1 HB264
2 209357-1
3 By Representative Ingram
4 RFD: Ways and Means General Fund
5 First Read: 02-FEB-21
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1 209357-1:n:01/27/2021:KMS*/cr LSA2021-252
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8 SYNOPSIS: This bill would modify the retirement
9 benefits for Tier II plan members of the Employees'
10 Retirement System by providing 30-year service
11 retirement, allowing the conversion of sick leave
12 into creditable service, and, for firefighters, law
13 enforcement officers, and correctional officers,
14 providing hazardous duty time.
15 This bill would also increase the Tier II
16 plan member contribution rate.
17
18 A BILL
19 TO BE ENTITLED
20 AN ACT
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22 To amend Sections 36-26-36.1, 36-27-16, as amended
23 by Act 2019-221 and Act 2019-316, 2019 Regular Session,
24 36-27-24, and 36-27-59, Code of Alabama 1975, relating to
25 retirement benefits for employees who are members of the
26 Employees' Retirement System; to modify the retirement
27 benefits for Tier II plan members of the system by providing
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1 30-year service retirement, allowing the conversion of sick
2 leave into creditable service, and, for firefighters, law
3 enforcement officers, and correctional officers, providing
4 hazardous duty time; and to increase the Tier II plan member
5 contribution rate.
6 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
7 Section 1. Sections 36-26-36.1, 36-27-16, as
8 amended by Act 2019-221 and Act 2019-316, 2019 Regular
9 Session, 36-27-24, and 36-27-59 of the Code of Alabama 1975,
10 "36-26-36.1.
11 "(a) Any Tier I or Tier II plan member of the
12 Teachers' or Employees' Retirement System of Alabama not
13 otherwise covered by a provision to convert unused sick leave
14 into membership service for purposes of service retirement
15 may, at their option and in lieu of receiving payment for 50
16 percent of their accrued and unused sick leave at the time of
17 their retirement as provided in Section 36-26-36, or any other
18 payment that may be provided for such unused sick leave, use
19 their accrued sick leave, up to a maximum number of 180
20 accrued sick leave days or as otherwise allowed by law,
21 whichever is greater, to be included as membership service in
22 determining the total years of creditable service in the
23 Employees' Retirement System of Alabama or the Teachers'
24 Retirement System of Alabama; provided that no employee of an
25 employer participating in the Employees' Retirement System
26 pursuant to Section 36-27-6 shall be entitled to the benefits
27 provided herein unless such employer shall elect to come under
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1 the provisions of this section and further elects to fund the
2 benefits provided herein. Unused sick leave may be converted
3 to membership service only for the purpose of applying for
4 service retirement and may be considered in the determination
5 of eligibility for retirement. The conversion shall not apply
6 to eligibility for deferred retirement. It is further provided
7 that if a Tier I or Tier II plan member eligible for service
8 retirement is also eligible for disability retirement the
9 member may elect disability retirement and also receive credit
10 for accumulated sick leave pursuant to this section. No Tier I
11 or Tier II plan member shall receive both service credit
12 provided for by this section and payment or partial payment
13 for accrued sick leave pursuant to any other provision of law.
14 "(b) The conversion of accrued sick leave into
15 creditable service provided in this section shall not apply to
16 any Tier II plan member.
17 "36-27-16.
18 "(a)(1) RETIREMENT, ETC., OF EMPLOYEES GENERALLY;
19 ELIGIBILITY FOR SERVICE RETIREMENT BENEFITS.
20 "a. Any Tier I plan member who withdraws from
21 service upon or after attainment of age 60 and any Tier II
22 plan member who withdraws from service upon or after
23 attainment of age 62 may retire upon written application to
24 the Board of Control setting forth at what time, not less than
25 30 days nor more than 90 days subsequent to the execution and
26 filing thereof, he or she desires to be retired; provided,
27 that any such member who became a member on or after October
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1 1, 1963, shall have completed 10 or more years of creditable
2 service; provided further, that a Tier I plan member employed
3 as a state policeman shall be eligible to file application for
4 service retirement upon attaining age 52 and a Tier II plan
5 member employed as a state policeman or employed as a
6 correctional officer, firefighter, or law enforcement officer
7 as defined in Section 36-27-59 with at least ten 10 years of
8 creditable service as a correctional officer, firefighter, or
9 law enforcement officer shall be eligible to file application
10 for service retirement upon attaining age 56.
