Section 36-27-16 Retirement, etc., of employees; retirement allowances.
Section 36-27-16
Retirement, etc., of employees; retirement allowances.
(a)(1) RETIREMENT, ETC., OF EMPLOYEES GENERALLY; ELIGIBILITY FOR SERVICE RETIREMENT BENEFITS.
a. Any member who withdraws from service upon or after attainment of age 60 may retire upon written application to the Board of Control setting forth at what time, not less than 30 days nor more than 90 days subsequent to the execution and filing thereof, he desires to be retired; provided, that any such member who became a member on or after October 1, 1963, shall have completed 10 or more years of creditable service; provided further, that a member employed as a state policeman shall be eligible to file application of service retirement upon attaining age 52.
b. Any member who has attained age 60, or age 52 in the case of a state policeman, and has previously withdrawn from service may retire upon written application to the Board of Control setting forth at what time, not less than 30 days nor more than 90 days subsequent to the execution and filing thereof, he desires to be retired; provided, said member shall have at the time of his withdrawal from service completed the age and service requirements established by the Board of Control for eligibility for deferred benefits; provided, that such minimum number of years of creditable service shall not be less than 10 years nor more than 25 years.
c. In addition to any law or part of law relating to service retirement under the Employees' Retirement System of Alabama, any member of the Employees' Retirement System who withdraws from service after completion of not less than 25 years of creditable service may retire without a reduction in retirement allowance upon written application to the Board of Control of the Employees' Retirement System setting forth the first day of which month, not less than 30 days or more than 90 days subsequent to the execution and filing thereof, he desires to be retired, provided that no person whose employer participates in the Employees' Retirement System under Section 36-27-6 shall be entitled to the benefits provided in this paragraph unless such employer elects to come under the provisions of said paragraph. Any employer making such election must bear the cost of such benefit.
(2) AMOUNT OF SERVICE RETIREMENT ALLOWANCE.
a. Upon retirement from service a member shall receive a service retirement allowance which shall consist of:
1. An annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his retirement; except, that in the case of a state policeman who has completed 20 years of creditable service as a state policeman who retires after age 56 but prior to age 60, the annuity shall be equal to the annuity that would have been payable upon service retirement at age 60 had the member continued in service to said age 60 without change in compensation;
2. A pension which shall be equal to the annuity allowance at age of retirement, but not to exceed an annuity allowable at age 65, computed on the basis of contributions made prior to attainment of age 65; except, that in the case of a state policeman who has completed 20 years of creditable service as a state policeman who retires after age 56 but prior to age 60, the pension shall be equal to the annuity that he would have received had he contributed to age 60 without change in compensation; and
3. An additional pension, if he has a prior service certificate in full force and effect, which shall be equal to the annuity which would have been provided at the age of retirement, but which shall not exceed an annuity allowable at age 65 by twice the contributions which he would have made during the period of prior service with which he is credited had the system been in operation and had he contributed thereunder; except, that in case of a state policeman who has completed 20 years of creditable service as a state policeman who retired after age 56 but prior to age 60, an additional pension, if he has a prior service certificate in full force and effect, which shall be equal to the annuity which would have been provided at age 60, but which shall not exceed an annuity allowable at age 60 by twice the contributions which he would have made during the period of prior service with which he is credited had the system been in operation and had he contributed thereunder.
b. Notwithstanding the provisions of subparagraphs 1, 2, and 3 of paragraph a of this subdivision, a state policeman who has completed 20 years of service as a state policeman who retires after age 52 but prior to age 56 shall receive:
1. An annuity which shall be equal to the annuity that would have been payable had the member continued in service for four years without change in compensation;
2. A pension which shall be equal to the annuity that he would have received had he contributed for four years without change in compensation; and
3. An additional pension, if he has a prior service certificate in full force and effect, which shall be equal to the annuity which would have been provided at the age of retirement, but which shall not exceed an annuity allowable at the age of retirement plus four years by twice the contributions which he would have made during the period of prior service with which he is credited had the system been in operation and had he contributed thereunder. In lieu of a determination of the actual compensation of a member that was received during such prior service, the Board of Control may use for the purpose of this article the compensation rate which, if it had progressed with the rates of salary increase shown in the tables as prescribed in subsection (n) of Section 36-27-23, would have resulted in the same average salary of the member for the five years immediately preceding the date of establishment as the records show the member actually received.
