HB704 Summary

• Amends Act 99-568 to modify the retirement system for Tuscaloosa police officers and firefighters by adjusting member and city contribution rates and deferred retirement option plan (DROP) provisions.

• Changes member contribution rates from 7% to 11.25% of salary and city contribution rates from 13% to 13.25% of salary, with the city assuming "picked up" contributions that do not reduce member salaries or pension calculations.

• Modifies the Deferred Retirement Option Plan (DROP) to reduce the interest rate credited to DROP accounts from one-half to one-third of the actuarial assumption for investment return, not to exceed 4% annually.

• Clarifies that members who forfeit benefits upon termination before retirement eligibility receive their contributions less one-half of sick benefits paid, and establishes procedures for refunding contributions to beneficiaries of deceased members without surviving spouses or children.

• Becomes effective on the first day of the third month following passage and approval by the Governor.