Alabama’s retired state employees are about to get hosed again.
Despite not receiving a cost-of-living adjustment to benefit payments in 20 years, the State Employees Insurance Board this week proposed increasing retirees’ insurance premiums by $20 per month.
“The Legislature last awarded a COLA benefit increase to state government retirees when President George W. Bush was in the White House and the iPhone did not yet exist,” Alabama Retired State Employees Association Executive Director Lindsey Ward said. “The facts are simple—state retirees cannot afford an insurance premium increase, and plenty of time remains for the SEIB to find another proposal or stopgap measure before January, so find another solution.”
The proposed premium increase comes amid steep increases in health care costs, driven in large part by policies implemented by the Trump administration at the federal level and Congress’ approval of the One Big Beautiful spending bill. Additionally, state tax revenues flowing into the General Fund budget are declining rapidly in the current economy.
Still, as Ward noted, there was no need to shift the burden to retirees. The SEIB has the authority to withdraw up to 10 percent, or about $34 million, from reserve funds but instead chose to withdraw only 5 percent.
The proposed increase on retirees would generate only about $12 million. That amount could be covered if the SEIB withdrew the full 10 percent, eliminating the need for a premium increase.
“All we are demanding is fairness and simple common sense, and this premium increase fails to meet either of those criteria,” Ward said. “Someone at SEIB needs to fire up their calculator, go back to the drawing board, and come up with a plan that doesn’t penalize the elderly for simply being elderly.”
While retirees have received no COLA increases from the Legislature in 20 years, state workers have received nine. The same state lawmakers who have declined to find money for retiree COLAs for two decades have received 17 pay raises during that span, including a 61 percent increase in 2007, a 10 percent increase in 2024 and a 4 percent increase in 2025. They are now the highest-paid part-time legislators in the country. Their pay increased from $30,710 in 2006 to a projected $64,000-plus in 2026.
The average state retiree receives between $18,000 and $22,000 per year, and that amount has remained essentially unchanged since 2006.
