Alabama Senate Approves New Pension Plan

By: The Associated Press
By: The Associated Press

The Alabama Senate has approved legislation that sets up a new pension system for public employees
hired on Jan. 1, 2013, and thereafter.

The Senate voted 25-8 for the bill by Republican Sen. Arthur Orr of Decatur. The bill still must pass the House and be signed by the governor to take effect.

Orr said the bill is designed to save $5 billion over the next 30 years by requiring new hires to wait until 62 before drawing a state pension. Current state employees can retire with full benefits after 25 years of service, regardless of their age.

The bill also requires future public employees to pay less of their salary into the state pension system, but their retirement check will also be smaller.

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