Bill Summary – FastDemocracy

 HB79
 207522-1
 By Representative Pettus
 RFD: Ways and Means General Fund
 First Read: 02-FEB-21
 PFD: 11/30/2020
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  207522-1:n:06/08/2020:KMS*/ma LSA2020-1342
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  SYNOPSIS:           This bill would reopen the State Police Tier
              II Plan to any employee of the Alabama State Law
              Enforcement Agency who is certified by the Alabama
              Peace Officers' Standards and Training Commission
              and performs law enforcement duties and would
              modify the Tier II benefits received by State
              Police Tier II members to allow 25-year retirement
              and hazardous duty time, and would clarify that an
              employee of the Alabama State Law Enforcement
              Agency who is certified by the Alabama Peace
              Officers' Standards and Training Commission is a
              state policeman.
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                                 A BILL
                           TO BE ENTITLED
                                 AN ACT
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             To amend Sections 36-27-1 and 36-27-16, as amended
 by Act 2019-221 and Act 2019-316, 2019 Regular Session, and
 41-27-7, Code of Alabama 1975, relating to retirement benefits
                                     Page 1
  for employees who are members of the Employees' Retirement
  System; to reopen the State Police Tier II Plan to any
  employee of the Alabama State Law Enforcement Agency who is
  certified by the Alabama Peace Officers' Standards and
  Training Commission and performs law enforcement duties; to
  modify the Tier II benefits received by all State Police Tier
  II members; and to clarify that employees of the Alabama State
  Law Enforcement Agency are state policemen for retirement
  purposes.
 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
             Section 1. Sections 36-27-1 and 36-27-16, as amended
 by Act 2019-221 and Act 2019-316, 2019 Regular Session, and
 41-27-7, Code of Alabama 1975, are amended to read as follows:
             "36-27-1.
             "When used in this article, the following terms
 shall have the following meanings, respectively, unless the
 context clearly indicates otherwise:
             "(1) RETIREMENT SYSTEM. The Employees' Retirement
 System of Alabama as defined in Section 36-27-2.
             "(2) EMPLOYEE. Any regular employee of the State of
 Alabama whose salary is paid by state warrant by the state,
 except a member of the Legislature of the state, a person who
 is covered or eligible to be covered under the Teachers'
 Retirement System of Alabama or any other retirement system to
 which contributions are made by the state, an elective
 official of the state government, and a temporary employee or
 person engaged under retainer or special agreement. In all
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  cases of doubt the Board of Control shall determine who is an
  employee within the meaning of this article. The term shall
  include any regular employee of the Alabama state hospitals
  and Partlow State School and Hospital and the Alabama State
  Port Authority, however paid.
              "(3) EMPLOYER. The State of Alabama or any
  department, commission, institution, or any other agency of
  and within the state by which an employee is paid, including
  employers as provided in Section 36-27-6.
             "(4) MEMBER. Any employee included in the membership
 of the system as provided in Section 36-27-4.
             "(5) BOARD OF CONTROL. The board provided for in
 Section 36-27-23 to administer the retirement system.
             "(6) MEDICAL BOARD. The board of physicians provided
 for in Section 36-27-23.
             "(7) SERVICE. Service as an employee paid for by an
 employer.
             "(8) PRIOR SERVICE. Service rendered prior to the
 date of establishment of the retirement system for which
 credit is allowable under Section 36-27-11.
             "(9) MEMBERSHIP SERVICE. Service as an employee
 rendered while a member of the retirement system and on
 account of which contributions are made.
             "(10) CREDITABLE SERVICE. "Prior service" plus
 "membership service" rendered since last becoming a member.
                                   Page 3
              "(11) BENEFICIARY. Any person in receipt of a
  pension, an annuity, a retirement allowance, or other benefit
  as provided by this article.
              "(12) REGULAR INTEREST. Interest compounded annually
  at the rate determined by the Board of Control in accordance
  with subsection (f) of Section 36-27-25.
              "(13) ACCUMULATED CONTRIBUTIONS. The sum of all the
  amounts deducted from the compensation of a member credited to
  his or her individual account in the Annuity Savings Fund,
 together with regular interest thereon, as provided in Section
 36-27-24.
