House Bill 338 Alabama 2026 Session

Summary

Primary Sponsor

Kenyatte HassellRepresentative

Democrat

Session

2026 Regular Session

Title

Employees' Retirement System; state and local retirees four percent cost-of-living benefit increase

Summary

HB338 would provide a four percent cost-of-living increase for eligible Alabama Employees' Retirement System retirees and beneficiaries starting October 1, 2026, with a minimum of $15 per month, funded only if annual appropriations cover the cost.

What This Bill Does

If passed, the bill would grant a 4% increase to the gross monthly benefits of retirees who retired before October 1, 2025 and are receiving a monthly allowance, with at least a $15 per month minimum. It would also give a 4% increase to beneficiaries of deceased members or retirees (with the same pre-October 1, 2025 eligibility) and adjust any future survivor allowances according to the original benefit option. Funding for the increases would be determined annually by the ERS Board and paid by employers from the same source used for active salaries; the increases would only occur if the Legislature appropriates the funds in the State General Fund for that year, and could resume in a future year if funded. The bill also excludes individuals whose Medicaid benefits would be impaired by the increase, and requires employers to elect to participate and bear the cost if they choose to come under this act, with no retroactive funding unless expressly elected.

Who It Affects

• Retirees of the Employees' Retirement System who retired before October 1, 2025 and are currently receiving a monthly benefit, who would receive a 4% increase (minimum $15/month).
• Beneficiaries and survivors of deceased ERS members or retirees (with death or retirement before October 1, 2025) who would receive the 4% increase or survivor-adjusted amount (minimum $15/month) and any applicable survivor option adjustments.

Key Provisions

• Section 1(a): Eligible retirees get a 4% cost-of-living increase to gross monthly benefits starting October 1, 2026, with a floor of $15 per month.
• Section 1(b): Beneficiaries of deceased members/retirees receive the increase based on the retiree's amount (or 4% of the benefit) with a $15 minimum; Section 1(c) survivor allowances are adjusted per the original option or applicable law if death occurs before October 1, 2026.
• Section 1(d): The ERS Board determines the annual cost of the increase and informs employers; funding comes from employers in proportion to active-member salaries; payments depend on separate employer rates and annual appropriation.
• Section 1(e): Individuals whose Medicaid eligibility would be impaired by the increase are not entitled to the increase, and those who later apply for Medicaid may lose eligibility for the increase if it would impair benefits.
• Section 1(f): The increase is payable only if the act’s cost is identified and funded in the State General Fund appropriation act; if not funded in a given year, the increase does not occur that year but could resume if funded later.
• Section 2: Employers may elect to come under this act starting October 1, 2026, bearing the cost of the increases; retroactive funding is not required unless the employer elects to fund it, and eligible beneficiaries and survivors receive the increase if their employer participates.
• Section 3: The act becomes effective October 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Retirement