HB158 Alabama 2025 Session

Summary

Primary Sponsor

Steve ClouseRepresentative

Republican

Session

2025 Regular Session

Title

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

Summary

HB158 creates a formal, annual funding process for future ERS and TRS retiree benefit increases, requiring cost identification and appropriation through separate legislative acts and funding via employer rates or state funds, with increases only allowed when funded.

What This Bill Does

It establishes a procedure where any future ERS or TRS benefit increase must have its annual cost identified and funded in the State General Fund (ERS) or Education Trust Fund (TRS) appropriation acts. If the cost is not identified and appropriated, the increase is not paid that year and is considered a one-year increase that does not affect the systems' unfunded liability. Each increase must be authorized by a separate legislative act that sets the amount and eligible class, and funding comes through a separate employer rate paid by participating employers; the increase is paid only if the act and appropriations are in place. The bill also creates findings about not increasing unfunded liability, restricts one increase per quadrennium, and sets phased effective dates beginning in 2026.

Who It Affects

• Retirees and beneficiaries in the Employees' Retirement System (ERS) will receive benefit increases only if the annual cost is identified and funded in the State General Fund appropriation act and supported by a separate employer rate; if not, they do not receive the increase in that year.
• Retirees and beneficiaries in the Teachers' Retirement System (TRS) will receive benefit increases only if the annual cost is identified and funded in the Education Trust Fund appropriation act and supported by a separate employer rate; if not, they do not receive the increase in that year.

Key Provisions

• Creates annual funding procedure requiring the actual cost of ERS and TRS benefit increases to be identified and appropriated in the appropriate state budget acts.
• If annual costs are not identified/appropriated, no increase is paid that fiscal year; increases are treated as one-year adjustments and do not affect unfunded liabilities.
• Separately acts must specify the amount and eligible class for any increase; other increases may require additional separate acts.
• ERS and participating employers fund the increase through a separate employer rate, paid from the same source as active member salaries; if the rate is not identified/appropriated, the increase is not paid that year but may resume if funded later.
• TRS and participating employers fund the increase through a separate employer rate in the Education Trust Fund appropriation act; same funding conditions apply as for ERS.
• Section 3 states increases under this act will not increase unfunded liability and that accounting standards should reflect this for audits.
• Section 4 clarifies the act does not apply to prior cost-of-living increases or one-time bonuses from earlier laws.
• Section 5 restricts to one retiree/beneficiary increase per legislative quadrennium under this act, starting November 4, 2026.
• Section 6 makes the act effective October 1, 2026.

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