Big changes to Alabama's public employee retirement system are a virtual done deal now after a pension reform plan cleared its last hurdle on Tuesday.
The Alabama State House passed Senate Bill 388 by a vote of 69-33, clearing the way for Governor Robert Bentley to sign the bill into law later this month. Current public employees will be exempt from the changes, which will take effect with new hires beginning next year.
The proposal sets a new minimum retirement age of 62 for all public employees. An age exception was made for people working in the field of law enforcement, where the minimum standard will be 56. The pension reform plan will also reduce the total amount of pension benefit for workers, who will now get to keep more of their take home pay in exchange.
Lawmakers said the changes were necessary to keep the pension system afloat long-term. Governor Bentley's office said the measure will save Alabama taxpayers more than $160 million annually, and $5 billion over the next thirty years.
A wave of Huntsville city employees filed for retirement earlier this year due to concerns over the changes, but City Administrator Rex Reynolds predicted that most of those workers would withdraw their retirement paperwork.
"It will have an immediate impact if the governor signs it," said Reynolds, who started as a police officer in 1980. "My papers are still in to retire, however, after today's events, I will pull that paperwork and continue to work...Obviously, it's a time for adjustment in the state retirement system, and we understand that. It was just the unknown. I'm glad something came to pass today, it will be settling to the workforce."
Governor Bentley said he would sign the bill into law as soon as possible.