Important Changes Affecting Retirement
September 10th, 2012 - Filed under: News
UA’s Department of Human Resources encourages all faculty and staff to familiarize themselves with some recent legislation. Several bills were passed during the 2012 Alabama Regular Legislative session that will impact the Teachers’ Retirement System (TRS) and current and future University employees.
Following is a summary of the bills:
- HB255 (Act 2012-302) – allows retirement contributions on overtime pay or other additional compensation with a cap of 120 percent of base pay for all members of the TRS. What does this mean? Simply stated, if an individual has a base salary of $35,000, the TRS contributions will no longer be required once the employee makes $42,000 ($35,000 x 120 percent).
- SB213 (Act 2012-412) – requires teachers and state employees convicted of a felony offense related to their public position to forfeit their right to lifetime retirement benefits. However, the employee would receive a refund of his or her retirement contributions. This legislation is not retroactive and does not affect any member that has already been found guilty of an offense.
- SB388 (Act 2012-377) – creates a Tier 2 Defined Benefit plan for workers hired after Jan. 1, 2013 and have never contributed to the TRS retirement plan. New state employees and teachers will pay lower contribution rates, but will not be able to draw a retirement benefit until they reach age 62. State Police, law enforcement, firefighters and correctional officers will be able to draw a benefit at age 56.
During the 2011 Regular Session, the Alabama Legislature enacted Act 2011-676 resulting in increased employee contributions to the TRS plan. As a reminder, the mandated 0.25 percent increase in employee contributions to the TRS plan begins Oct. 1.
News & Media
- UA News
- Research Magazine
- Video Newsroom
- UA in the News
- UA Student News
- UA Events Calendar
- Experts Directory