Stealth retirement bill causes uproar in House
Measure allows the state to match contributions, but no money was approved to fund it
By JEFF AMY
Capital Bureau
MONTGOMERY - It looked like a bill to create a nice state employee benefit that might be funded someday when state
finances are healthier. Then, after they passed it Thursday, some House members discovered the measure contained
provisions to let elected officials draw retirement money from the state.
It allows the state to match contributions, but no money was approved to fund that provision. Legislators would
have to vote again to provide matching money.
That set off a roaring scramble, ultimately unsuccessful, to retrieve the bill before the Senate could approve
it. Some House members reacted angrily, saying they had been tricked.
"It sets up a damn retirement for legislators, which they've been after forever," said Rep. Riley Seibenhener,
R-Hartford.
Now Gov. Don Siegelman will have to decide whether the state should match a portion of lawmakers contributions
to the state equivalent of a 401-K plan. Ultimately, the issue could end up in court, because elected officials
are banned from drawing public pensions by the state constitution unless voters provide otherwise.
Carrie Kurlander, Siegelman's spokeswoman, said the governor hadn't decided what to do with the bill.
"He had never heard of it," she said.
The Senate passed the bill May 3 by a vote of 20-1, and the House passed the bill 80-6 just before 2 p.m. Thursday.
The provision was discovered shortly afterward, and Rep. Steve Clouse, R-Ozark moved to reconsider. But Rep. J.E.
Turner, R-Citronelle moved to table the reconsideration.
"I just felt like there wasn't any use fooling with it because it's already gone," Turner said.
The House disagreed, voting down Turner's tabling motion 43-31 and then voting 48-24 to reconsider. But by the
time House staffers got upstairs, the Senate had already concurred 23-2 with a House amendment and sent the bill
to Siegelman. Rep. Arthur Payne, R-Birmingham, said the skids appeared to be greased for the bill.
"It was orchestrated," Payne said of the lightning speed at which the bill got its second approval by
the Senate. "Now how often does that happen?"
Payne said he planned a resolution asking Siegelman to send the bill back with an executive amendment. But Turner
said the fuss was for nothing because there is little chance elected officials will ever get state money
"I find that to be a rather remote possibility," he said. "I don't think the House will ever approve
any funding for it."
The measure, sponsored by Sen. Roger Bedford, D-Russellville, had been backed by the Alabama Education Association
and the Alabama State Employees Association, which lobby for teachers and other state workers, respectively.
Mac MacArthur, executive director of ASEA, said the bill was designed to set up a chance for the state to kick
in small amounts to encourage employees to save for retirement. He said fewer than 10 states have such plans, and
most of those will match the first $300 of employee savings.
Retirement Systems of Alabama already has a savings plan, but it has no provisions for state matching, said RSA
lobbyist Marc Reynolds. Legislators can put money into that plan, which is invested alongside other RSA funds.
The new plan was tucked in under that section, meaning elected officials were always included.
"That's been in the bill from the beginning," said Bedford, who denied any deceit.
The new Public Employees' Defined Contributions Savings Fund would be governed by a seven-member board, all of
whom would be appointed by ASEA. The board could then contract with another entity to manage the money. MacArthur
said the bill didn't put the new fund under RSA because it was "a decision we made to give people more options."
MacArthur said chances were remote that the Legislature would choose to put any state matching money into the savings
plan anytime soon, and that ASEA didn't plan to ask for a contribution next year.
Reynolds said, under Internal Revenue Service rules, any state contributions to the plan would be considered pension
income. He said he wasn't sure if it would be considered a pension under state law, which bars retirement payments
to elected officials without a constitutional amendment. Some counties have enacted such amendments.
No matter how remote the chance, Rep Chris Pringle, R-Mobile, said the bill was wrong.
"Bottom line, we are part time, and who else gets a retirement from a part-time job?" he asked.
(The Associated Press contributed to this report.)
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