             "(14) EARNABLE COMPENSATION. The full rate of
 compensation that would be payable to an employee if he or she
 worked the full normal work-time. In cases where compensation
 includes maintenance, the Board of Control shall fix the value
 of that part of the compensation not paid in money. Earnable
 compensation shall not exceed the limitations imposed by
 Section 401(a)(17) of the Internal Revenue Code for public
 pension funds, except that any employee who was a member of
 the Employees' Retirement System before the first plan year
 beginning after December 31, 1995, shall not be subject to the
 earning limitations set forth in Section 401(a)(17). For Tier
 I plan members, the term earnable compensation for retirement
 purposes shall not include subsistence payments that are made
 to a member and shall include overtime payments that are made
 to a member; however, earnable compensation shall not exceed
 120 percent of any members' annual base compensation as
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  certified by the employer. For Tier II plan members, earnable
  compensation shall include overtime payments that are made to
  the member but shall not include subsistence payments that are
  made to the member and shall not exceed one hundred
  twenty-five percent (125%) of the member's annual base
  compensation, as certified by the employer.
            "(15) AVERAGE FINAL COMPENSATION. For any Tier I
  plan member, the average annual compensation of the member,
  with respect to which he or she had made contributions
 pursuant to subsection (b) of Section 36-27-24 during the
 three years, in his or her last 10 years of creditable service
 for which the average is highest or during his or her entire
 period of creditable service if less than three years; except,
 that for any period prior to November 1, 1959, the
 compensation used in computing the average shall include
 compensation in excess of the maximum amount with respect to
 which members were required to contribute. For any Tier II
 plan member, the average annual compensation of the member,
 with respect to which he or she has made contributions
 pursuant to subsection (b) of Section 36-27-24 during the five
 years, in his or her last ten 10 years of creditable service
 for which the average is highest or during his or her entire
 period of creditable service if less than five years.
           "(16) ANNUITY. Payments for life derived from the
 "accumulated contributions" of a member. All annuities shall
 be payable in equal monthly installments.
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            "(17) PENSION. Payments for life derived from money
  provided by the employer. All pensions shall be payable in
  equal monthly installments.
            "(18) RETIREMENT ALLOWANCE. The sum of the "annuity"
  and the "pension."
            "(19) RETIREMENT. Withdrawal from active service
  with a retirement allowance or optional benefit in lieu
  thereof granted under this article.
            "(20) ANNUITY RESERVE. The present value of all
 payments to be made on account of any annuity or benefit in
 lieu of any annuity computed upon the basis of the mortality
 tables adopted by the Board of Control and regular interest.
           "(21) PENSION RESERVE. The present value of all
 payments to be made on account of any pension or benefit in
 lieu of any pension computed upon the basis of the mortality
 tables adopted by the Board of Control and regular interest.
           "(22) ACTUARIAL EQUIVALENT. A benefit of equal value
 when computed upon the basis of the mortality tables adopted
 by the Board of Control and regular interest.
           "(23) STATE POLICEMAN. An employee in the classified
 service under the Merit System Act approved by the State
 Personnel Board to perform the duties of highway patrolman or
 a beverage control agent or a crime investigator. The term
 includes any employee hired by of the Alabama State Law
 Enforcement Agency after January 1, 2015, who is certified by
 the Alabama Peace Officers' Standards and Training Commission
 and performs law enforcement duties. Such an employee of the
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  Alabama State Law Enforcement Agency shall pay the same
  employee contribution rate as and receive the same benefits as
  Tier II law enforcement officers, as defined by Section
  36-27-59(a)(3). The term shall not include a member employed
  as a policeman under Section 36-27-6.
            "(24) TIER I PLAN. The defined benefit pension plan
  provided by the Retirement System to Tier I plan members.
            "(25) TIER II PLAN. The defined benefit pension plan
  provided by the Retirement System to Tier II plan members.
           "(26) TIER I PLAN MEMBER. Any member of the
 Retirement System who had service for which he or she received
 credit in the Employees' Retirement System or in the Teachers'
 Retirement System prior to January 1, 2013.
           "(27) TIER II PLAN MEMBER. Any member of the
 Retirement System who first began eligible employment with an
 Employees' Retirement System or a Teachers' Retirement System
 participating employer on or after January 1, 2013, and who
 had no eligible service in the Employees' Retirement System or
 the Teachers' Retirement System prior to January 1, 2013.
           "36-27-16.
           "(a)(1) RETIREMENT, ETC., OF EMPLOYEES GENERALLY;
 ELIGIBILITY FOR SERVICE RETIREMENT BENEFITS.
           "a. Any Tier I plan member who withdraws from
 service upon or after attainment of age 60 and any Tier II
 plan member who withdraws from service upon or after
 attainment of age 62 may retire upon written application to
 the Board of Control setting forth at what time, not less than
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  30 days nor more than 90 days subsequent to the execution and
  filing thereof, he or she desires to be retired; provided,
  that any such member who became a member on or after October
  1, 1963, shall have completed 10 or more years of creditable
  service; provided further, that a Tier I or Tier II plan
  member employed as a state policeman shall be eligible to file
  application for service retirement upon attaining age 52 and a
  Tier II plan member employed as a state policeman or employed
  as a correctional officer, firefighter, or law enforcement
 officer as defined in Section 36-27-59 with at least ten 10
 years of creditable service as a correctional officer,
 firefighter, or law enforcement officer shall be eligible to
 file application for service retirement upon attaining age 56.
