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Alabama

Overview

The Retirement Systems of Alabama is the sole statewide retirement system in Alabama, administering retirement benefits for employees of the state, public school teachers, and employees of political subdivisions that have elected to participate. 

Plan Design

Defined benefit plans serve as the primary retirement benefit for substantially all public employees in Alabama.

According to the US Government Accountability Office, 97 percent of employees of state and local government in Alabama participate in Social Security.

Access plan design detail

Authorizing Statutes and Board Structure

AL Code § 36-27-2 establishes the Employees' Retirement System. AL Code § 36-27-23 establishes the ERS Board of Control, which includes 15 members. 

AL Code § 16-25-2 establishes the Teachers' Retirement System. AL Code § 16-25-19 establishes the TRS Board of Control, which includes 15 members. 

Details regarding the composition of these and other retirement boards is accessible via the Retirement and Investment Board Characteristics search tool located at the bottom of this page.

Fiduciary Duty/Prudence Standard

Employees' Retirement System: AL Code § 36-27-25 

(a) The Board of Control shall be the trustees of the several funds of the Employees' Retirement System created by this article as provided in Section 36-27-24 and shall have full power to invest and reinvest the funds, through its Secretary-Treasurer in the classes of bonds, mortgages, common and preferred stocks, shares of investment companies or mutual funds, or other investments as the Board of Control may approve, with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Subject to like terms, conditions, limitations and restrictions, the Board of Control, through its Secretary-Treasurer, shall have full power to hold, purchase, sell, assign, transfer, and dispose of any investments in which the funds created in Section 36-27-24 shall have been invested as well as the proceeds of the investments and any moneys belonging to the funds.

Teachers' Retirement System: AL Code § 16-25-20

(a) (1) The Board of Control shall be the trustees of the several funds of the Teachers' Retirement System created by this chapter as provided in Section 16-25-21, and shall have full power to invest and reinvest the funds, through its Secretary-Treasurer, in the classes of bonds, mortgages, common and preferred stocks, shares of investment companies or mutual funds, or other investments as the Board of Control may approve, with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with the matters would use in the conduct of an enterprise of a like character and with like aims; and, subject to like terms, conditions, limitations, and restrictions, the Board of Control, through its Secretary-Treasurer, shall have full power to hold, purchase, sell, assign, transfer, and dispose of any investments in which the funds created herein shall have been invested, as well as the proceeds of the investments and any moneys belonging to the funds.

Legal Protections of Retirement Benefits

Benefits are contractually protected for vested employees who are eligible to retire. Board of Trustees of Policemen's and Firemen's Retirement Fund of City of Gadsden v. Cary, 373 So.2d 841 (Ala. 1979)(pension benefits were vested for employees who had completed 20 years of service before the effective date of a statutory amendment, but were not vested for employees with less service); Calvert v. City of Gadsden, 454 So.2d 983 (Ala. 1984)(retirement benefits for members who had not yet served 20 years of service at time statute fixing retirement pay as last three years' rank had not yet vested and were not entitled to specific performance); Snow v. Abernathy, 331 So.2d 626 (Ala. 1976) (holding that where employee voluntarily elected to become member of the contributory retirement system relationship was contractual in nature giving rise to vested rights). (AL CONST., Article I, §22) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits

See also the following search tools:

Retirement System Account Interest Policies Economic Actuarial Assumptions Retirement and Investment Board Characteristics
Information about interest rates applied to account balances of inactive plan participants Assumed rates of investment return and inflation Composition of the members of public retirement and investment oversight boards
Mortality Assumptions Plan Design Features Post-retirement Employment Policies
Public retirement system actuarial assumptions for mortality Numerous elements of retirement plan design Policies governing return-to-work for retirement system annuitants

More Data

 

Flag of Alabama(February 16, 1895)[3]

Population (2025) 5,193,088

Alabama public pension statistics,
per U.S. Census Bureau as of FY 2025

Assets

$56.1 billion

Active Members

240,817

Annuitants

179,699

Benefits Paid

$4.7 billion

Employee Contributions

$1.1 billion

Employer Contributions

$2.1 billion

Systems

One state system that accounts for 94 percent of assets and 97 percent of public pension plan participants in the state. The Census Bureau also reports 12 local systems.

More Data

Other  Resources


 


Become A Member

Becoming a member of NASRA offers a unique opportunity to join a community committed to the sound, efficient, and innovative stewardship of public retirement systems. Membership connects you with a network of professionals and experts, providing valuable insights into managing public retirement systems with a focus on sustainability and risk-averse strategies.

By joining NASRA, you gain the tools and resources to enhance the management of public retirement systems, ensuring their long-term success and reliability for generations to come.

What’s New at NASRA: Employee Contributions to Public Pension Plans

Employee contributions remain a central part of public pension financing, and the way those contributions are structured is subject to change depending each states' governance rules. . NASRA’s 2026 updated brief finds median employee contribution rates of 6.2 percent of pay for employees who participate in Social Security and 9.0 percent for those who do not. For employees who do not participate in Social Security, the public pension often plays a broader role in retirement security, effectively providing two of the traditional three legs of the retirement stool rather than one.

Since 2009, 41 states  increased employee contributions in at least one plan, while some states recently reduced rates for selected employees. Variable contributions are also becoming more common, with 26 plans in 17 states adjusting employee rates based on funding, plan costs, or other factors. The brief provides current trends and a state-by-state look at employee contribution requirements across public retirement systems.