(a) The governing board of any county, city, town or public or quasi-public organization of the state or of any political subdivision thereof or the Alabama Extension Service and Agricultural Experiment Station System of Auburn University may, by resolution legally adopted to conform to rules prescribed by the Board of Control, elect to have its officers and employees from whatever sources and in whatever manner paid become eligible to participate in the retirement system; and the Adjutant General of the state, with the approval of the Governor, may, by application properly prepared and submitted in conformity with rules prescribed by the Board of Control, elect to have those employees of the Alabama National Guard employed pursuant to 32 U.S.C.A., Section 709, and paid from federally appropriated funds, become eligible to participate in this retirement system. The terms “officers” and “employees” as used in this section shall include those persons appointed or employed by the individual officers and performing their duties in public offices.
Acceptance of the employee of such an employer for membership in the retirement system shall be optional with the Board of Control; and, if it shall approve their participation, it shall set the date, which shall not be prior to October 1, 1946, when participation shall become effective, and then such employees may become members of the retirement system and participate therein as provided in the provisions of this section. Notwithstanding anything to the contrary in this section, employees of any such employer who are members of any retirement, pension or benefit fund partially or wholly supported by public funds shall not be entitled to become members of this retirement system.
(b) Membership in the retirement system shall be optional for employees of the employer who are in the service of the employer on the date when participation becomes effective, and any such employee who elects to join the retirement system within one year thereafter shall be entitled to a prior service certificate covering such periods of previous service as shall be certified as creditable service by his employer for service rendered to such employer, or his predecessor, or the state, or in any other capacity approved by the employer and the board, for which the employer is willing to make accrued liability contributions. Thereafter service for such employee on account of which the employer pays contributions shall be considered also as creditable service.
(c) Membership shall be compulsory for all employees entering the service of such employer after the date participation becomes effective.
(d) Should a majority of the members of any retirement, pension, annuity fund or retirement system of any employer, hereafter referred to as a local pension system, elect to become members of the retirement system, by a petition duly signed by such members, the participation of such members in the retirement system may be approved as provided in subsection (a) of this section as though such local pension system were not in operation, and the provisions of this section shall thereupon apply; except, that the existing pensioners or annuitants of the local pension system who were being paid pensions on the date of the approval shall be continued and paid at their existing rates by the retirement system, and the liability on this account shall be included in the computation of the accrued liability rate as provided by subsection (f) of this section. Any cash and securities to the credit of the local pension system shall be transferred to the retirement system as of the date of approval. The trustees or other administrative head of the local pension system as of the date of approval shall certify the proportion, if any, of the funds of the system that represents the accumulated contributions of the members, and the relative shares of the members as of that date. Such shares shall be credited to the respective employee annuity savings accounts of such members in the retirement system as additional contributions. The balance of the funds transferred to the retirement system shall be offset against the accrued liability before determining the special accrued liability contribution to be paid by the employer as provided by subsection (f) of this section. The operation of the local pension system shall be discontinued as of the date of the approval.
(e) The chief fiscal officer of the employer, and the heads of its departments, shall submit to the Board of Control such information and shall cause to be performed in respect to the employees of said employer such duties as shall be prescribed by the board in order to carry out the provisions of this article.
(f) The actuary of the retirement system shall compute the rates of contributions payable by employees who become members under the provisions of this section in the same manner as if they were state employees and shall compute the contributions which would be payable annually by the employer on behalf of such members as though they were state employees; except, that each employer of members participating in the system as provided in this section shall make a special accrued liability contribution on account of the participation of its officers and employees in the retirement system which shall be determined by an actuarial valuation of the accrued liability on account of the employees of such employer who elected to become members, in the same manner as the accrued liability rate was originally determined for state employees. This special accrued liability contribution, subject to such adjustment as may be necessary on account of any additional prior service credits awarded to employees of such employer, shall be payable in lieu of the accrued liability contribution payable on account of other employees in the system. The expense of making such initial valuation shall be assessed against and paid by the employer on whose account it is necessary. The contributions so computed, together with a pro rata share of the cost of the administration of the retirement system, based upon the payroll of the employees, shall be certified by the Board of Control to the chief fiscal officer of the employer. The amounts so certified shall be a charge against the employer. The chief fiscal officer of each such employer shall pay to the State Treasurer the amount certified by the board as payable under the provisions of this section, and the State Treasurer shall credit such amounts to the appropriate funds of the retirement system.
(g) Employees who become members under this section and on behalf of whom contributions are paid as provided in this section should be entitled to the benefits under the retirement system as though they were state employees.
(h) The agreement of any employer to contribute on account of its employees shall be irrevocable, but should an employer for any reason become financially unable to make the normal and accrued liability contributions payable on account of its employees, then such employer shall be deemed to be in default. All members of the retirement system who were employees of such employer at the time of default shall thereupon be entitled to discontinue membership in the retirement system and to a refund of their previous contributions upon demand made within 90 days thereafter. As of a date 90 days following the date of such default, the actuary of the retirement system shall determine by actuarial valuation the amount of the reserve held on account of each remaining active member and pensioner of such employer and shall credit to each such member and pensioner the amount of reserve so held. The reserve so credited, together with the amount of the accumulated contributions of each such active member, shall be used to provide for him a paid-up deferred annuity beginning at age 60, and the reserve of each pensioner shall be used in providing such part of his existing pension as the reserve so held will provide, which pension, together with his annuity, shall thereafter be payable to him. The rights and privileges of both active members and pensioners of such employer shall thereupon terminate, except as to the payment of the deferred annuities so provided and the annuities and pensions, or parts thereof, provided for the pensioners.
(i) Notwithstanding anything to the contrary, the retirement system shall not be liable for the payment of any pensions or other benefits on account of the employees or pensioners of any employer under this section, for which reserves have not been previously created from funds contributed by such employer or its employees for such benefits.
