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Governor Bentley Praises Pension Reform Approval

 From the Office of Governor Robert Bentley

MONTGOMERY – Governor Robert Bentley on Tuesday praised legislative approval of pension reform measures that will ensure the viability of the state’s retirement system while also saving taxpayers more than five billion dollars over 30 years.

Senate Bill 388 was approved by the House of Representatives Tuesday afternoon.  The bill received Senate approval in April.  The legislation will now go to the Governor’s desk.  Governor Bentley is planning to sign the pension reform measures.

“The measures we have outlined will protect the retirements of hard-working Alabamians while ensuring a strong retirement system for future employees,” Governor Bentley said.  “The changes will only affect new hires who begin their employment next year or later.  The changes are fair, they uphold our commitments to current employees, and they provide a solid retirement for future employees as well.”

Governor Bentley joined with legislative leadership and Retirement Systems of Alabama Chief Executive Officer Dr. David Bronner in March to outline revisions.

Changes include:

  • A minimum retirement age of 62 for most state employees.
  • Currently, anyone may retire once vested (10 years of service) at age 60 or with 25 years of service at any age.  The reform proposals set a minimum retirement age of 62.
  • Law Enforcement – Minimum retirement age of 56.
  • Adjust pension payments from an average of the highest-paid 3 years out of the last 10 years of service to an average of the highest 5 years.
  • In exchange for the restructuring of benefits, new hires would see their employee contribution rates changed from 7.5% to 6.0% (7.0% for law enforcement, firefighters, and corrections employees).  This measure will increase employees’ take-home pay.
  • Total estimated savings over 30 years: $5.03 Billion
  • Average annual savings over 30 years: $162 Million

The changes will bring the state’s retirement system more in line with the private sector.  Many other states across the country have adopted similar measures.

Senator Arthur Orr served as the Senate sponsor of the legislation.  Representatives Mac McCutcheon and Jamie Ison are House sponsors of the legislation.

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“I want to thank everyone who worked with us to put together a comprehensive set of fair reforms,” Governor Bentley said.  “The economic realities of recent years made it clear that we need to take steps now to ensure that retirement benefits will be there for people who will be depending on them in the future.  These reforms allow us to accomplish that goal in a fiscally responsible manner.”


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Robert Bentley is the former governor of the state of Alabama.