The Retirement Systems of Alabama released a statement earlier this week regarding the implementation of the Local Government Fairness Act, which is officially known as Act 2019-132.

As a result of numerous phone calls we have received and widespread misconceptions about the requirements necessary to comply with the provisions of Act 2019-132, our ARSEA/APEAL staff met with RSA officials to address these issues.

Perhaps the most common misconception is that it will be mandatory to increase the existing Tier I employees’ contribution in order to provide the Tier I benefit to Tier II employees. Make no mistake, TIER I EMPLOYEE CONTRIBUTIONS MAY REMAIN UNCHANGED AT 5% AND 6%.

Our legislative staff was involved in every step of the measure, and we can tell you with certainty that we would NEVER accept a mandatory requirement.

After meeting with RSA, we ask you to take the following into consideration:

  • Local employers have until May 8, 2021 to come under the provisions of Act 2019-132. Knowing the amount of work involved in calculating the estimated costs for the almost 900 participating local governments, the EARLIEST implementation date is projected to be FY2020.
  • Employees’ benefits will NOT be penalized by having to wait until the projected implementation date of October, 2020. Benefit adjustments will be retroactive.
  • RSA staff is working now to develop the specific information that must be submitted by local governments wishing to opt into Act 2019-132. The suggested template will be considered by the ERS Board at their next meeting scheduled for September 17, 2019.
  • As required by the law, the RSA staff is also creating the detailed guidelines for denying an entity seeking to come under Act 2019-132, and these rules will also be considered by the ERS board at their next meeting.

We hope this information resolves any misunderstandings regarding Act 2019-132.

This is one example of how ARSEA/APEAL works for our members’ interests when issues, controversies, and questions arise. If you are not currently a member of ARSEA/APEAL, we encourage you to join our association immediately so you, too, will be privy to future important updates as the transition to once again offering Tier 1 benefits becomes a reality.

For membership information or questions regarding 2019-132, contact Evans Brown at 800-844-7732.

 

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