The bill establishes a new procedure for granting annual benefit increases to retirees and beneficiaries of the Employees' Retirement System and the Teachers' Retirement System in Alabama, effective from the fiscal year beginning October 1, 2024. It stipulates that no benefit increase shall be paid unless it is authorized by a separate legislative act that specifies the amount and eligible classes of retirees. Additionally, the annual cost of the increase must be included and appropriated in the respective State General Fund or Education Trust Fund appropriation acts, with participating employers required to pay a separate employer rate for these increases. If the necessary funding is not appropriated in a given fiscal year, the benefit increase will not be paid, but it may be resumed in subsequent years if included in future appropriations.

The bill also includes legislative findings that assert any benefit increases provided under this act will not increase the unfunded liability of the retirement systems, as long as the annual authorization and full funding are adhered to. It clarifies that any accounting standards suggesting otherwise will be disregarded, and audits must reflect that no future liability is attributed to the Retirement Systems of Alabama due to increases granted under this act. Furthermore, the act does not affect any previous cost-of-living increases or one-time bonuses provided to retirees under prior legislation. The act is set to take effect on June 1, 2024.

Statutes affected:
Introduced: 36-27-6, 36-27-7, 36-27-7, 36-27-6, 36-27-7, 36-27-7
Engrossed: 36-27-6, 36-27-7, 36-27-7, 36-27-6, 36-27-7, 36-27-7, 36-27-6, 36-27-7, 36-27-7