Act 2019-132 Election to Provide Tier I Benefits to Tier II Plan Members

Act 2019-132 allows local employers that participate in the Employees’ Retirement System (ERS) to provide Tier I retirement benefits to their Tier II members. Those Tier II members will pay member contribution rates of 7.5% for regular employees and 8.5% for firefighters and law enforcement officers. The local employers will pay an increased employer contribution rate, as calculated by RSA’s actuaries. Actuarial estimates of the increased employer cost for electing to provide Tier I benefits to Tier II members have been posted in the Employer Self-Service (ESS) portal.

Local employers may elect to provide Tier I benefits to their Tier II employees by adopting a resolution and submitting such resolution to the ERS. Under the Act, local employers have until May 8, 2021, to do so. 

The Act also requires that local employers that have not raised the Tier I member contribution rates from 5% to 7.5% for regular employees and from 6% to 8.5% for firefighters and law enforcement officers as provided in Act 2011-676 must submit a plan to the ERS for raising those rates before they will be allowed to make an election to provide Tier I benefits to Tier II members. 

To make an election, submit your resolution and plan (if you have not increased rates under Act 2011-676) to the attention of the Employees’ Retirement System, 201 S. Union St., Montgomery, AL 36104. If approved, elections will become effective October 1, 2020.

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