HB534 Alabama 2022 Session

Summary

Primary Sponsor

Parker MooreRepresentative

Republican

Session

Regular Session 2022

Title

Retirement Systems, Employees Retirement System, procedure for funding benefit increases for retirees provided, actual annual cost identified in annual appropriation act

Summary

HB534 would create a pay-as-you-go funding process for annual pension benefit increases for retirees in Alabama's state Employees' Retirement System and Teachers' Retirement System, requiring funding to be identified in yearly budgets and paid only if funded.

What This Bill Does

It requires the actuary-estimated cost of any retiree benefit increase to be included in the annual General Fund Budget Act (state) or Education Trust Fund Budget Act (teachers). If funding isn’t identified, the increase is not paid for that year. The increase is treated as a one-year adjustment and does not affect the systems' unfunded liability. Any new increase must be enacted by a separate legislative act, with funding collected from the covered entities in the same month as the payment.

Who It Affects

• Retired employees of the Employees' Retirement System and Teachers' Retirement System: will receive increases only if the funding amount is included in the annual appropriation acts; otherwise no increase for that year.
• State and local employers and other covered entities that fund ERS and TRS: must provide funding via a separate employer rate; if appropriations do not include the funding, they must transfer the required amount to the respective retirement system, and the increase may be resumed in a future year when funded.

Key Provisions

• Requires actual cost of any retirement benefit increase to be identified in the annual appropriation acts for ERS (General Fund) and TRS (Education Trust Fund).
• If funding is not identified or provided, the benefit increase for that year is not paid.
• Increases are treated as one-year pay-as-you-go adjustments and do not affect the systems' unfunded liability.
• Funding must come from a separate employer rate and be collected in the same month as the increase is paid.
• Local units must follow the same funding process as state employees; actuary provides annual estimates to be included in local funding plans.
• Any new benefit increase requires a separate legislative act to establish the increase and the eligible retirees.
• Section 3 requires benefits to be provided by separate acts specifying amount and eligible retirees; Section 4 excludes prior cost-of-living increases or one-time bonuses from this act.
• Effective date is the first day of the third month 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

Retirement Systems