 bonus applies to eligible beneficiaries under specified death/eligibility timing conditions.
• Section 4: Prohibits the bonus if Medicaid eligibility would be impaired by receiving it (or if eligibility becomes impaired after applying).
• Section 5: The ERS Board determines the total cost and notifies each employer; employers must pay the cost either as a lump sum or, in the fiscal year starting Oct 1, 2023, as an increased employer rate funded like salaries.
• Section 6: Payment timing—general eligible recipients are paid in April 2022; those whose employers participate under Sections 2 and 3 are paid in October 2022.
• Section 7: The act takes effect immediately after passage and 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