c. The annual service retirement pension payable to a member not employed as a state policeman retiring on or after October 1, 1975, shall not be less than an amount which, when added to his annuity, is equal to the greater of the following two amounts:
1. Two and one-eightieth percent of the member's average final compensation multiplied by the number of years of his creditable service; or
2. If he became a member before October 1, 1965, $72.00 multiplied by the number of years of his creditable service not in excess of 25 years.
d. The annual service retirement pension payable to a member employed as a state policeman retiring on or after October 1, 1975, shall not be less than an amount which, when added to his annuity is equal to the greater of the following two amounts:
1. Two and seven-eighths percent of the member's average final compensation multiplied by the number of years of his creditable service. Creditable service for any state policeman under the age of 56 years who has completed 20 years of creditable service as a state policeman shall include a bonus equal to four additional years. Creditable service for a state policeman 56 years or older shall include a bonus equal to the years or portion thereof remaining until the member reaches age 60; or
2. If he became a member before October 1, 1965, $86.40 multiplied by the number of years of his creditable service not in excess of 25 years; provided, however, that if such member has completed 20 years of creditable service as a state policeman and has not attained age 60 at the time of retirement, said pension shall be determined as provided in this subparagraph on the basis of the number of years of creditable service which he would have had if he had remained in service for four years, except that, in the case of those state policemen retiring at age 56 or after, the number of years in determining said pension shall not exceed the number of years of creditable service which he would have had if he had remained in service to age 60.
e. Anything in this article to the contrary notwithstanding, in the application of the foregoing provisions of this subdivision to a member whose creditable service includes a period of service as a state policeman and a period of service in another employment classification, the benefit rates applicable to a member employed as a state policeman shall apply to all creditable service as a state policeman, and the benefit rates applicable to a member not employed as a state policeman shall apply to all creditable service, but in all other respects the pension under this subdivision shall be determined on the basis of the member's employment classification at the time of his withdrawal from service.
f. The annual service retirement pension payable to any state employee who had attained age 60 on or before October 1, 1945, who declined membership in the Employees' Retirement System of Alabama in the manner prescribed in Section 36-27-4 and who retires as a state employee after completing a minimum of 15 years' service shall be $72.00 multiplied by the number of years of his service not in excess of 25 years.
(b)(1) RETIREMENT OF DISABLED EMPLOYEES; ELIGIBILITY FOR DISABILITY RETIREMENT BENEFITS.
a. Upon application of a member in service or of his employer, any member who has had 10 or more years of creditable service who becomes disabled may be retired on a disability retirement allowance by the Board of Control not less than 30 nor more than 90 days next following the date of filing of such application; provided, that the medical board, after a medical examination of such member, shall certify that such member is mentally or physically incapacitated for the further performance of duty, that such incapacity is likely to be permanent and that such member should be retired.
b. Without regard to the number of years of creditable service, a member employed as a state policeman, a municipal police officer or a deputy sheriff, or a member employed as a state, municipal or county firefighter who is not covered through his current employer under the United States Social Security Act, who as a result of his employment, in the line of duty and not as a result of his own misconduct, shall become permanently and totally disabled to the extent that he cannot perform his duties or duties of a less strenuous nature, as an employee of the State of Alabama or as an employee of an employer participating under the provisions of Section 36-27-6, shall be retired on a disability retirement allowance, not less than 30 nor more than 90 days next following the date of filing of such application, provided that the medical board, after a medical examination of such member shall certify that such member is mentally or physically incapacitated for the further performance of duty, that such incapacity is likely to be permanent, and that such member should be retired.
