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SB315 INTRODUCED
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SB315
4UCXU33-1
By Senators Figures, Stewart, Coleman-Madison, Kitchens,
Kelley, Beasley, Hatcher, Woods, Jones, Williams, Bell,
Butler, Chesteen, Weaver, Barfoot, Waggoner, Price,
Smitherman, Singleton
RFD: Finance and Taxation Education
First Read: 17-Feb-26
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4UCXU33-1 02/17/2026 KMS (L)cr 2026-870
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First Read: 17-Feb-26
SYNOPSIS:
This bill would provide for a benefit increase
for certain eligible state and local retirees and
beneficiaries of the Employees' Retirement System and
certain eligible retirees and beneficiaries of the
Teachers' Retirement System effective October 1, 2026.
A BILL
TO BE ENTITLED
AN ACT
Relating to the Employees' Retirement System and the
Teachers' Retirement System; to provide for a benefit increase
for certain state and local retirees and beneficiaries of the
Employees' Retirement System and certain eligible retirees and
beneficiaries of the Teachers' Retirement System effective
October 1, 2026, subject to the annualized benefit increase
procedure for retirees and beneficiaries under the Employees'
Retirement System and the Teachers' Retirement System,
respectively.
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
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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
who is receiving or is entitled to receive a monthly allowance
from the Employees' Retirement System, shall receive a
cost-of-living increase of two 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
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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
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 whose
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
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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
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.
(g)(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
two 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 section. Any employer making the election
to come under this section 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
section at any time and have this section 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
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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 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, 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 section,
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
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section shall be distributed from all funds in proportion to
the salaries paid therefrom for active members.
(h)(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,
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 two 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 section.
(2) Commencing October 1, 2026, beneficiaries of
Employees' Retirement System pensioners described in
subdivision (1) shall receive an increase of two 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 who is receiving a monthly benefit not
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Retirement System and who is receiving a monthly benefit not
administered by the Employees' Retirement System shall receive
an increase of two 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
organization of the state elects to fund the increase.
(i) 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 whose
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 application for benefits under the Medicaid
Program.
Section 2. (a) Commencing October 1, 2026, and subject
to Section 16-25-35, Code of Alabama 1975, each individual,
whose effective date of retirement for purposes of receiving
benefits from the Teachers' Retirement System is prior to
October 1, 2025, who is receiving or is entitled to receive a
monthly allowance from the Teachers' Retirement System, and
who has 25 years or more of service, shall receive a
cost-of-living increase of two percent in his or her gross
monthly benefit.
(b) Beneficiaries of deceased members or deceased
retirees, if the date of death for the deceased member was
prior to October 1, 2026, the effective date of retirement for
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prior to October 1, 2026, the effective date of retirement for
the deceased retiree for purposes of receiving benefits from
the Teachers' Retirement System was prior to October 1, 2017,
and the deceased retiree had 25 years or more of service,
shall receive the cost-of-living increase in the amount
attained by the retiree.
(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 the
provisions of Section 16-25-35, Code of Alabama 1975, the
Board of Control of the Teachers' Retirement System shall
determine the amount required to pay the total cost of
actuarial liability of the increased allowance provided under
this section as a per centum rate of earnable compensation of
the member and shall notify the chief fiscal officer of each
employer of that cost. In the fiscal year beginning October 1,
2027, only, employers shall pay the full cost as an increase
in the employer rate in the same manner and from the same
source of funds as provided in Section 16-25-21, Code of
Alabama 1975.
(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
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aforementioned increase. Any individual who subsequently
applies for benefits under the Medicaid Program and whose
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 16-25-35, Code of Alabama 1975,
the Teachers' 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 Education Trust 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
identified and appropriated in the appropriation act, eligible
retirees and beneficiaries shall not receive, and the
Teachers' 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 3. This act shall become effective on October
1, 2026.
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