|Committee: Finance and Taxation General Fund||Sponsor: Ellis|
|Analyst: Daniel Davenport||Date: 02/22/2022|
House Bill 155 as passed the House of Representatives allows the surviving spouse, who is designated as the sole beneficiary, of a member of one of the following plans who dies in active service, to choose the retirement benefit that provides a lifetime benefit of 100% of the amount the member and surviving spouse would have received upon retirement, known as “Option 2”: (1) the Teachers’ Retirement System (TRS); (2) the Employees’ Retirement System (ERS); or (3) the Judicial Retirement Fund (JRF), covering the District Attorneys’ Plan and the Judges’ and Clerks’ Plan
According to the actuary for the Retirement Systems of Alabama (RSA), this bill would increase the unfunded liability of TRS and ERS by an estimated $11.6 million and $5.2 million, respectively. The TRS liability may be offset by increasing the TRS employer contribution rates set by the Legislature for Tier II and Tier I by 0.01% and 0.02%, respectively. These TRS rate increases would increase total TRS employer contributions by an estimated $1.19 million annually beginning in FY 2023, with approximately $690,000 being paid from the Education Trust Fund appropriation to agencies/entities. Correspondingly, the ERS liability would be offset by increasing the ERS employer contribution rates for Tier II and Tier I by 0.05% for both tiers. These ERS rate increases would increase total ERS employer contributions by an estimated $738,000 annually beginning in FY 2023, with approximately $206,000 being paid from the State General Fund appropriation to agencies/entities.
|Greg Albritton, Chairperson|
Finance and Taxation General Fund