           "b. Any Tier I plan member who has attained age 60,
 or age 52 in the case of a state policeman and any Tier II
 plan member who has attained age 62, or age 56 52 in the case
 of a state policeman, or age 56 in the case of a correctional
 officer, firefighter, or law enforcement officer as defined in
 Section 36-27-59   who has at least ten 10 years of creditable
 service as a correctional officer, firefighter, or law
 enforcement officer, and has previously withdrawn from service
 may retire upon written application to the Board of Control
 setting forth at what time, not less than 30 days nor more
 than 90 days subsequent to the execution and filing thereof,
 he or she desires to be retired; provided, the member shall
 have at the time of his or her withdrawal from service
 completed the age and service requirements established by the
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  Board of Control for eligibility for deferred benefits;
  provided, that such minimum number of years of creditable
  service shall not be less than 10 years nor more than 25
  years.
             "c. In addition to any law or part of law relating
  to service retirement under the Employees' Retirement System
  of Alabama, any Tier I plan member of the Employees'
  Retirement System or Tier II plan member employed as a state
  policeman who withdraws from service after completion of not
 less than 25 years of creditable service may retire without a
 reduction in retirement allowance upon written application to
 the Board of Control of the Employees' Retirement System
 setting forth the first day of which month, not less than 30
 days or more than 90 days subsequent to the execution and
 filing thereof, he or she desires to be retired, provided that
 no person whose employer participates in the Employees'
 Retirement System under Section 36-27-6 shall be entitled to
 the benefits provided in this paragraph unless such employer
 elects to come under the provisions of the paragraph. Any
 employer making such election must bear the cost of such
 benefit.
            "(2) AMOUNT OF SERVICE RETIREMENT ALLOWANCE.
            "a. Upon retirement from service a Tier I plan
 member shall receive a service retirement allowance which
 shall consist of:
            "1. An annuity which shall be the actuarial
 equivalent of his or her accumulated contributions at the time
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  of his or her retirement; except, that in the case of a state
  policeman who has completed 20 years of creditable service as
  a state policeman who retires after age 56 but prior to age
  60, the annuity shall be equal to the annuity that would have
  been payable upon service retirement at age 60 had the member
  continued in service to age 60 without change in compensation;
            "2. A pension which shall be equal to the annuity
  allowance at age of retirement, but not to exceed an annuity
  allowable at age 65, computed on the basis of contributions
 made prior to attainment of age 65; except, that in the case
 of a state policeman who has completed 20 years of creditable
 service as a state policeman who retires after age 56 but
 prior to age 60, the pension shall be equal to the annuity
 that he or she would have received had he or she contributed
 to age 60 without change in compensation; and
           "3. An additional pension, if he or she has a prior
 service certificate in full force and effect, which shall be
 equal to the annuity which would have been provided at the age
 of retirement, but which shall not exceed an annuity allowable
 at age 65 by twice the contributions which he or she would
 have made during the period of prior service with which he or
 she is credited had the system been in operation and had he or
 she contributed thereunder; except, that in case of a state
 policeman who has completed 20 years of creditable service as
 a state policeman who retired after age 56 but prior to age
 60, an additional pension, if he or she has a prior service
 certificate in full force and effect, which shall be equal to
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  the annuity which would have been provided at age 60, but
  which shall not exceed an annuity allowable at age 60 by twice
  the contributions which he or she would have made during the
  period of prior service with which he or she is credited had
  the system been in operation and had he or she contributed
  thereunder.
            "b. Notwithstanding the provisions of subparagraphs
  1, 2, and 3 of paragraph a. of this subdivision, a state
  policeman who is a Tier I plan member and who has completed 20
 years of service as a state policeman who retires after age 52
 but prior to age 56 shall receive:
           "1. An annuity which shall be equal to the annuity
 that would have been payable had the member continued in
 service for four years without change in compensation;
           "2. A pension which shall be equal to the annuity
 that he or she would have received had he or she contributed
 for four years without change in compensation; and
           "3. An additional pension, if he or she has a prior
 service certificate in full force and effect, which shall be
 equal to the annuity which would have been provided at the age
 of retirement, but which shall not exceed an annuity allowable
 at the age of retirement plus four years by twice the
 contributions which he or she would have made during the
 period of prior service with which he or she is credited had
 the system been in operation and had he or she contributed
 thereunder. In lieu of a de