(2) AMOUNT OF DISABILITY RETIREMENT ALLOWANCE.
a. Upon retirement for disability a member shall receive a service retirement allowance if he has attained age 60, or if any law or part of any law pertaining to retirement under the Employees' Retirement System of Alabama provides for service retirement after the completion of 25 years of creditable service without a reduction in the retirement allowance and the member has completed 25 years of creditable service, or, in the case of a state policeman, if he has attained age 52; otherwise, he shall receive a disability retirement allowance which shall consist of:
1. An annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his retirement;
2. A pension which shall be equal to the pension that would have been payable under subparagraphs 2 and 3 of paragraph a of subdivision (2) of subsection (a) of this section upon service retirement at age 65 had the member continued in service to said age without change in compensation.
b. The annual disability retirement pension payable to a member not employed as a state policeman retiring on or after October 1, 1975, shall not be less than an amount which when added to his annuity is equal to the greatest of the following two amounts:
1. Two and one-eightieth percent of the member's average final compensation multiplied by the number of years of creditable service.
2. If he became a member before October 1, 1965, $54.00 multiplied by the number of years of his creditable service not in excess of 25 years.
c. The annual disability retirement pension payable to a member employed as a state policeman retiring on or after October 1, 1975, shall not be less than an amount which when added to his annuity is equal to the greater of the following two amounts:
1. Two and seven-eighths percent of the member's average final compensation multiplied by the number of years of his creditable service. Creditable service for any state policeman under the age of 56 years who has completed 20 years of creditable service as a state policeman shall include a bonus equal to four additional years. Creditable service for a state policeman 56 years or older shall include a bonus equal to the years or portion thereof remaining until the member reaches age 60; or
2. If he became a member before October 1, 1965, $64.80 multiplied by the number of years of his creditable service not in excess of 25 years.
d. Anything in this chapter to the contrary notwithstanding in the application of the provisions of this subdivision to a member whose creditable service includes a period of service as a state policeman and a period of service in another employment classification the benefit rates applicable to a member employed as a state policeman shall apply to all creditable service as a state policeman, and the benefit rates applicable to a member not employed as a state policeman shall apply to all other creditable service, but in all other respects the pension under this subdivision shall be determined on the basis of the member's employment classification at the time of his withdrawal from service.
(3) REEXAMINATION OF BENEFICIARIES RETIRED ON ACCOUNT OF DISABILITY. Once each year during the first five years following the retirement of a member on a disability retirement allowance and once every three-year period thereafter, the Board of Control may, and upon his application shall, require any disability beneficiary who has not yet attained age 60 to undergo a medical examination, such examination to be made at the place of residence of such beneficiary or other place mutually agreed upon by a physician or physicians of or designated by the medical board. Should any disability beneficiary who has not yet attained age 60 refuse to submit to such medical examination, his allowance may be discontinued until his withdrawal of such refusal, and, should his refusal continue for one year, all his rights in and to his pension may be revoked by the Board of Control; provided, that these requirements relative to the medical examination shall not apply in the case of a state policeman retired for disability and who has attained age 52. Should the medical board report and certify to the Board of Control that a disability beneficiary is engaged in or is able to engage in a gainful occupation paying more than the difference between his retirement allowance and his average final compensation and should the Board of Control concur in such report, then the amount of his pension shall be reduced to an amount which, together with his annuity and the amount earnable by him shall equal the amount of his average final compensation. Should his earning capacity be later changed, the amount of his pension may be further modified; provided, that the new pension shall not exceed the amount of the pension originally granted nor an amount which, when added to the amount earnable by the beneficiary, together with this annuity exceeds the amount of his average final compensation.
(c) Disposition of contributions and allowances upon death, etc., of member.
(1) Should a member cease to be an employee except by death or by retirement under the provisions of this article, the contributions standing to the credit of his individual account in the Annuity Savings Fund shall be paid to him upon demand and, in addition to such payment, there shall be paid five-tenths of the interest accumulations standing to the credit of his individual account if he shall have not less than three but less than 16 years of membership service, six-tenths of such interest accumulations if he shall have not less than 16 but less than 21 years of membership service, seven-tenths of such interest accumulations if he shall have not less than 21 but less than 26 years of membership service and eight-tenths of such interest accumulations if he shall have not less than 26 years of membership service.
