HB172 By Representative Ingram RFD County and Municipal Government Rd 1 06-FEB-20

SYNOPSIS: Under existing law, there are 13 trustees appointed or elected to the State Employees’ Retirement System Board of Control. Currently, two trustees represent employees of employers participating pursuant to Section 36-27-6.

This bill would add one additional trustee of the board for an employee of an employer participating pursuant to Section 36-27-6 and one additional trustee of the board for an employee or retiree of an employer participating pursuant to Section 36-27-6.

This bill would also include diversity language for the board and would allow a trustee who retires from active service after appointment or election to continue to serve until the expiration of the trustee's term.

A BILL TO BE ENTITLED AN ACT

To amend Section 36-27-23 of the Code of Alabama 1975, to include additional representatives to the State Employees' Retirement System Board of Control; to add diversity language; and to authorize a trustee who retires from active service after appointment or election to continue to serve until the expiration of the trustee’s term.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Section 36-27-23, Code of Alabama 1975, is amended to read as follows:

§36-27-23.

"(a) The general administration and responsibility for the proper operation of the retirement system and for making effective the provisions of this article are hereby vested in a board of trustees which shall be known as the Board of Control.

"(b) The board shall consist of 13 15 trustees as follows:

"(1) The Governor, ex officio, who shall be chairman.

"(2) The State Treasurer, ex officio.

"(3) The State Personnel Director, ex officio.

"(4) The Director of Finance, ex officio.

"(5) Three members of the retirement system, to be appointed by the Governor, no two of whom shall be from the same department of the state government nor from any department of which an ex officio trustee is the head. The state employees appointed pursuant to this section shall be Merit System employees with at least ten years of creditable state service and shall not be a department head or an assistant department head. The terms of office of the three members appointed by the Governor shall begin immediately after they have qualified and taken the oath of office. For appointments made after February 1, 2020, the Governor shall coordinate his or her appointments to assure that Board of Control membership is inclusive and reflects the racial, gender, and economic diversity of the state.

"(6) Two members of the State Employees' Retirement System who shall be vested in the system and elected by a majority vote of the participating full-time state employees who are members of the system, through the use of a statewide ballot conducted by the Secretary-Treasurer under rules promulgated by the Board of Control. For their original terms, one shall serve for a two-year term and one shall serve for a three-year term. Thereafter, their successors each shall serve for a four-year term.

"At the expiration of terms of office of the respective original trustees elected under this subdivision and every four years thereafter, their successors shall be elected in the same manner as provided by this subdivision.

"(7) One member from the ranks of retired state employees and one member from the ranks of retired employees of a city, a county, or a public agency each of whom is an active beneficiary of the system shall be elected by a majority vote of the participating retired beneficiaries of the system. The retired state employee member shall serve for a four-year term beginning October 1, 1984, the member who is a retired employee of a city, a county or a public agency shall serve for a three-year term, beginning October 1, 1984, provided after the expiration date of the initial terms provided in this subdivision each term shall be for a period of three years.

"The retired members shall be elected in a statewide ballot conducted by the Secretary-Treasurer under rules promulgated by the Board of Control. The Board of Directors of the Alabama Retired State Employees' Association shall submit no more than two nominations for each retired member position. The Board of Control shall determine the procedure for selecting additional candidates. The ballots shall be conducted prior to October 1, 1984, and each applicable year thereafter in order that the trustees can take office by October 1, next following such election.

"(8)a. Two Four members of the retirement system who shall be are employed by or retired from an employer participating pursuant to Section 36-27-6, who shall be elected by a majority vote of the members of the retirement system who are, as provided in this section, either the full-time employees or the full-time employees of those employers participating pursuant to Section 36-27-6, and who are members of the system. For their original terms one shall serve a three-year term and one shall serve a four-year term. Thereafter, their The members of the retirement system who are elected and their successors each shall serve for a four-year term., except as provided to achieve staggered terms. The four members of the retirement system elected pursuant to this subdivision shall include:

"1. Effective with the election following the conclusion of the term of office held by the trustee in office on the effective date of this act and elected to a term ending September 30, 2022, as provided by this subdivision, one member of the retirement system who is a full-time employee of a participating municipality or city shall be elected by a majority vote of the full-time employees of the participating municipalities or cities.

"2. One member of the retirement system who is a full-time employee of a participating county shall be elected by a majority vote of the full-time employees of the participating counties. The original term of office shall begin immediately after the individual has been elected and taken the oath of office and, in order to achieve staggered terms, the original term shall expire on September 30, 2024.

"3. One member of the retirement system who is a full-time employee or retiree of an entity participating pursuant to Section 36-27-6, shall be elected by a majority vote of the full-time employees and retirees of the participating entities. The original term of office shall begin immediately after the individual has been elected and taken the oath of office and, in order to achieve staggered terms, the original term shall expire on September 30, 2025.

