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SB154 ENROLLED
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SB154
TBX4P15-2
By Senator Albritton
RFD: Finance and Taxation General Fund
First Read: 14-Jan-26
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First Read: 14-Jan-26
Enrolled, An Act,
To provide a cost-of-living increase for state
employees for the fiscal year beginning October 1, 2026; and
to provide for a funded one-time longevity bonus addition to
the retirement benefits of certain retirees and beneficiaries
of the Employees' Retirement System.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) Beginning with the first pay day on or
after October 1, 2026, all state employees who are listed in
the classified and unclassified service of the state as
defined in Section 36-26-10, Code of Alabama 1975, and all
other state employees and hourly employees of the state, and
all judicial personnel, officers, and employees, and all
legislative personnel, officers, and employees, whether
subject to the State Merit System or not, and all employees of
the county health departments who are employed subject to the
State Merit System and whose compensation is paid out of a
budget provided and agreed upon by the state, county, or other
contributing agency under the direction of the State Board of
Health shall receive a salary increase of two percent.
(b)(1) Any cost-of-living increase granted under this
section shall in no way apply to any local supplement provided
to any judges or to any other local employee whose salary is
tied to that of any state employee.
(2) This section shall not apply to any Merit System
employee or hourly employee whose service or rate of pay is
covered by any labor agreement or contract.
(c) The Director of the State Personnel Department
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(c) The Director of the State Personnel Department
shall revise the schedule of rates set forth in the pay plan
for state employees and shall send the same to the State
Comptroller, who shall issue warrants in accordance therewith.
With respect to all court officials and employees within the
Unified Judicial System who serve the trial and appellate
courts of the state and the Administrative Office of Courts,
the Administrative Director of Courts shall revise the
schedule of rates set forth in the pay plan for these court
officials and employees to reflect the increase provided in
this section, and shall certify the same to the State
Comptroller, who shall issue warrants in accordance therewith.
With respect to employees of the Legislature, the Secretary of
the Senate for employees of the Senate, the Clerk of the House
of Representatives for employees of the House and the Director
of the Legislative Services Agency for employees of the
Legislative Services Agency shall revise the schedule of rates
set forth in the pay plan for their employees to reflect the
increase provided in this section and shall certify the same
to the State Comptroller, who shall issue warrants in
accordance therewith.
(d) It is not the intent of this section to make
appropriations, but the appropriations required by this
section shall be made in the annual budget act for the
affected entities.
Section 2. (a)(1) There is provided a funded one-time
lump-sum payment, hereinafter referred to as longevity bonus,
to each individual except those whose employer participated in
the Employees' Retirement System pursuant to Sections 36-27-6,
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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 is entitled to receive a monthly allowance
from the Employees' Retirement System on September 30, 2026.
(2) The formula for calculating the longevity bonus
shall be one dollar ($1) per month for each year of service
attained by the retiree.
(3) 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 beneficiary is
receiving or is entitled to receive a monthly allowance from
the Employees' Retirement System on September 30, 2026, shall
receive a bonus payment.
(4) For purposes of this section, service includes the
service under Section 36-27-1 and Article 9, commencing with
Section 36-27-170, of Chapter 27, Title 36, Code of Alabama
1975, as well as state police bonus credit or hazardous duty
(FLC bonus) credit.
(b)(1) 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 is entitled to receive a monthly allowance
from the Employees' Retirement System on September 30, 2026,
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from the Employees' Retirement System on September 30, 2026,
shall receive the longevity bonus specified in subdivisions
(a)(1) and (a)(2), if the employer elects to come under this
section by official resolution on or before August 31, 2026.
Any employer making the election to come under this section
shall bear the cost of the longevity bonus paid to its
retirees pursuant to this subsection.
(2) If the employer elects to come under this section,
beneficiaries of deceased members or deceased retirees 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 beneficiary is receiving or is
eligible to receive a monthly allowance from the Employees'
Retirement System on September 30, 2026, shall receive a bonus
payment.
(c)(1) Any retired pensioner or annuitant who retired
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 who is
receiving or is entitled to receive a monthly allowance from
the Employees' Retirement System on September 30, 2026, shall
receive the longevity bonus stipulated in subdivisions (a)(1)
and (a)(2), provided the employer elects to come under this
section. Any employer making the election to come under this
section shall bear the cost of the longevity bonus paid to its
retirees pursuant to this subsection and provide the
Employees' Retirement System with the number of years of
creditable service earned by each of its eligible pensioners
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creditable service earned by each of its eligible pensioners
and annuitants.
(2) Beneficiaries of Employees' Retirement System
pensioners or annuitants described in subdivision (1) shall
receive a longevity bonus, provided the date of death for the
deceased pensioner or annuitant, or the effective date of
retirement for the deceased pensioner or annuitant, was prior
to October 1, 2025, and the beneficiary is receiving or is
entitled to receive a monthly allowance from the Employees'
Retirement System on September 30, 2026, and the local unit
elects to fund the longevity bonus and provides the Employees'
Retirement System with the number of years of creditable
service earned by each of its eligible pensioners and
annuitants.
(d) Any person who received benefits under the Medicaid
program and whose eligibility for Medicaid benefits would be
impaired by the longevity bonus provided by this section shall
not be entitled to receive the aforementioned increase. Any
person who subsequently applies for benefits under the
Medicaid program, and that person's eligibility to receive
benefits is impaired by the longevity bonus provided by this
section, shall not be entitled to receive the increase
subsequent to the date that the member files application for
benefits under the Medicaid program.
(e) The Board of Control of the Employees' Retirement
System shall determine the amount required to pay the cost of
the longevity bonus provided under this section and shall
notify the chief fiscal officer of each employer of that cost.
The employer shall either pay the full cost in a lump sum or,
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The employer shall either pay the full cost in a lump sum or,
for the fiscal year beginning October 1, 2027, only, pay the
increase in the employer rate in the same manner and from the
same source of funds as salaries of active members are paid.
(f)(1) Unless otherwise provided in subdivision (2),
the longevity bonuses provided under this section shall be
paid to all eligible recipients by the Employees' Retirement
System in October 2026.
(2) For all eligible recipients 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, the longevity bonuses provided under this section shall
be paid by the Employees' Retirement System in October 2026.
Section 3. This act shall become effective immediately
upon its passage and approval by the Governor, or upon its
otherwise becoming a law.
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otherwise becoming a law.
________________________________________________
President and Presiding Officer of the Senate
________________________________________________
Speaker of the House of Representatives
SB154
Senate 11-Mar-26
I hereby certify that the within Act originated in and passed
the Senate.
Patrick Harris,
Secretary.
House of Representatives
Amended and passed: 01-Apr-26
Senate concurred in House amendment 08-Apr-26
By: Senator Albritton
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