Alabama House Bill HB371

Alabama 2023 Regular Session

• Introduced: 4/20/23
• Refer: 4/20/23
• Report Pass: 5/10/23
• Engrossed: 5/25/23
• Refer: 5/25/23
• Report Pass: 5/31/23

Caption

Relating to retirement benefits; to amend Sections 16-25-23 and 36-27-28, Code of Alabama 1975, to revise the circumstances in which an individual's pension, annuity, or retirement allowance benefits under the Teachers' Retirement System and the Employees' Retirement System are subject to certain recovery actions.

Impact

The proposed changes under HB 371 would significantly alter existing protective measures surrounding pension and retirement funds. Under current law, such benefits are generally exempt from any state or municipal taxes and other processes such as levies and garnishments. However, this bill introduces a provision that allows courts to divert a portion of pension benefits to satisfy restitution obligations, thereby potentially reducing the financial security of retirees who may be facing restitution orders. Supporters of the bill may argue that this change is necessary for ensuring accountability for individuals who have committed financial crimes, allowing victims to recover losses.

Voting

The legislation was read a third time and passed with significant support, highlighting a strong political backing for reforming the existing framework around retirement benefit protections. The lone opposition vote may signal the concerns raised by minority voices regarding the potential impacts of these changes on retired individuals and their beneficiaries.

Summary

House Bill 371 aims to amend specific sections of the Code of Alabama related to the circumstances under which retirement benefits from the Teachers' and Employees' Retirement Systems can be subjected to financial recoveries for criminal restitution. The bill specifies certain conditions where these retirement benefits, typically protected from various recovery actions, may be accessed to satisfy court-ordered financial obligations. In particular, the bill allows for garnishment of retirement benefits if restitution, fines, costs, or fees ordered by a circuit or district court meet a threshold of $1,000 and are applicable to retirees or beneficiaries enrolled in these retirement systems.

Contention

Notable points of contention surrounding HB 371 may include concerns from advocacy groups representing retirees, who could view these changes as an infringement on the financial security of beneficiaries who have committed criminal offenses. Critics may argue that it sets a precedent for the state to access funds specifically reserved for retirement, putting vulnerable populations at further risk of financial instability. Furthermore, discussions might address the ethical implications of allowing the government to recover debts from individuals’ retirement benefits, which are generally expected to remain untouchable to uphold economic security for the elderly.