SB290 By Senator Ward RFD Finance and Taxation General Fund Rd 1 10-MAR-20

SYNOPSIS: Under existing law, there is no provision for retirees and beneficiaries receiving monthly benefits from the Employees' Retirement System (ERS) to receive a funded one-time lump-sum bonus in addition to their retirement allowances.

This bill would provide a one-time lump-sum bonus to certain retirees and beneficiaries under the Employees' Retirement System.

A BILL TO BE ENTITLED AN ACT

To provide for a funded one-time lump-sum bonus in addition to the retirement benefits of certain retirees and beneficiaries of the Employees' Retirement System.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. (a) There is provided for fiscal year 2021-2022 a funded one-time lump-sum payment, hereinafter referred to as lump-sum bonus, to each person except those whose employer participated in the Employees' Retirement System pursuant to Sections 36-27-6, 36-27-7, and 36-27-7.1, Code of Alabama 1975, whose effective date of retirement for purposes of receiving benefits from the Employees' Retirement System is prior to October 1, 2020, and who is receiving or is entitled to receive a monthly allowance from the Employees' Retirement System on September 30, 2020.

(b) The bonus shall be comprised of the sum of all of the following three parts:

(1) Two hundred dollars ($200) for retirees whose annual retirement benefit is equal or less than twenty-two thousand dollars ($22,000), or one hundred dollars ($100) for retirees whose annual retirement benefit is more than twenty-two thousand dollars ($22,000).

(2) Two hundred dollars ($200) for retirees who retired prior to January 1, 2000, or one hundred dollars ($100) for retirees who retired on or after January 1, 2000.

(3) Two hundred dollars ($200) for retirees with 25 years or more of creditable service, or one hundred dollars ($100) for retirees with less than 25 years of creditable service.

(c) Beneficiaries of deceased members or deceased retirees, except where the deceased member or deceased retiree retired from an employer participating in the Employees' Retirement System pursuant to Sections 36-27-6, 36-27-7, or 36-27-7.1, Code of Alabama 1975, if the date of death for the deceased member, or the effective date of retirement for the deceased retiree for purposes of receiving benefits from the Employees' Retirement System was prior to October 1, 2020, and if the beneficiary is receiving or is entitled to receive a monthly allowance from the Employees' Retirement System on September 30, 2020, shall receive a lump-sum bonus of three hundred dollars ($300).

(d) For purposes of this act, service includes the service under Section 36-27-1 and Article 9, commencing with Section 36-27-170, Chapter 27, Title 36, Code of Alabama 1975, as well as state police bonus credit or hazardous duty (FLC bonus) credit.

Section 2. (a) Each person whose employer participated in the Employees' Retirement System pursuant to Sections 36-27-6, 36-27-7, or 36-27-7.1, Code of Alabama 1975, whose effective date of retirement for purposes of receiving benefits from the Employees' Retirement System is prior to October 1, 2020, and who is receiving or is entitled to receive a monthly allowance from the Employees' Retirement System on September 30, 2020, shall receive the lump-sum bonus specified in subsections (a) and (b) of Section 1, if the employer elects to come under this act by official resolution on or before September 1, 2020. Any employer making the election to come under this act shall bear the cost of the lump-sum bonus paid to its retirees pursuant to this section.

(b) If the employer elects to come under this act, beneficiaries of deceased members or deceased retirees retired from an employer participating in the Employees' Retirement System pursuant to Sections 36-27-6, 36-27-7, or 36-27-7.1, Code of Alabama 1975, if the date of death for the deceased member or the effective date of retirement for the deceased retiree for purposes of receiving benefits from the Employees' Retirement System was prior to October 1, 2020, and if the beneficiary is receiving or is eligible to receive a monthly allowance from the Employees' Retirement System on September 30, 2020, shall receive a lump-sum bonus of three hundred dollars ($300).

Section 3. (a) Any retired pensioner or annuitant who retired from a city, town, county, or public or quasi-public organization of the state before the city, town, county, or public or quasi-public organization of the state became a member of the Employees' Retirement System, and who is receiving or is entitled to receive a monthly allowance from the Employees' Retirement System on September 30, 2020, shall receive the lump-sum bonus stipulated in subsections (a) and (b) of Section 1, provided the employer elects to come under this act. Any employer making the election to come under this act shall bear the cost of the lump-sum bonus paid to its retirees pursuant to this section and provide the Employees' Retirement System with the number of years of creditable service earned by each of its eligible annuitants and pensioners.

(b) Beneficiaries of Employees' Retirement System pensioners or annuitants described in subsection (a) shall receive a lump-sum bonus of three hundred dollars ($300), provided the date of death for the deceased pensioner or annuitant or the effective date of retirement for the deceased pensioner or annuitant was prior to October 1, 2020, and the beneficiary is receiving or is entitled to receive a monthly allowance from the Employees' Retirement System on September 30, 2020, and the local unit elects to fund the lump-sum bonus of three hundred dollars ($300) and provides the Employees' Retirement System with the number of years of creditable service earned by each of its eligible annuitants and pensioners.

Section 4. Any pensioner or annuitant who retired from a city, town, county, or public or quasi-public organization of the state before the city, town, county, or public or quasi-public organization of the state became a member of the Employees' Retirement System and is receiving a monthly benefit on September 30, 2020, not administered by the Employees' Retirement System may receive the lump-sum bonus stipulated in subsection (a) and (b) of Section 1, provided the retired employee retired prior to October 1, 2020, and the employer decides to come under this act and fund the lump-sum bonus. The Employees' Retirement System shall not make payments to these pensioners or annuitants. The employer shall make payments to its pensioners and annuitants under this section.

Section 5. The Board of Control of the Employees' Retirement System shall make all reasonable efforts to notify any employer who participated in the Employees' Retirement System and has withdrawn from participation by the effective date of this act that the lump-sum bonus stipulated in Section 1 is available to their retirees and beneficiaries provided the employer elects the lump-sum bonus.

Section 6. Any person who received benefits under the Medicaid program and whose eligibility for Medicaid benefits would be impaired by the lump-sum bonus provided by this act shall not be entitled to receive the aforementioned increase. Any person who subsequently applies for benefits under the Medicaid program and that person's eligibility to receive benefits is impaired by the lump-sum bonus provided by this act shall not be entitled to receive the increase subsequent to the date that the member files application for benefits under the Medicaid program.

Section 7. The Board of Control of the Employees' Retirement System shall determine the amount required in order to pay the cost of the lump-sum bonus provided under this act and shall notify the chief fiscal officer of each employer of the increases in the employer rate required to be paid to the system. For the fiscal year beginning October 1, 2021, only, each employer shall pay the increase in the employer rate in the same manner and from the same source of funds as salaries of active members are paid.

Section 8. The lump-sum bonuses provided under this act shall be paid to all eligible recipients by the Employees' Retirement System in December 2020.

Section 9. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

Employees' Retirement System

Compensation

Retirement