(a)The sources of funding to the Alabama Retired State Employees’ Health Care Trust may be:
(1)appropriations made by the Legislature;
(2)contributions by employees and retired employees;
(3)employer contributions;
(5)proceeds of any gifts, grants, or contributions;
(6)transfers from the State Employees’ Insurance Fund; and (7) all other sources permitted by law.
(b)The sources of funding to the Alabama Retired Education Employees’ Health Care Trust may be:
(1)appropriations made by the Legislature;
(2)contributions by employees and retired employees;
(3)employer contributions;
(5)proceeds of any gifts, grants, or contributions;
(6)transfers from the Public Education Employees’ Health Insurance Fund; and (7) all other sources permit
Free access — add to your briefcase to read the full text and ask questions with AI
(a) The sources of funding to the Alabama Retired State Employees’ Health Care Trust may be: (1) appropriations made by the Legislature; (2) contributions by employees and retired employees; (3) employer contributions; (4) investment income; (5) proceeds of any gifts, grants, or contributions; (6) transfers from the State Employees’ Insurance Fund; and (7) all other sources permitted by law.
(b) The sources of funding to the Alabama Retired Education Employees’ Health Care Trust may be: (1) appropriations made by the Legislature; (2) contributions by employees and retired employees; (3) employer contributions; (4) investment income; (5) proceeds of any gifts, grants, or contributions; (6) transfers from the Public Education Employees’ Health Insurance Fund; and (7) all other sources permitted by law.
(c) The agreements creating the trusts shall be irrevocable and the assets of the trusts shall not be expended or disbursed or loaned or transferred or used for any purpose other than to acquire permitted investments, pay administrative expenses, and provide post-employment health care benefits to or for retired employees and their dependents. The Legislature shall have no authority or power to appropriate the assets of the trusts.
(d) During each fiscal year, distributions from a trust to provide post-employment health care benefits to or for retired employees and their dependents shall not exceed 10 percent of the fair market value of the assets of such trust as of the last business day of the immediately preceding fiscal year. No distribution from a trust to provide post-employment health care benefits to or for retired employees and their dependents shall be made during the first fiscal year of the trust.
(e) Notwithstanding the above, as long as such amendment is consistent with the legislative intent of this chapter, the trustees of the trusts shall have the authority to amend or modify their respective trust: (1) if, in the opinion of counsel for the trustees of the respective trust, it is necessary or otherwise advisable to obtain any material tax advantage or avoid any material adverse tax result; (2) if, in the opinion of the independent accountant for the trustees of the respective trust, it is necessary or otherwise advisable to cause the trust to be considered another post-employment benefits trust in accordance with generally accepted governmental accounting principles, as prescribed by the Governmental Accounting Standards Board or its successor; or (3) if, in response to a petition of the respective trustees of the trust requesting that the trust be amended, a court of competent jurisdiction determines that such amendment is necessary or otherwise advisable to accomplish one or more purposes of this chapter.
(f) The trusts may be terminated by the boards only if all state plans or programs providing such post-employment health care benefits for which the trust is established are repealed or terminated and there is no future obligation of the state to provide such post-employment health care benefits. In such event, the then remaining assets of the trust shall revert, in the case of the Alabama Retired State Employees’ Health Care Trust, to the State Treasury to and for the credit of the State Employees’ Insurance Board and, in the case of the Alabama Retired Education Employees’ Health Care Trust, to the State Treasury to and for the credit of the Public Education Employees’ Health Insurance Board.
(g) All assets and income of the trusts shall be exempt from taxation by the state or any political subdivision thereof. Distributions from the trusts will not be taxable income to the retired employees or their dependents. The assets of the trusts will not be subject to the claims of creditors of the state, the boards, trustees, plan administrators, employees, retired employees, or dependents, and will not be subject to execution, attachment, garnishment, the operation of bankruptcy, the insolvency laws, or other process whatsoever, nor shall any assignment thereof be enforceable in any court.
(h) The trusts shall not be deemed to be invalid by reason of any indefiniteness or uncertainty of the persons designated as beneficiaries in the agreements creating the trusts, nor shall they be deemed to be invalid as violating any existing law against perpetuities or against suspension of the power of alienation of title to property or against trusts for the purpose of the accumulation of income; but each trust may continue for such a time as may be necessary to accomplish the purpose for which it was created.
(i) The trustees shall cause the annual financial statements of the trust to be prepared in accordance with generally accepted accounting principles and an audit by a qualified independent certified accounting firm to be conducted of those financial statements of the respective trust for each fiscal year in accordance with generally accepted auditing standards.