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2025 Regular Session Introduced by Troy Hebert

House Bill 158 ensures benefit increases for ERS and TRS retirees are fully funded without raising unfunded liabilities, protecting financial integrity and sustainability.

Withdrawn prior to introduction.

Overview

House Bill 158, titled "RSA, procedure established for funding benefit increases of ERS and TRS retirees," was introduced on February 4, 2025, and has been enacted as Act 2025-336. The bill establishes a formal procedure for funding benefit increases for retirees under the Employees' Retirement System (ERS) and the Teachers' Retirement System (TRS) in Alabama.

Purpose and Intent

The primary intent of HB 158 is to ensure that any benefit increases for retirees and beneficiaries of the ERS and TRS are funded in a manner that does not increase the unfunded liability of these retirement systems. This is achieved by requiring that the costs of any proposed benefit increases be identified and appropriated in the annual State General Fund and Education Trust Fund appropriation acts.

Key Provisions

Funding Procedure:

No benefit increases can be granted unless a separate legislative act specifies the amount of the increase and the class of eligible retirees.
The cost of the increase must be determined by the system's actuary and included in the annual appropriations.

Implementation Timeline:

The provisions of the bill will take effect starting October 1, 2026.

Limitations on Increases:

Beginning November 4, 2026, only one benefit increase may be granted per legislative quadrennium.

Exemptions:

The bill does not apply to previous cost-of-living increases or one-time bonuses provided under prior legislation.

Impact

Affected Parties:

The bill primarily affects retirees and beneficiaries of the ERS and TRS, as well as local participating employers in the ERS.

Financial Implications:

The bill is designed to prevent any increase in the unfunded liability of the retirement systems by ensuring that any benefit increases are fully funded through the annual appropriations process.

Procedural Aspects

Legislative Process:

The bill underwent several readings and amendments in both the House and Senate before being enacted on May 14, 2025.
It was reported out of the Finance and Taxation General Fund Committee and passed with amendments that refined the language regarding the timing and limitations of benefit increases.

Conclusion

House Bill 158 establishes a structured approach to funding benefit increases for retirees under the ERS and TRS, ensuring fiscal responsibility and sustainability for Alabama's retirement systems. By requiring legislative approval and funding through appropriations, the bill aims to protect the financial integrity of these systems while providing for the needs of retirees.

Bill