AL SB338

Establishes a "pay as you go" funding procedure for future pension benefit increases to retirees under the Employees' Retirement System and Teachers' Retirement System of Alabama, effective the first fiscal year after passage.

Requires the actual annual cost of any benefit increase to be estimated by the system actuary and included in the State General Fund Budget Act or Education Trust Fund Budget Act before the increase can be paid to retirees.

Benefits will not be paid in any fiscal year unless the required funding amount is identified and appropriated in that year's budget acts; increases can be resumed in subsequent years if funding is later included.

Requires entities whose appropriations are not included in budget acts to transfer the required employer rate contribution to the retirement systems in the same month the increase is to be paid, using separate employer rates for benefit increases.

Does not affect or apply to any previously authorized cost-of-living increases or one-time bonuses provided to retirees under prior legislative acts.