HB356 Summary

• Creates "Option 5" allowing certain retirees of the Teachers' Retirement System and Employees' Retirement System to elect a lump-sum cash payment equal to up to 50 percent of their retirement allowance, with the remaining amount paid as a reduced ongoing pension.

• Requires the Director of Finance to certify annually whether available funds and economic conditions support the lump-sum option, with a 12-month suspension period if conditions are unsatisfactory.

• Establishes the Alabama Pension Authority as a public corporation authorized to issue bonds to finance lump-sum retirement payments, with bonds repaid from "lump-sum option contribution" amounts deducted from employer contributions.

• Provides that retirees who elect the lump-sum option cannot purchase prior service credit for which the lump-sum was distributed, but may purchase service credit for new retirement benefits earned after distribution.

• Makes the lump-sum option available to members with retirement dates on or after October 1, 2017, and requires the Retirement Systems to provide financial counseling to members electing this option.