Senate Bill 280 Alabama 2026 Session

Summary

Primary Sponsor

J.T. WaggonerSenator

Republican

Session

2026 Regular Session

Title

Teachers' Retirement System and Employees' Retirement System; purchase of certain federal service credit by participating member

Summary

Allows participating members of Alabama's Teachers' Retirement System and Employees' Retirement System to purchase up to four years of federal nonmilitary service credit.

What This Bill Does

If a member has at least 10 years of contributing service credit, they may receive up to four years of federal nonmilitary service credit. Before receiving the credit, the member must pay the full actuarially determined cost for each year, obtain written certification from the federal retirement system that the service was earned, and purchase in increments of at least one year. The member cannot receive this credit if they already have credit or benefits for the same federal service under another public funds-funded plan (not including Social Security); if not qualified, any contributions are refunded. The applicable retirement system may deduct up to 12 equal installments from the retirement allowance to cover administrative costs if needed. The act becomes effective October 1, 2026.

Who It Affects

• Participating members of the Teachers' Retirement System and Employees' Retirement System with at least 10 years of contributing service who want to buy federal nonmilitary service credit (up to four years).
• The Federal Retirement System and the applicable state retirement system, which must certify the service in writing and process the credit purchase.
• Retired or future retirees who may see adjustments to their retirement allowances to cover administrative costs, and those whose contributions are refunded if the service is not qualified.

Key Provisions

• Allows up to four years of creditable federal nonmilitary service for qualifying employment.
• Requires at least 10 years of contributing service credit to be eligible (military service excluded).
• Requires payment of the full actuarially determined cost for each year, certification from the federal system, and purchase in increments of at least one year.
• Prohibits duplicate credit for the same federal service under other public funds-funded plans (not applicable to Social Security).
• Refunds contributions if the service is not qualified.
• Permits deduction of up to 12 equal installments from retirement allowances to cover administrative costs.
• Effective date: October 1, 2026.

AI-generated summary using openai/gpt-5-nano-2025-08-07 on Mar 10, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Retirement