HB533 Summary - Montgomery Employees' Retirement System

• Combines and amends Act 2009-473 to restructure the Employees' Retirement System of the City of Montgomery effective October 1, 2013.

• Implements a new Group I Cash Balance Plan for new members and existing members who elect it, replacing traditional defined benefit formulas with hypothetical accounts receiving annual pay credits (11-15% of compensation) and interest credits.

• Changes retirement ages and service requirements: Group II Age 62 Plan members now need 25 years of service or age 55 (with minimum 10 years); Group I Cash Balance Plan members need 25 years or age 62.

• Adjusts employee contribution rates: maintains 6% for most groups while increasing Group II Age 62 Plan to 7%; allows mayor to increase contributions up to 8% annually with board approval.

• Establishes minimum qualification standards for independent auditors (certified public accountants with defined benefit plan expertise) and clarifies board authority to hire outside legal advisors; eliminates disability retirement or increases creditable service requirements with mayor approval.