(2) In case of the death of a member eligible for service retirement pursuant to subsection (a) of this section, an allowance shall be paid to the surviving spouse, or to such other person who the member shall have designated, in an amount that would have been payable if the member had retired immediately prior to his death and had elected Option 3, as set forth in subsection (d) of this section or, alternatively, if the surviving spouse or other designee desires, he may choose to receive, in lieu of the allowance provided under Option 3, the accumulated contributions of the member plus an amount equal to the accumulated contributions of the member not to exceed $5,000.00 or the accumulated contributions of the member plus the benefit provided by Section 36-27B-3 if a benefit is payable under such section;
(3) In case of the death of a member not eligible for service retirement, after completion of 25 years of creditable service, an allowance shall be paid to the surviving spouse, or to such other person who the member shall have designated, in an amount that would have been payable if the member had retired for disability immediately prior to his death and had elected Option 3 as set forth in subsection (d) of this section or, alternatively, if the surviving spouse or other designee desires, he may choose to receive, in lieu of the allowance provided under Option 3, the accumulated contributions of the member plus an amount equal to the accumulated contributions of the member not to exceed $5,000.00 or the accumulated contributions of the member plus the benefit provided by Section 36-27B-3 if a benefit is payable under such section;
(4) Upon the death of a member on account of whom no survivor allowance is payable under subdivisions (2) or (3) of this subsection, the accumulated contributions of the member plus an amount equal to the accumulated contributions not to exceed $5,000 or the accumulated contributions of the member plus the benefit provided by Section 36-27B-3 if a benefit is payable under such section shall be paid to his estate or to such person as he shall have nominated by written designation duly executed and filed with the Board of Control.
(d) Optional allowances. With the provision that the election of an option shall be effective on the effective date of retirement, any member may elect prior to retirement to receive, in lieu of his retirement allowance payable throughout life, the actuarial equivalent, at that time, of his retirement allowance in a reduced retirement allowance payable throughout life with the provisions that:
(1) OPTION 1. If he dies before he has received in annuity payments the present value of his annuity as it was at the time of his retirement, the balance shall be paid to his legal representatives or to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Control;
(2) OPTION 2. Upon his death, his reduced retirement allowance shall be continued throughout the life of and paid to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Control at the time of his retirement;
(3) OPTION 3. Upon his death, one half of his reduced allowance shall be continued throughout the life of and paid to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Control at the time of his retirement; or
(4) OPTION 4. Some other benefit or benefits shall be paid either to the member or to such person or persons as he shall nominate; provided, that such other benefits, together with the reduced retirement allowance, shall be certified by the actuary to be of equivalent actuarial value to his retirement allowance and shall be approved by the Board of Control.
(e) Effect of return to active service. Should any beneficiary be restored to active service, his retirement allowance shall be suspended until he again withdraws from service and he shall not again become a member of the retirement system nor shall he make contributions; except, that should such beneficiary who has been restored to active service continue in service for a period of two or more years from the date of his reentry into active service, he may request the Board of Control to allow him to again become a member of the retirement system. The Board of Control may grant the request for restoration to membership; provided, that such beneficiary whose retirement allowance has been suspended shall repay to the system all moneys received by him as benefits during any periods subsequent to the date of his reentry into active service and shall make a contribution equal to the amount he would have contributed had he been a member during the period of his restoration to active service on a suspended on allowance basis together with the interest which would have been credited to the contributions on account of such period of restoration up to the date such contribution is made.
(f)(1) REDETERMINATION, ETC., OF CERTAIN ALLOWANCES. All retirement allowance payments due on or after October 1, 1975, to members who retired prior to said date shall be redetermined as if the provisions of this section in effect on October 1, 1975, were in effect at the time the member retired. Anything in this article to the contrary notwithstanding, the annual retirement allowance of any member not employed as a state policeman who retired on or before January 1, 1956, shall not be less than $79.20 multiplied by the number of years of his creditable service not in excess of 30 years in the case of service retirement of $59.40 multiplied by the number of years of his creditable service not in excess of 30 years in the case of disability retirement. Any increase provided in the retirement allowance payment under this subdivision for a member who retired under the provisions of any optional benefit elected pursuant to subsection (d) of this section shall accrue only to the retired member, and no person designated to receive any payments after the death of a retired member under the provisions of any such optional benefit shall receive any increase in such payments under this subdivision. Notwithstanding, any member who retired prior to October 1, 1975, and who chose either Option 2 or Option 3 may elect to receive a reduced allowance and to stipulate that the actuarial equivalent of the increase in his retirement allowance, which became effective on said date, be ascribed to his designated beneficiary; provided, that such member shall clearly express this intention by filing a written application to said effect with the Secretary-Treasurer of the Employees' Retirement System of Alabama prior to October 1, 1976.
