AlabamaAlabama retirement members may buy credit for federal work
Starting October 1, 2026, eligible Alabama retirement system members may buy up to four years of credit for qualifying federal work before they retire.
What it does
Eligible Alabama teachers’ and public employees’ retirement system members may buy up to four years of credit for nonmilitary federal work. They must meet service and payment rules, and cannot claim credit for work that earns benefits from another publicly funded pension plan.
Argument forEligible members could add up to four years of federal work to their retirement record, which may increase their retirement allowance.
Argument againstThe full actuarial cost could make buying credit unaffordable for some members, and the public pension rule limits credit for work that earns benefits elsewhere.
More detail
The law allows eligible members to buy credit for certain federal work. Members of Alabama’s Teachers’ Retirement System or Employees’ Retirement System may buy credit for up to four years of nonmilitary work for the federal government. Members must have at least 10 years of contributing service in their system, excluding military service, and pay the full cost set by the system’s actuary before retiring. The federal retirement system must certify the service in writing. Members must buy at least one year at a time, unless less than one year of qualifying service remains. Members cannot receive credit for service that also earns them benefits from another retirement or pension plan funded wholly or partly with public money. This limit does not apply to Social Security. If the service does not qualify, the system must refund the member’s contribution. If the member’s contribution does not cover administrative costs, the system may deduct the additional amount from retirement payments in 12 equal installments, if its board and consulting actuary determine the contribution was insufficient. The law takes effect October 1, 2026. Members must pay before retiring.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Apr 16EnactedBecame Law
- Apr 7Third Reading in Second House
- Vote recorded Motion to Read a Third Time and Pass - Adopted Roll Call 1215. Result: pass.Lower
- Vote recorded Third Reading in Second House. Result: pass.Lower
- Apr 7Motion to Read a Third Time and Pass - Adopted Roll Call 1215Passed House
- Apr 7Ready to Enroll
- Apr 7EnrolledTo Governor
- Apr 7Delivered to GovernorMinor
- Apr 7Signature Requested
- Mar 19Read for the Second Time and placed on the Calendar (Ways and Means General Fund)Minor
- Mar 18Reported Out of Committee Second House
- Mar 10Third Reading in House of Origin
- Vote recorded Waggoner motion to Adopt - Adopted Roll Call 752. Result: pass.Upper
- Vote recorded Third Reading in House of Origin. Result: pass.Upper
- Vote recorded Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 753. Result: pass.Upper
- Mar 10Finance and Taxation Education 1st Substitute Offered (Finance and Taxation Education)Minor
- Mar 10Waggoner motion to Adopt - Adopted Roll Call 752Major
- Mar 10Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 753Passed Senate
- Mar 10Engrossed
- Mar 10Read for the first time and referred to the House Committee on Ways and Means General FundMinor
- Mar 10Pending Committee Action in Second House (Ways and Means General Fund)
- Mar 5Read for the Second Time and placed on the Calendar (Finance and Taxation Education)Minor
- Mar 4Finance and Taxation Education 1st Substitute (Finance and Taxation Education)
- Mar 4Reported Out of Committee House of Origin
- Feb 10Read for the first time and referred to the Senate Committee on Finance and Taxation EducationMinor
- Feb 10Pending Committee Action in House of Origin (Finance and Taxation Education)Introduced