Payroll pension deductions set to increase for Alabama public employees

Under recent legislation passed by the Alabama Senate, state agency employees and those who work at schools, colleges and universities would contribute an additional 2.5 percent of their paychecks toward retirement coverage, the Birmingham News reports.

Because the Senate made changes to the version of the bill that was previously passed by the House of Representatives, the House must approve the modifications. If it does not, a committee of three senators and three representatives may be convened in order to draft a compromise bill.

Currently, most workers covered by the Teachers' Retirement System or Employees' Retirement System contribute 5 percent of their paychecks, the news source reports. This would rise to 7.25 percent this October and 7.5 percent in October 2012 under the version of the bill passed by the Senate, effectively constituting a pay cut for employees.

Supporters of the bill maintain that it is a necessary measure to avoid layoffs, and opponents argue that public employees should not be asked to make sacrifices in order to balance the budget.

Earlier this year, the state passed a law prohibiting the practice of making payroll deductions for union purposes, unless the organization does not use them for political activity.

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