Retirement Systems, Employees Retirement System, procedure for funding benefit increases for retirees provided, actual annual cost identified in annual appropriation act
Impact
The introduction of SB338 is expected to positively impact the financial management of Alabama's retirement systems by establishing a controlled mechanism for benefit adjustments. This 'pay-as-you-go' method prevents the creation of unfunded liabilities, ensuring that pension increases occur only when they are financially feasible. By requiring annual appropriations to match projected costs for pension increases, the bill strives to provide predictability and stability in the funding of retirement benefits for both state and local employees.
Summary
SB338 establishes a formal procedure for funding benefit increases for retirees under the Employees' Retirement System and the Teachers' Retirement System in Alabama. Under the current law, there was no set process to handle pension increases, creating uncertainty for retirees. The bill mandates that any proposed increase in benefits must have its actual annual cost estimated by an actuary and included in the state’s annual appropriations acts. This requirement aims to ensure that all necessary funding is transparently accounted for in the state budget before benefits can be increased.
Contention
Despite its advantages, SB338 could spark debate regarding the impact of strict funding requirements on retirees' benefits. Some critics might argue that the bill's provisions could delay or prevent necessary cost-of-living adjustments for retirees, particularly in economically challenging years. The stipulation that increases can only be included in appropriations if they are identified in advance may create limitations on the flexibility needed to respond to inflation and rising living costs. Thus, while the bill aims to strengthen fiscal responsibility, it may also limit timely financial relief for public sector retirees.
Same As
Retirement Systems, Employees Retirement System, procedure for funding benefit increases for retirees provided, actual annual cost identified in annual appropriation act
Retirement benefits, revise circumstances when an individual's pension, annuity, or retirement allowance benefits are subject to certain recovery actions
Retirement benefits, revise circumstances when an individual's pension, annuity, or retirement allowance benefits are subject to certain recovery actions
District attorneys, prosecutors, office of prosecution services' attorneys, retirement benefits and allowances further provided for; membership of District Attorneys' Plan expanded; participation in supernumerary program and employees retirement system further provided for
Jefferson County, General Retirement System for Employees of Jefferson County, amended to identify the Personnel Board of Jefferson County as the civil service system of the county
Jefferson County, General Retirement System for Employees of Jefferson County, amended to identify the Personnel Board of Jefferson County as the civil service system of the county
To provide appropriations from the General Fund for the expenses of the Executive, Legislative and Judicial Departments of the Commonwealth, the public debt and the public schools for the fiscal year July 1, 2023, to June 30, 2024, and for the payment of bills incurred and remaining unpaid at the close of the fiscal year ending June 30, 2023; to provide appropriations from special funds and accounts to the Executive and Judicial Departments for the fiscal year July 1, 2023, to June 30, 2024, and for the payment of bills remaining unpaid at the close of the fiscal year ending June 30, 2023; to provide for the appropriation of Federal funds to the Executive and Judicial Departments for the fiscal year July 1, 2023, to June 30, 2024, and for the payment of bills remaining unpaid at the close of the fiscal year ending June 30, 2023; and to provide for the additional appropriation of Federal and State funds to the Executive and Legislative Departments for the fiscal year July 1, 2022, to June 30, 2023, and for the payment of bills incurred and remaining unpaid at the close of the fiscal year ending June 30, 2022.