A cost-of-living adjustment for certain retirees under the Employees’ Retirement System (ERS) has been approved by the House Ways and Means Geneal Fund Committee.
Rep. Randall Shedd, R-Fairview, sponsored Hb440 which would provide a 3% cost-of-living increase for state employees who retired before Oct. 1, 2023.
Local governments can opt-in to the cost-of-living adjustment, but the funding would come out of the local budget.
HB 440 is a companion bill to HB 201, sponsored by Rep. Steve Clouse, R-Ozark, which works to establish procedures for increasing state employee and teacher retirees’ benefits. The bill provides an employer contribution rate increase, estimated 1.05%, to the ERS, which will help fund the cost-of-living adjustment for retirees.
According to the bill’s fiscal note, HB 440 would increase benefit expenses by an estimated $17.1 million for the 2025 fiscal year. This amount is expected to decline by approximately 3.6% each subsequent year.
This decline is because of the adjournment is set only for people who retired before October, as said by Neah Scott, legislative counsel for RSA.
The bill moves to the Alabama House of Representatives for consideration. Now it needs three legislative days to pass; there are seven days left in the 2024 legislative session.