SB310 Alabama 2023 Session

Summary

Primary Sponsor

Arthur OrrSenator

Republican

Session

Regular Session 2023

Title

Relating to the Retirement Systems of Alabama; to provide for an annualized benefit adjustment procedure for the funding of future benefit increases to retirees of the State Employees' Retirement System and the Teachers' Retirement System which will not increase the unfunded liability of either system due to the provisions which require the actual annual cost of any increase to be authorized and funded one year at a time with no authorization or liability for the benefit increase beyond the fiscal year for which the appropriations are made.

Summary

SB310 would require future ERS and TRS benefit increases for retirees to be funded annually through the budget, paid only if the cost is approved, and not increase the systems' unfunded liability.

What This Bill Does

It creates a pay-as-you-go funding process for future retiree benefit increases in the State Employees' Retirement System and the Teachers' Retirement System. The actual cost must be identified by the system's actuary and included in the annual State General Fund Budget Act for state employees or the Education Trust Fund Budget Act for TRS. If the funding is not identified and provided, the increase is not paid that year; payments occur only in the month the funds are appropriated and collected, and a separate employer rate funds the cost. Local units under ERS must follow the same funding process, and any new benefit increase must be established by a separate legislative act.

Who It Affects

• Retirees of the State Employees' Retirement System and the Teachers' Retirement System who would receive future benefit increases, but only if the annual cost is identified and funded in the appropriate budget acts.
• State and local government employers participating in ERS and TRS, who must fund the benefit increases via a separate employer rate and ensure funds are included in annual appropriation acts or transfers are made.

Key Provisions

• Establishes a pay-as-you-go funding procedure for future ERS and TRS benefit increases, requiring the actual annual cost to be identified and funded for each year.
• Funding must be included in the annual State General Fund Budget Act (ERS) and the Education Trust Fund Budget Act (TRS), with a separate employer rate established to fund the actual cost.
• If the required amounts are not identified and funded in the appropriation acts, the benefit increase for that year is not paid, though it may resume in a future year when funded.
• Local units under the ERS must follow the same funding process as state employees, with annual estimates provided by the actuary.
• Any new benefit increase must be enacted by a separate legislative act specifying the amount and eligible retirees.
• The act does not apply to any prior cost-of-living increases or one-time bonuses previously enacted.

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

Subjects

RSA, procedure established for funding benefit increases of ERS and TRS retirees