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 October 1, 2026. Under this legislation, no benefit increases will be paid unless they are authorized by a separate legislative act that specifies the amount and eligible classes of retirees. Additionally, the annual cost of any approved increase must be included and appropriated in the respective State General Fund or Education Trust Fund appropriation acts. If the required funding is not appropriated in a given fiscal year, eligible retirees will not receive the increase, although it may be resumed in subsequent years if included in future appropriations.

The bill also includes provisions to ensure that any benefit increases do not contribute to the unfunded liability of the retirement systems. It explicitly states that any accounting standards suggesting otherwise should be disregarded, and audits must reflect that no future liability will arise from increases granted under this act. Furthermore, starting November 4, 2026, only one increase per legislative quadrennium may be granted. The act does not affect any previous cost-of-living increases or bonuses provided to retirees under prior legislation.

Statutes affected:
Introduced: 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
Enrolled: 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