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HB338 INTRODUCED
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HB338
ZQDFTKW-1
By Representatives Hassell, Bracy, Lawrence, Hollis, Travis,
Gray, McCampbell, Morris, Datcher, Moore (M)
RFD: Ways and Means General Fund
First Read: 27-Jan-26
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ZQDFTKW-1 01/27/2026 KMS (L)cr 2026-400
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First Read: 27-Jan-26
SYNOPSIS:
This bill would provide for a benefit increase
for certain state and local retirees and beneficiaries
of the Employees' Retirement System effective October
1, 2026.
A BILL
TO BE ENTITLED
AN ACT
Relating to the Employees' Retirement System of
Alabama; to provide for a benefit increase for certain state
and local retirees and beneficiaries of the Employees'
Retirement System effective October 1, 2026, subject to the
annualized benefit increase procedure for retirees and
beneficiaries under the Employees' Retirement System.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) Commencing October 1, 2026, and subject
to the provisions of Section 36-27-32, Code of Alabama 1975,
each individual, except those whose employer participated in
the Employees' Retirement System pursuant to Sections 36-27-6,
36-27-7, and 36-27-7.1, Code of Alabama 1975, whose effective
date of retirement for purposes of receiving benefits from the
Employees' Retirement System is prior to October 1, 2025, and
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Employees' Retirement System is prior to October 1, 2025, and
who is receiving or is entitled to receive a monthly allowance
from the Employees' Retirement System, shall receive a
cost-of-living increase of four percent in his or her gross
monthly benefit, but not less than fifteen dollars ($15) per
month.
(b) Beneficiaries of deceased members or deceased
retirees, except where the deceased member or deceased retiree
retired from an employer participating in the Employees'
Retirement System pursuant to Sections 36-27-6, 36-27-7, and
36-27-7.1, Code of Alabama 1975, if the date of death for the
deceased member, or the effective date of retirement for the
deceased retiree for purposes of receiving benefits from the
Employees' Retirement System was prior to October 1, 2025,
shall receive the cost-of-living increase in the amount
attained by the retiree. In no case shall the cost-of-living
increase be less than fifteen dollars ($15) per month.
(c) Any future survivor allowance shall be adjusted as
provided in the member's original option selection for those
eligible retirees who have selected a monthly survivor
allowance payable to a designated beneficiary upon the death
of the retiree, or as otherwise provided by law in the case of
a qualifying member who dies prior to October 1, 2026.
(d) If funded by the Legislature pursuant to Section
36-27-32, Code of Alabama 1975, the Board of Control of the
Employees' Retirement System shall determine annually the
amount required to pay the cost of the increased allowance
provided under this section and shall notify the chief fiscal
officer of each employer of the per centum rates of earnable
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HB338 INTRODUCED
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officer of each employer of the per centum rates of earnable
compensation of the members required to be paid to the
retirement system. Each employer of members of the Employees'
Retirement System shall pay on account of the increases
provided in this section in the same manner and from the same
source of funds as provided in Section 36-27-24, Code of
Alabama 1975, it being the intent of the Legislature that the
cost of providing the increases in this section shall be
distributed from all funds in proportion to the salaries paid
therefrom for active members.
(e) Any individual who received benefits under the
Medicaid Program and whose eligibility for Medicaid benefits
would be impaired by the cost-of-living increase provided by
this section shall not be entitled to receive the
aforementioned increase. Any individual who subsequently
applies for benefits under the Medicaid Program and that
individual's eligibility to receive benefits is impaired by
the cost-of-living increase provided by this section shall not
be entitled to receive the increase subsequent to the date
that the member files an application for benefits under the
Medicaid Program.
(f) Pursuant to Section 36-27-32, Code of Alabama 1975,
the Employees' Retirement System shall pay the benefit
increase to the eligible retirees and beneficiaries provided
for in this section only if the annual cost of the increase as
estimated by the actuary of the system is included and
appropriated in the State General Fund appropriation act for
each fiscal year by a separate employer rate. In any fiscal
year in which the required separate employer rate is not
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year in which the required separate employer rate is not
identified and appropriated in the appropriation act, eligible
retirees and beneficiaries shall not receive, and the
Employees' Retirement System shall not be required to pay, the
increase in that fiscal year. The benefit increase may be
resumed in any subsequent fiscal year if included in that
year's appropriation act.