11 "b. Any Tier I plan member who has attained age 60,
12 or age 52 in the case of a state policeman and any Tier II
13 plan member who has attained age 62, or age 56 in the case of
14 a state policeman or in the case of a correctional officer,
15 firefighter, or law enforcement officer as defined in Section
16 36-27-59 who has at least ten 10 years of creditable service
17 as a correctional officer, firefighter, or law enforcement
18 officer, and has previously withdrawn from service may retire
19 upon written application to the Board of Control setting forth
20 at what time, not less than 30 days nor more than 90 days
21 subsequent to the execution and filing thereof, he or she
22 desires to be retired; provided, the member shall have at the
23 time of his or her withdrawal from service completed the age
24 and service requirements established by the Board of Control
25 for eligibility for deferred benefits; provided, that such
26 minimum number of years of creditable service shall not be
27 less than 10 years nor more than 25 years.
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1 "c. In addition to any law or part of law relating
2 to service retirement under the Employees' Retirement System
3 of Alabama, any Tier I plan member of the Employees'
4 Retirement System who withdraws from service after completion
5 of not less than 25 years of creditable service, or any Tier
6 II plan member, who withdraws from service after completion of
7 not less than 30 years of creditable service, may retire
8 without a reduction in retirement allowance upon written
9 application to the Board of Control of the Employees'
10 Retirement System setting forth the first day of which month,
11 not less than 30 days or more than 90 days subsequent to the
12 execution and filing thereof, he or she desires to be retired,
13 provided that no person whose employer participates in the
14 Employees' Retirement System under Section 36-27-6 shall be
15 entitled to the benefits provided in this paragraph for Tier I
16 plan members unless such employer elects to come under the
17 provisions of the paragraph. Any employer making such election
18 must bear the cost of such benefit.
19 "(2) AMOUNT OF SERVICE RETIREMENT ALLOWANCE.
20 "a. Upon retirement from service, a Tier I plan
21 member shall receive a service retirement allowance which
22 shall consist of:
23 "1. An annuity which shall be the actuarial
24 equivalent of his or her accumulated contributions at the time
25 of his or her retirement; except, that in the case of a state
26 policeman who has completed 20 years of creditable service as
27 a state policeman who retires after age 56 but prior to age
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1 60, the annuity shall be equal to the annuity that would have
2 been payable upon service retirement at age 60 had the member
3 continued in service to age 60 without change in compensation;
4 "2. A pension which shall be equal to the annuity
5 allowance at age of retirement, but not to exceed an annuity
6 allowable at age 65, computed on the basis of contributions
7 made prior to attainment of age 65; except, that in the case
8 of a state policeman who has completed 20 years of creditable
9 service as a state policeman who retires after age 56 but
10 prior to age 60, the pension shall be equal to the annuity
11 that he or she would have received had he or she contributed
12 to age 60 without change in compensation; and
13 "3. An additional pension, if he or she has a prior
14 service certificate in full force and effect, which shall be
15 equal to the annuity which would have been provided at the age
16 of retirement, but which shall not exceed an annuity allowable
17 at age 65 by twice the contributions which he or she would
18 have made during the period of prior service with which he or
19 she is credited had the system been in operation and had he or
20 she contributed thereunder; except, that in case of a state
21 policeman who has completed 20 years of creditable service as
22 a state policeman who retired after age 56 but prior to age
23 60, an additional pension, if he or she has a prior service
24 certificate in full force and effect, which shall be equal to
25 the annuity which would have been provided at age 60, but
26 which shall not exceed an annuity allowable at age 60 by twice
27 the contributions which he or she would have made during the
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1 period of prior service with which he or she is credited had
2 the system been in operation and had he or she contributed
3 thereunder.
4 "b. Notwithstanding the provisions of subparagraphs
5 1, 2, and 3 of paragraph a. of this subdivision, a state
6 policeman who is a Tier I plan member and who has completed 20
7 years of service as a state policeman who retires after age 52
8 but prior to age 56 shall receive:
9 "1. An annuity which shall be equal to the annuity
10 that would have been payable had the member continued in
11 service for four years without change in compensation;
12 "2. A pension which shall be equal to the annuity
13 that he or she would have received had he or she contributed
14 for four years without change in compensation; and
15 "3. An additional pension, if he or she has a prior
16 service certificate in full force and effect, which shall be
17 equal to the annuity which would have been provided at the age
18 of retirement, but which shall not exceed an annuity allowable
19 at the age of retirement plus four years by twice the
20 contributions which he or she would have made during the
21 period of prior service with which he or she is credited had
22 the system been in operation and had he or she contributed
23 thereunder. In lieu of a determination of the actual
24 compensation of a member that was received during such prior
25 service, the Board of Control may use for the purpose of this
26 article the compensation rate which, if it had progressed with
27 the rates of salary increase shown in the tables as prescribed
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1 in subsection (n) of Section 36-27-23, would have resulted in
2 the same average salary of the member for the five years
3 immediately preceding the date of establishment as the records
4 show the member actually received.
