Senate passes legislation allowing state employees to purchase retirement credit for past federal service

March 10, 2026 – MONTGOMERY, Ala. – The Alabama Senate passes legislation that would allow state employees to purchase credits from the Retirement Systems of Alabama for their years of past federal service.

Senate Bill 280 (SB280) is sponsored by state Senator Jame "Jabo" Waggoner (R-Vestavia Hills).

Waggoner explained in committee that the state already allows state employees to do this for their military service.

The Senate adopted and passed a committee substitute for SB280. SB280 had received a favorable report as substituted in the Senate Finance & Taxation Education Committee.

Senate Bill 280 is a 2026 proposal that would expand Alabama's retirement rules by allowing state employees and teachers to purchase credit in the Employees' Retirement System (ERS) or Teachers' Retirement System (TRS) for prior federal public service. Under current law, members may already buy credit for certain out‑of‑state or prior public education service, but SB280 adds federal employment to the list. To qualify, a member must have at least 10 years of contributing service in Alabama (not counting military credit) and must meet several documentation and payment requirements. The bill also caps the amount of purchasable federal service at up to 10 years, aligning it with other categories of purchasable service.

The legislation requires members to pay the full actuarially determined cost of each year of federal service they wish to purchase and to obtain written certification from the relevant federal retirement system verifying that service. It also prohibits purchasing credit for any period of federal employment for which the member is already entitled to a public pension benefit elsewhere, with the exception of Social Security. Supporters argue the bill would help long‑serving public employees consolidate their careers into a single retirement system, while fiscal analysts note that requiring full actuarial cost protects the state from unfunded liabilities. SB280 was introduced by Sen. J.T. Waggoner and referred to the Senate Finance and Taxation Education Committee, where it remains under consideration.

Senator Roger Smitherman (D-Birmingham) said that he is in support of the bill, but wished that the state Legislature would do the same thing for themselves

Legislature website

Senator Rodger Smitherman

"You are the senior Senator," said Smitherman. "I am the junior Senator. I am wondering if we can get in on this? We as Legislators ought to be able to buy some retirement."

"We punish our own selves because we are legislators," continued Smitherman. "Why can't we tack on one word: legislators."

"Let us purchase retirement credits too," said Smitherman. "When are we going to stop punishing ourselves that we provide for any other state employee? I know what time of year it is (election) so I ain't going to say nothing else about it now, but we need to do something for ourselves. After this year I am going to be coming to the mic to ask how we can do something for ourselves."

Waggoner was noncommittal on Smitherman's state legislators retirement proposal.

SB280 – without the discussed Smitherman amendment – passed the Alabama Senate without opposition.

It now goes to the Alabama House of Representatives for their consideration.

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