Section 2. (a)(1) Commencing October 1, 2026, each
individual whose employer participated in the Employees'
Retirement System pursuant to Sections 36-27-6, 36-27-7, and
36-27-7.1, Code of Alabama 1975, whose effective date of
retirement for purposes of receiving benefits from the
Employees' Retirement System is prior to October 1, 2025, and
who is receiving or entitled to receive a monthly allowance
from the Employees' Retirement System, may receive a
cost-of-living increase of four percent in his or her gross
monthly benefit, but not less than fifteen dollars ($15) per
month, if the employer elects to come under this act. Any
employer making the election to come under this act shall bear
the cost-of-living increases paid to its employees pursuant to
this section. Any employer participating under Sections
36-27-6, 36-27-7, and 36-27-7.1, Code of Alabama 1975, may
elect to come under this act at any time and have this act
become effective on October 1, 2026, or on October 1 of any
subsequent fiscal year and the employer shall not be required
to pay this cost-of-living increase retroactively unless the
employer elects to fund the increase.
(2) If the employer elects to come under this act,
beneficiaries of deceased members or deceased retirees retired
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beneficiaries of deceased members or deceased retirees retired
from an employer participating in Employees' Retirement System
pursuant to Sections 36-27-6, 36-27-7, and 36-27-7.1, Code of
Alabama 1975, shall receive the same cost-of-living increase
provided in this section, but no less than fifteen dollars
($15) per month.
(3) Any future survivor allowance shall be adjusted as
provided in the member's original option selection for those
eligible retirees who have selected a monthly survivor
allowance payable to a designated beneficiary upon the death
of the retiree, or as otherwise provided by law in the case of
a qualifying member who dies prior to October 1, 2026.
(4) If the employer elects to come under this act, the
Board of Control of the Employees' Retirement System shall
determine annually the amount required to pay the cost of
increased allowance provided under this section and shall
notify the chief fiscal officer of each employer of the per
centum rates of earnable compensation of the members required
to be paid to the retirement system. Each employer of members
of the Employees' Retirement System shall pay on account of
the increases provided in this section in the same manner and
from the same source of funds as provided in Sections 36-27-6
and 36-27-7, Code of Alabama 1975, it being the intent of the
Legislature that the cost of providing the increases in this
section shall be distributed from all funds in proportion to
the salaries paid therefrom for active members.
(b)(1) Commencing October 1, 2026, any retired employee
who retired from a city, town, county, or public or
quasi-public organization of the state before the city, town,
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quasi-public organization of the state before the city, town,
county, or public or quasi-public organization of the state
became a member of the Employees' Retirement System, and who
is receiving a monthly benefit prior to October 1, 2026,
administered by the Employees' Retirement System, and whose
years of creditable service have not been made known to the
Employees' Retirement System, may receive an increase in the
benefits of four percent, except that no pensioner shall
receive an increase of less than fifteen dollars ($15) per
month, provided the retired employee retired prior to October
1, 2025, and the employer elects to come under this act.
(2) Commencing October 1, 2026, beneficiaries of
Employees' Retirement System pensioners described in
subdivision (1) shall receive an increase of four percent of
their gross monthly benefit, but not less than fifteen dollars
($15) per month, provided the date of death for the deceased
pensioner, or the effective date of retirement for the
deceased pensioner, was prior to October 1, 2025, and the
local units elect to fund the increase.
(3) Commencing October 1, 2026, any pensioner or
annuitant who retired prior to October 1, 2024, from a city,
town, county, or public or quasi-public organization of the
state before the city, town, county, or public or quasi-public
organization of the state became a member of the Employees'
Retirement System and is receiving a monthly benefit not
administered by the Employees' Retirement System shall receive
an increase of four percent of his or her gross monthly
benefit, but not less than fifteen dollars ($15) per month,
provided the city, town, county, public or quasi-public
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provided the city, town, county, public or quasi-public
organization of the state elects to fund the increase.
(c) Any individual who received benefits under the
Medicaid Program and whose eligibility for Medicaid benefits
would be impaired by the cost-of-living increase provided by
this act shall not be entitled to receive the aforementioned
increase. Any individual who subsequently applies for benefits
under the Medicaid Program and that individual's eligibility
to receive benefits is impaired by the cost-of-living increase
provided by this act shall not be entitled to receive the
increase subsequent to the date that the member files
application for benefits under the Medicaid Program.
Section 3. This act shall become effective on October
1, 2026.
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