MONTGOMERY, Ala. (AP) — The Alabama Legislature voted Wednesday to allow state workers and education employees to count some overtime pay to increase their pension benefits.
The Senate voted 33-0 and the House used a voice vote to give final passage to the bill. It now goes to Gov. Robert Bentley. His spokesman, Jeremy King, said Bentley supported the effort and he expects the governor to sign the bill into law pending a review of the final version.
The bill arose after the state personnel director and state comptroller asked Attorney General Luther Strange in 2011 if public workers could count overtime toward their pensions. State law did not provide for overtime to count toward pensions in the Retirement Systems of Alabama, Strange said. The pension system had been counting overtime since the 1970s. The opinion primarily affected law enforcement and corrections employees. Strange encouraged the Legislature to change the law to allow the practice of counting overtime to resume.
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"We advocated this change in the law to provide an important compensation for their dedicated public service," Strange said Wednesday.
The bill allows employees to count overtime equal to as much as 20 percent of their regular pay each year. A state pension is based on an employee's highest three years of compensation in his or her final 10 years of work. Lindy Beale, spokeswoman for the Retirement Systems of Alabama, said the cap would keep employees from working lots of overtime in their final years before retirement to cause their pensions to spike.
The Legislative Fiscal Office estimates the overtime legislation will cost the state an additional $3.6 million annually.
The attorney general's opinion in 2011 did not affect pension benefits that public employees had earned up to that point with their overtime.
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