"4. Effective with the election following the conclusion of the term of office held by the trustee in office on the effective date of this act and elected to a term ending September 30, 2023 as provided by this subdivision, one member of the retirement system who is a full-time employee of an entity participating pursuant to Section 36-27-6, other than a municipality, city, or county, shall be elected by a majority vote of the full-time employees of those participating entities.

"b. The election elections shall be conducted by the Secretary-Treasurer through use of a statewide ballot in accordance with rules promulgated adopted by the Board of Control, which shall include a nomination petition of not less than 50 eligible voters. The election provided herein in subparagraph 2. shall be conducted prior to October 1, 1991 2020., and each The election provided in subparagraph 3. shall be considered prior to October 1, 2021. Each applicable year thereafter, all elections shall be conducted in the manner set forth in this subdivision in order that the trustees can take office October 1, next following such election.

"(c) If a vacancy occurs in the office of a trustee, the vacancy shall be filled for the unexpired term in the same manner as the office was previously filled, except that of the trustees elected under subdivision (7) of subsection (b). In that event the vacancy for the unexpired term shall be filled by an appointment by the Board of Control of the Employees' Retirement System from a list of three retired employees furnished him by the Board of Directors of the Alabama Retired State Employees' Association. Provided, however, a trustee who retires from active service after the trustee’s appointment or election may continue to serve until the expiration of the term as described in this section.

"(d) The trustees shall serve without compensation for their services as trustees, but they shall be reimbursed from the Expense Fund for all necessary expenses that they may incur through service on the Board of Control.

"(e) Each trustee shall, within 10 days after his appointment, take an oath of office that, so far as it devolves upon him, he will diligently and honestly administer the affairs of the Board of Control and that he will not knowingly violate or willingly permit to be violated any of the provisions of law applicable to the retirement system. Such oath shall be subscribed to by the member making it, certified by the officer before whom it is taken and immediately filed in the office of the Secretary of State.

"(f) Each trustee shall be entitled to one vote in the Board of Control. Seven votes in favor of any decision shall be necessary for a decision by the trustees at any meeting of said board.

"(g) Subject to the limitations of this article, the Board of Control shall, from time to time, establish rules and regulations for the administration of the funds created by this article and for the transaction of its business.

"(h) The Board of Control, by a majority vote of all trustees, shall elect a Secretary-Treasurer who shall serve as the chief executive officer of the retirement system. The Board of Control shall engage such actuarial and other special services as shall be required to transact the business of the retirement system. The compensation of all persons engaged by the board, with the exception of clerical employees who shall be employed under the provisions of the Merit System Act, and all other expenses of the board necessary for the operation of the retirement system shall be paid at such rates and in such amounts as the board shall approve.

"(i) The Board of Control shall keep in convenient form such data as shall be necessary for actuarial valuation of the various funds of the retirement system and for checking the experience of the system.

"(j) The Board of Control shall keep a record of all its proceedings which shall be open to public inspection. It shall publish annually a report showing the fiscal transactions of the retirement system for the preceding year, the amount of the accumulated cash and securities of the system and the last balance sheet showing the financial condition of the system by means of an actuarial valuation of the assets and liabilities of the retirement system.

"(k) The Attorney General of the state shall be the legal adviser of the Board of Control.

"(l) The Board of Control shall designate a medical board to be composed of three physicians not eligible to participate in the retirement system. If required, other physicians may be employed to report on special cases. The medical board shall arrange for and pass upon all medical examinations required under the provisions of this chapter and shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement and shall report in writing to the Board of Control its conclusions and recommendations upon all matters referred to it.

"(m) The Board of Control shall designate an actuary who shall be the technical adviser of the Board of Control on matters regarding the operation of the funds created by the provisions of this article and shall perform such other duties as are required in connection therewith.

"(n) Immediately after the establishment of the retirement system the actuary shall make such investigation of the mortality, service and compensation experience of the members of the system as he shall recommend and the Board of Control shall authorize, and, on the basis of such investigation, he shall recommend for adoption by the Board of Control such tables and such rates as are required in subsection (o) of this section. The Board of Control shall adopt tables and certify rates and, as soon as practicable thereafter, the actuary shall make a valuation based on such tables and rates of the assets and liabilities of the funds created by this article.

"(o) In 1948, and at least once in each five-year period thereafter, the actuary shall make an actuarial investigation into mortality, service, and compensation experience of the members and beneficiaries of the retirement system and shall make a valuation of the assets and liabilities of the funds of the system and, taking into account the results of such investigation and valuation, the Board of Control shall adopt for the retirement system such mortality, service, and other tables as shall be deemed necessary and certify the rates of contribution payable by the state under the provisions of this article.

"(p) On the basis of such tables as the Board of Control shall adopt, the actuary shall make an annual valuation of the assets and liabilities of the funds of the system created by this article."

Section 2. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

Retirement

Employees' Retirement System

Code Amended