(2) Any person who, prior to October 1, 1963, was in receipt of a benefit pursuant to Act No. 376, approved November 6, 1959, but was not a member of the system at the time of retirement shall not be entitled to receive an annual retirement allowance from the system, effective October 1, 1971, as follows:
a. If such person was retired on or before January 1, 1956, an amount equal to $79.20 multiplied by the number of years of his creditable service not in excess of 30 years.
b. If such person was retired after January 1, 1956, an amount equal to $72.00 multiplied by the number of years of his creditable service not in excess of 25 years.
(3) Prior to October 31, 1975, any beneficiary may elect to leave on deposit with the system all or a specified part of any increase in his monthly retirement allowance payments arising in accordance with subdivisions (1) or (2) of this subsection over the monthly allowance which he was receiving prior to October 1, 1975. The portion of each monthly payment left in the system in accordance with such election shall be credited, together with regular interest thereon, to the individual account of such beneficiary. Upon the death of such beneficiary the total amount standing to his credit, including regular interest to the date of death, shall be paid in a lump sum to his legal representatives or to such person as he shall have nominated by written designation duly acknowledged and filed with the Board of Control.
(g) Notwithstanding any other provisions of this section to the contrary, when a designated beneficiary for a member predeceases the member who is receiving a monthly benefit allowance provided under Option 2, 3, or 4, the member may designate a replacement beneficiary for the deceased beneficiary to become effective two years after the date of designation of the replacement beneficiary and an actuarial adjustment in the monthly benefit allowance of the member to cover any cost associated with designating a replacement beneficiary shall be reflected thereafter in the monthly benefit allowance received by the member, commencing with the first benefit allowance check received by the member following the date of designation of the replacement beneficiary.
(h) Notwithstanding any provision of this section to the contrary, if a retired member who is receiving a monthly benefit allowance provided under Option 2, 3, or 4 divorces his or her designated beneficiary, the member may designate a replacement beneficiary for the beneficiary to become effective two years after the date of designation of the replacement beneficiary and an actuarial adjustment in the monthly benefit allowance of the member to cover any cost associated with designating a replacement beneficiary shall be reflected thereafter in the monthly benefit allowance received by the member, commencing with the first benefit allowance check received by the member following the date of designation of the replacement beneficiary.
(Acts 1945, No. 515, p. 734, §5; Acts 1947, No. 606, p. 445, §4; Acts 1951, No. 407, p. 732, § 1; Acts 1953, No. 79, p. 106, §3; Acts 1953, No. 533, p. 740, § 1; Acts 1955, No. 478, p. 1085, §3; Acts 1957, No. 28, p. 59, §2; Acts 1959, 2nd Ex. Sess., No. 105, p. 323, § 1; Acts 1961, Ex. Sess., No. 212, p. 2203, § 1; Acts 1963, 1st Ex. Sess., No. 44, p. 144, §4; Acts 1965, No. 343, p. 468, §1; Acts 1966, Ex. Sess., No. 71, p. 93, § 1; Acts 1967, No. 290, p. 819, §1; Acts 1969, No. 173, p. 465, §2; Acts 1971, No. 1463, p. 2490, §2; Acts 1975, 3rd Ex. Sess., No. 135, p. 359, §2; Acts 1982, No. 82-617, p. 1160, §1; Acts 1983, 2nd Ex. Sess., No. 83-160, p. 329, §2; Acts 1987, No. 87-253, p. 352, §2; Acts 1988, No. 88-548, p. 849, §§2, 4; Acts 1989, No. 89-525, p. 1074, §1; Acts 1989, No. 89-640, p. 1252, §1; Acts 1990, No. 90-654, p. 1261, § 1; Acts 1995, No. 95-216, p. 353, §1; Act 98-385, p. 732, §9; Act 2000-454, p. 818, §1.)