Benefit increases for retirees and beneficiaries are limited and only payable when separately authorized and funded.
(a) Commencing in the fiscal year beginning October 1, 2026, no benefit increase provided to retirees and beneficiaries under the Employees’ Retirement System, except for retirees and beneficiaries whose employers participate pursuant to Sections 36-27-6, 36-27-7, and 36-27-7.1, shall be paid unless the increase is granted by a separate legislative act conforming to the requirements of this section. The separate legislative act shall set the amount of the increase and the class of eligible retirees and beneficiaries. Any other benefit increases may be granted by an additional separate legislative act. The Employees’ Retirement System shall pay the benefit increase to the eligible retirees and beneficiaries, except those whose employer participates in the Employees’ Retirement System pursuant to Sections 36-27-6, 36-27-7, and 36-27-7.1, only if the annual cost of the increase as estimated by the actuary of the system is included and appropriated in the State General Fund appropriation act for that fiscal year by a separate employer rate. Participating employers, except those whose employer participates in the Employees’ Retirement System pursuant to Sections 36-27-6, 36-27-7, and 36-27-7.1, shall pay the separate employer rate to pay the benefit increase included in the State General Fund appropriation act in the same manner and from the same source of funds as salaries of active members are paid. In any fiscal year in which the required separate employer rate is not identified and appropriated in the appropriation act, eligible retirees and beneficiaries shall not receive, and the Employees’ Retirement System shall not be required to pay, the increase in that fiscal year. The benefit increase may be resumed in any subsequent fiscal year if included in that year’s appropriation act. (b) The Legislature finds and declares that any benefit increase provided for the retirees and beneficiaries of the Employees’ Retirement System pursuant to this section shall not increase the unfunded liability of those retirement systems due to the annual authorization and full annual funding required by this section. (c) Any accounting standards that may imply otherwise and that do not recognize the clear language of this section, declaring that no future liability shall be attributed to the Retirement Systems of Alabama pursuant to this section, shall be disregarded and any audits conducted of the finances of the Retirement Systems of Alabama shall clearly note that those accounting standards do not apply to a benefit increase granted under this section. (d) This section is not applicable to and shall not affect any previous cost-of-living increase or one-time bonus provided to retirees under acts previously passed by the Legislature. (e) Commencing on November 4, 2026, only one retiree and beneficiary increase may be granted per legislative quadrennium pursuant to this section.