Alabama 2023 Regular Session

Alabama Senate Bill SB310 Compare Versions

Only one version of the bill is available at this time.

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1	1	SB310INTRODUCED
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3	3	50Q463-1
4	4	By Senator Orr
5	5	RFD: Finance and Taxation Education
6	6	First Read: 11-May-23
7	7	2023 Regular Session
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13	13	6 50Q463-1 05/10/2023 KMS (L)cr 2023-2051
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15	15	SYNOPSIS:
16	16	Under existing law, there is no formal procedure
17	17	for funding an increase in the pension benefits earned
18	18	by state and local government employees who have
19	19	retired under the Retirement Systems of Alabama.
20	20	This bill would establish a procedure for the
21	21	funding of benefit increases provided to retirees under
22	22	the Employees' Retirement System and the Teachers'
23	23	Retirement System by the Legislature by requiring the
24	24	actual annual cost to be identified and provided for in
25	25	the annual State General Fund Budget Act and the
26	26	Education Trust Fund Budget Act.
27	27	In the event the amounts are not identified and
28	28	appropriated or provided for, there will be no
29	29	increased benefit provided for that fiscal year. This
30	30	pay as you go procedure shall be considered a one year
31	31	benefit adjustment that does not affect the unfunded
32	32	liability of the Retirement Systems of Alabama as the
33	33	benefit increase will only be paid if the actual cost
34	34	is included in the annual appropriation acts and the
35	35	funds collected from the covered entities in the same
36	36	month that the increase is to be paid to the retiree
37	37	each month.
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65	65	28 SB310 INTRODUCEDSB310 INTRODUCED
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67	67	A BILL
68	68	TO BE ENTITLED
69	69	AN ACT
70	70	Relating to the Retirement Systems of Alabama; to
71	71	provide for an annualized benefit adjustment procedure for the
72	72	funding of future benefit increases to retirees of the State
73	73	Employees' Retirement System and the Teachers' Retirement
74	74	System which will not increase the unfunded liability of
75	75	either system due to the provisions which require the actual
76	76	annual cost of any increase to be authorized and funded one
77	77	year at a time with no authorization or liability for the
78	78	benefit increase beyond the fiscal year for which the
79	79	appropriations are made.
80	80	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
81	81	Section 1. (a) Beginning in the first fiscal year that
82	82	begins after the effective date of this act, no benefit
83	83	increase provided to retirees under the Employees' Retirement
84	84	System shall be paid unless the actual amount as estimated by
85	85	the actuary of the system is included in the appropriation
86	86	acts for that year. The required amounts shall be identified
87	87	in the appropriation acts with a separate employer rate
88	88	established to fund the actual cost as determined by the
89	89	actuary. The Retirement Systems of Alabama shall require any
90	90	entity whose appropriation is not included in the
91	91	appropriation acts to transfer to the Employees' Retirement
92	92	System the amount required by the employer rate established
93	93	for the benefit increase in the same manner as normal employer
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123	123	contributions are made. In any year the required amount is not
124	124	identified and funding provided for in the appropriation acts,
125	125	the Retirement Systems of Alabama shall not be required to pay
126	126	nor shall they pay the amount of the increase provided for
127	127	that year. The increase provided may be resumed in any
128	128	subsequent year following a year where the benefit increase
129	129	was not funded if included in that years appropriation acts.
130	130	Any new benefit increase shall only be pursuant to legislative
131	131	act establishing the new benefit increase.
132	132	(b) Local units under the Employees' Retirement System
133	133	which are authorized to provide benefit increases shall
134	134	provide for the actual costs of any increase for each year in
135	135	the same manner as provided in subsection (a) for state
136	136	employees. The actuary shall provide an annual estimate to
137	137	each system which granted the increase in time to be included
138	138	in the local systems funding plan. In any year that the
139	139	funding is not included, the increase shall not be paid but
140	140	may be resumed in subsequent years as provided in subsection
141	141	(a) for state employees.
142	142	Section 2. Beginning in the first fiscal year that
143	143	begins after the effective date of this act, no increase
144	144	provided to retirees under the Teachers' Retirement System
145	145	shall be paid unless the actual amount as estimated by the
146	146	actuary of the system is included in the appropriation acts
147	147	for that year. The required amounts shall be identified in the
148	148	appropriation acts with a separate employer rate established
149	149	to fund the actual cost as determined by the actuary. The
150	150	Retirement Systems of Alabama shall require any entity whose
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180	180	appropriation is not included in the appropriation acts to
181	181	transfer to the Teachers' Retirement System the employer rate
182	182	established for the benefit increase in the same manner as
183	183	normal employer contributions are made. In any year the
184	184	required amount is not identified and funding provided for in
185	185	the appropriation acts, the Retirement Systems of Alabama
186	186	shall not be required to pay nor shall they pay the amount of
187	187	the increase provided for that year. The increase provided may
188	188	be resumed in any subsequent year following a year where the
189	189	benefit increase was not funded if included in that years
190	190	appropriation acts. Any new increase in the benefits shall
191	191	only be pursuant to legislative act establishing the new
192	192	benefit increase.
193	193	Section 3. Any benefit increase provided to retirees
194	194	shall be by separate act which shall establish the amount and
195	195	the eligible retirees. Upon passage of such an act the
196	196	provisions of the act shall be applicable to fund that
197	197	increase.
198	198	Section 4. This act is not applicable to and shall not
199	199	affect any previous cost-of-living increase or one time bonus
200	200	provided to retirees under acts previously passed by the
201	201	Legislature.
202	202	Section 5. This act shall become effective immediately
203	203	following its passage and approval by the Governor, or its
204	204	otherwise becoming law.
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