(j) The agreement of any employer to contribute on account of its employees shall be irrevocable except that by mutual consent any employer, and its employees desiring to withdraw from the Employees’ Retirement System as a unit, may do so by complying with the following provisions:
(1) The employer, by resolution of the governing body, shall signify its intention and desire to withdraw from the Employees’ Retirement System in writing and shall deliver copy of such resolution, together with the signatures of members as provided in subdivisions (2) and (3) of this subsection, to the Board of Control of the Employees’ Retirement System.
(2) Each member of such employer contributing on the date that the unit withdraws shall agree in writing to waive his rights, privileges and vested interest under the provisions of the Employees’ Retirement System Act, and shall agree to have his accumulated contributions with interest, as is provided to a member upon withdrawal, transferred to the employer and retained or expended in accordance with applicable local law.
(3) Each member of such employer who is not contributing on the date that the unit withdraws shall have his contributions plus interest retained in the State Employees’ Retirement System, and shall be governed under the applicable laws, except those who agree as in subdivision (2) of this subsection, in which event, their accumulated contributions with interest as is provided to a member upon withdrawal shall be treated in the same manner as in subdivision (2) of this subsection.
(4) The rights and privileges of existing beneficiaries of such employer shall neither be diminished, nor impaired, and the actuarial determination of the reserves necessary to provide the existing benefits shall be determined by the actuary employed by the state Employees’ Retirement System, and shall be certified to the governing body of the withdrawing unit, who shall agree to maintain such rights and privileges, and to maintain the reserves, as certified, for the existing beneficiaries. Should the reserves prove inadequate, such employer shall agree to appropriate such amounts as may be necessary to maintain the existing benefits. The signatures of the existing beneficiaries agreeing to waiver of their rights and privileges, and vested interest in the Employees’ Retirement System, and transfer of their accounts to the local employer shall be obtained by the employing unit. In the event any beneficiary declines to agree and sign such waiver of his rights and privileges, the reserves in the Annuity Reserve Fund and Pension Reserve Fund for such beneficiary shall be maintained by the Employees’ Retirement System under such rules and regulations as the Board of Control may adopt, and such reserves as may be determined by the actuary as necessary shall be retained out of any money which the withdrawing unit has remitted to the retirement system. Upon transfer of such funds to the employer the Employees’ Retirement System shall not be liable for the payment of any annuities or pensions or other benefits on account of such beneficiaries.
(5) The Board of Control of the Employees’ Retirement System shall promulgate such rules and regulations as are necessary to the termination of such employers’ and employees’ participation in the Employees’ Retirement System and shall determine the amounts returnable to the employer and employees upon the actuarial valuation of such amounts by the actuary. Any actuarial or extraordinary expenses involved in such termination and transfer of funds, if in excess of present administrative expense, shall be deducted from any funds returnable to the employer, but no transfer of funds shall take place in less than 90 days subsequent to date of notification of intention to withdraw by the employer subsequent to June 10, 1953.
(k) Notwithstanding the provisions of subsections (a) and (d) of this section, should a majority of the employees of any county board, department, or agency responsible for the local administration of a program for a state board, department, or agency, that are members of a retirement, pension, annuity fund, or retirement system, other than the Employees’ Retirement System, together with any other separate employer, hereafter referred to as a local pension system, elect to become members of the Employees’ Retirement System by a petition for membership duly signed by the members of the county board, department, or agency, the participation of the county employees in the Employees’ Retirement System may be approved upon legal adoption of a resolution by the governing board of the county department, agency, or board that conforms to the membership rules for local pension systems prescribed by the Board of Control of the Employees’ Retirement System. Notwithstanding any rules or procedures prescribed by the Board of Control, the existing county board, department, or agency pensioners or annuitants belonging to the local pension system and being paid pensions by the local system on the date of approval of the resolution, shall continue to be paid their pension benefits at their existing rates by the Employees’ Retirement System upon commencement of their participation in the Employees’ Retirement System, and the vested inactive members of the local pension system who are not receiving benefits on May 13, 1993, shall be entitled to begin receiving from the Employees’ Retirement System the amount of any benefits that they have vested under the local pension system upon meeting the eligibility requirements of the local pension system, and any liability for assumption by the Employees’ Retirement System of both the current benefits and the vested benefits shall be included in the computation of the accrued liability rate as provided in subsection (f) of this section. On the approval date of the resolution, the trustees or other administrators of the local pension system shall immediately require the actuary for the local system to determine the share of pension system assets to be allocated to the county board, department or agency on behalf of its employees, pensioners, annuitants, and vested inactive members by means of reconstruction of all contributions made to the local pension system by the county board, department, or agency and its employees since commencing participation in the local pension system, increased by return on investments, and decreased by payment of retirement benefits and withdrawals by employees who have withdrawn their contributions from the local pension system.
Such computation shall be adjusted, so that the local system is not left in an actuarially underfunded condition according to the last actuarial report of the local system. In the event some employees or retirees elect to remain in the local system, the amount transferred shall be appropriately adjusted prior to transfer of assets to the state Employees’ Retirement System.
The share of pension system assets as may be finally determined to be allocated on behalf of the county board, department, or agency employees shall be transferred to the Employees’ Retirement System at a time and in a manner as agreed upon by and among the governing board of the county board, department, or agency, the trustees or other administrators of the local pension system, and the Employees’ Retirement System. In no event shall the transfer be delayed longer than six months from the date of acceptance of the resolution by the Board of Control of the Employees’ Retirement System.
The operation of the local pension system shall continue from and after the withdrawal of the county board, department, or agency employees, pensioners, annuitants, and vested inactive members from the local pension system.