5 "c. The annual service retirement pension payable to
6 a Tier I plan member not employed as a state policeman
7 retiring on or after October 1, 1975, shall not be less than
8 an amount which, when added to his or her annuity, is equal to
9 the greater of the following two amounts:
10 "1. Two and one-eightieth percent of the member's
11 average final compensation multiplied by the number of years
12 of his or her creditable service; or
13 "2. If he or she became a member before October 1,
14 1965, $72.00 multiplied by the number of years of his or her
15 creditable service not in excess of 25 years.
16 "d. The annual service retirement pension payable to
17 a Tier I plan member employed as a state policeman retiring on
18 or after October 1, 1975, shall not be less than an amount
19 which, when added to his or her annuity is equal to the
20 greater of the following two amounts:
21 "1. Two and seven-eighths percent of the member's
22 average final compensation multiplied by the number of years
23 of his or her creditable service. Creditable service for any
24 state policeman under the age of 56 years who has completed 20
25 years of creditable service as a state policeman shall include
26 a bonus equal to four additional years. Creditable service for
27 a state policeman 56 years or older shall include a bonus
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1 equal to the years or portion thereof remaining until the
2 member reaches age 60; or
3 "2. If he or she became a member before October 1,
4 1965, $86.40 multiplied by the number of years of his or her
5 creditable service not in excess of 25 years; provided,
6 however, that if such member has completed 20 years of
7 creditable service as a state policeman and has not attained
8 age 60 at the time of retirement, the pension shall be
9 determined as provided in this subparagraph on the basis of
10 the number of years of creditable service which he or she
11 would have had if he or she had remained in service for four
12 years, except that, in the case of those state policemen
13 retiring at age 56 or after, the number of years in
14 determining the pension shall not exceed the number of years
15 of creditable service which he or she would have had if he or
16 she had remained in service to age 60.
17 "e. Upon retirement from service, a Tier II plan
18 member who is not employed as a state policeman shall receive
19 a service retirement allowance which shall consist of an
20 annuity which shall be the actuarial equivalent of the
21 member's accumulated contributions at the time of retirement
22 and a pension which, when added to the member's annuity, shall
23 be equal to one and sixty-five hundredths percent (1.65%) of
24 the member's average final compensation multiplied by the
25 number of years of creditable service. Notwithstanding the
26 foregoing, the service retirement allowance shall not exceed
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1 eighty percent (80%) of the member's average final
2 compensation.
3 "f. Upon retirement from service, a Tier II plan
4 member who is employed as a state policeman shall receive a
5 service retirement allowance which shall consist of an annuity
6 which shall be the actuarial equivalent of the member's
7 accumulated contributions at the time of retirement and a
8 pension which, when added to the member's annuity, shall be
9 equal to two and three-eighths percent (2.375%) of the
10 member's average final compensation multiplied by the member's
11 number of years of creditable service. Notwithstanding the
12 foregoing, the service retirement allowance shall not exceed
13 eighty percent (80%) of the member's average final
14 compensation.
15 "g. Anything in this article to the contrary
16 notwithstanding, in the application of the foregoing
17 provisions of this subdivision to a member whose creditable
18 service includes a period of service as a state policeman and
19 a period of service in another employment classification, the
20 benefit rates applicable to a member employed as a state
21 policeman shall apply to all creditable service as a state
22 policeman, and the benefit rates applicable to a member not
23 employed as a state policeman shall apply to all creditable
24 service, but in all other respects the pension under this
25 subdivision shall be determined on the basis of the member's
26 employment classification at the time of his or her withdrawal
27 from service.
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1 "h. The annual service retirement pension payable to
2 any state employee who had attained age 60 on or before
3 October 1, 1945, who declined membership in the Employees'
4 Retirement System of Alabama in the manner prescribed in
5 Section 36-27-4 and who retires as a state employee after
6 completing a minimum of 15 years' service shall be $72.00
7 multiplied by the number of years of his or her service not in
8 excess of 25 years.
9 "(b)(1) RETIREMENT OF DISABLED EMPLOYEES;
10 ELIGIBILITY FOR DISABILITY RETIREMENT BENEFITS.
11 "a. Upon application of a Tier I plan member in
12 service or of his or her employer, any member who has had 10
13 or more years of creditable service who becomes disabled may
14 be retired on a disability retirement allowance by the Board
15 of Control not less than 30 nor more than 90 days next
16 following the date of filing of the application; provided,
17 that the medical board, after a medical examination of the
18 member, shall certify that the member is mentally or
19 physically incapacitated for the further performance of duty,
20 that the incapacity is likely to be permanent, and that the
21 member should be retired. Upon the application of a Tier II
22 plan member in service or his or her employer, any member who
23 has had 10 or more years of creditable se