House Bill 138 Alabama 2026 Session

Summary

Primary Sponsor

Kenneth PaschalRepresentative

Republican

Session

2026 Regular Session

Title

Retired state employees; certain supplemental work authorized

Summary

HB138 would let state retirees from the Employees' Retirement System or Teachers' Retirement System return to work as school bus drivers and in related roles under defined limits, without losing their retirement benefits.

What This Bill Does

It allows ERS and TRS retirees to perform duties for participating employers in any capacity, including as independent contractors, as long as they are not in permanent full-time work and their earnings stay under a limit that starts at $30,000 and is adjusted each year by CPI. It also lets elected officials who are retirees serve full-time in public offices without suspension of retirement benefits, but they cannot earn a pension and salary for the same service, with a special allowance that local elected superintendents of education must meet the earnings limit if drawing benefits. The bill creates specific rules for retirees with law enforcement, corrections, fire, and emergency medical credentials to work in related roles (eg, school resource officer, corrections officer, firemedic) with annual caps of $52,000. It includes provisions for full-time bus driver hires under earnings limits and retirement-draw requirements, with a retroactive start date to January 1, 2023 and an end date of December 31, 2030, and a general effective date of October 1, 2026.

Who It Affects

• ERS retirees who want to return to work as bus drivers or in other roles under the earnings limits and non-permanent-work rules
• TRS retirees who want to return to work under the same earnings limit and non-permanent-work rules
• employing authorities and school districts that hire retirees
• retired elected officials who may serve without suspending retirement benefits but with restrictions on pension/salary for the same service
• local elected superintendents of education who must stay within earnings limits if drawing benefits
• retirees with law enforcement, corrections, firefighter, and emergency medical credentials who may take specified public safety roles with a $52,000 annual cap

Key Provisions

• Authorizes ERS and TRS retirees to perform duties for participating employers without suspension of retirement, but only if not in permanent full-time capacity and earnings do not exceed the set limit; the initial limit is $30,000 and increases annually based on CPI with rounding rules.
• Annual earning limit increases are tied to the Consumer Price Index for all urban consumers, calculated from the preceding 12 months ending September 30, and applied for the following year.
• Allows elected retirees to serve full-time in public office without suspension of retirement benefits, but prevents earning both pension and salary for the same service; local elected superintendents of education may receive both only if their compensation does not exceed the earnings limit.
• Imposes compliance obligations on employers and retirees to certify information and provide notice to the Retirement Systems within 30 days of knowing postretirement employment details.
• Creates special rules for retirees with law enforcement, corrections, and fire/EMS credentials to work in roles like school resource officer, correctional officer, or firemedic without suspension, with a $52,000 annual cap and retroactive applicability to January 1, 2023.
• Establishes that a retiree may work full-time as a bus driver if the earnings do not exceed the subsection (a) limit and the retiree has drawn retirement benefits for 12 consecutive months; an exception allows hires before January 1, 2026 to work without this 12-month draw requirement if other conditions are met.
• Sets a hard end date for these provisions at December 31, 2030, after which the new authorization ends.
• Section 2 provides that the act becomes effective on October 1, 2026.

AI-generated summary using openai/gpt-5-nano-2025-08-07 on Mar 3, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Retirement