SB173 Alabama 2025 Session

Updated Feb 23, 2026

Summary

Primary Sponsor: Robert L. StewartSenator
Democrat
Session: 2025 Regular Session
Title: Retirement, State Facilitated Retirement Savings Program created
Summary: SB173 creates a state-facilitated Alabama Retirement Savings Program to help private-sector workers save for retirement when their employer does not offer a plan.
What This Bill Does
The bill establishes the Alabama Retirement Savings Program and Fund, managed by the Department of Workforce, to connect eligible employers and employees with low-cost retirement savings options. It requires automatic payroll deductions into individual accounts with a minimum 3% contribution, and automatic enrollment for eligible employees, though individuals can opt out or adjust contributions. It provides investment options including a capital preservation fund, a lifecycle fund, and a default option, with fees capped and regular audits and public reporting. Employers are not fiduciaries and are not liable for investment results or program design, and the program’s assets are kept in a separate state fund dedicated to the program.

Who It Affects
Private-sector employees in Alabama whose employers do not offer a retirement plan: will be automatically enrolled in the program, can contribute, choose investments, adjust contribution levels, and opt out.
Eligible employers (self-employed, sole proprietors, or independently owned for-profit businesses with 500 or fewer employees): must set up payroll deposit arrangements, automatically enroll employees, remit contributions, and may contract with third parties to manage program tasks; they are not fiduciaries and have no liability for investment performance.

Key Provisions
Establishes the Alabama Retirement Savings Program and Fund to connect eligible employers and employees with approved plans and promote retirement savings in a convenient, low-cost, portable manner.
Requires automatic enrollment and payroll deduction contributions by enrollees, with a minimum 3% contribution; employers must enroll employees within specified timeframes and remit contributions; open enrollment periods will occur annually.
Offers investment options (including a capital preservation fund and a lifecycle fund) with a default option; fees are capped at 0.6% annually, with a temporary 0.75% cap for the first three years; contributions and investment earnings are allocated to individual accounts on a pro rata basis.
Creates a separate Alabama Retirement Savings Fund in the State Treasury to hold and manage program assets; funds are not state property and are used only for program purposes; administrative costs are paid from the fund.
Requires annual investment policy and risk management, an independent annual audit, and public reporting to employers and enrollees; a state website will host reports and program information.
Designates the Department of Workforce as administrator and authorizes contracting with private financial institutions and other service providers; contracts must use competitive bidding processes.
Clarifies that participating employers are not fiduciaries and bear no liability for investment decisions or program outcomes; the program operates independently from employer-sponsored plans.
Provides for means-tested benefit considerations in line with federal law, allowing asset disregards where permitted, with standards to be as favorable as federal law allows.

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