SB236 By Senator Smitherman RFD Finance and Taxation Education Rd 1 16-FEB-16

SYNOPSIS: This bill would provide for a supplemental two percent cost-of-living increase for retirees under the Teachers' Retirement System beginning October 1, 2016.

A BILL TO BE ENTITLED AN ACT

Relating to public education retirees; to provide for a two percent cost-of-living adjustment for retirees of the Teachers' Retirement System beginning October 1, 2016.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. (a) Commencing October 1, 2016, there is provided an increase in benefits to each person currently receiving benefits whose effective date of retirement was prior to October 1, 2015, for purposes of receiving benefits, and to certain beneficiaries of deceased members and deceased retirees currently receiving survivor benefits, if the effective date of retirement or death for the deceased retiree or deceased member was prior to October 1, 2015, for purposes of receiving benefits from the Teachers' Retirement System, a cost-of-living adjustment of two percent of the current gross benefit.

(b) Any future survivor allowance shall be adjusted as provided in the member's original option selection for those eligible retirees who have selected a monthly survivor allowance payable to a designated beneficiary upon the death of the retiree or as otherwise provided by law in the case of a qualifying member who dies prior to the effective date of this act.

(c) Any person who receives benefits under the Medicaid program and whose eligibility for the benefits would be impaired by the cost-of-living increase provided by this act shall not be entitled to receive the increase. Any person who shall subsequently apply for benefits under the Medicaid program and who would have his or her eligibility to receive benefits impaired by the cost-of-living increase provided by this act shall not be entitled to receive the increase after the date that the member files application for benefits under the Medicaid program.

(d) There is hereby appropriated from the Education Trust Fund the sum of $20,000,000 for the fiscal year beginning October 1, 2016 to assist in offsetting the cost of the cost-of-living adjustment herein. The appropriation is to be allocated as determined by the Director of Finance and distributed to all state agencies and institutions within the Teachers' Retirement System to pay part of the additional cost of retirement due to retiree cost-of-living increase. Upon certification by the Director of Finance, the State Comptroller shall issue payments to said entities and universities.

(e) For the fiscal year beginning October 1, 2017 and thereafter, the Board of Control of the Teachers' Retirement System shall determine annually the amount required to pay the cost of the increased allowance provided under this act and shall notify the chief financial officer of each employer of the per centum rates of earnable compensation of the members required to be paid to the retirement system. Each employer of members of the Teachers' Retirement System shall pay on account of the increases provided in this act in the same manner and from the same sources of funds as provided in Section 16-25-21, Code of Alabama 1975, it being the intent of the Legislature that the cost of providing the increase in this act shall be distributed from all funds in proportion to the salaries paid therefrom for active members.

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

Teachers' Retirement System

Retirement

Cost-of-Living Raise

Teachers