FISCAL NOTE

Senate Bill 172 as introduced provides a one-time lump-sum payment of: (1) $3 per month for each year of service to retirees of the Teachers’ Retirement System (TRS) whose effective date of retirement is prior to April 30, 2021; and (2) $300 to their beneficiaries. The lump sum bonus payment will be provided for fiscal year 2022 only and will be paid in December 2021 from the Education Trust Fund. According to the actuary for the Retirement Systems of Alabama, the bonus will cost an estimated $84.0 million. In addition, the bonus provided by this bill would increase the employer contribution rate by 1.15% for fiscal year 2023 if funds are not appropriated in the FY 2022 Education Trust Fund Budget.

As substituted and reported by the Committee on Finance and Taxation Education, provides a one-time lump-sum payment of: (1) $2 per month for each year of service or $300, whichever is greater, to TRS retirees whose effective date of retirement is prior to December 1, 2021; and (2) $300 to their beneficiaries. In addition, the bonus provided by the bill will be paid by increasing the employer contribution rate which, according to the actuary for the Retirement Systems of Alabama, will cost an estimated $56 million and increase the employer contribution rate by 0.77% for fiscal year 2023.