The Legislature of Alabama hereby finds and determines that the funding of accrued and accruing health care benefits to retired employees and their dependents is a proper governmental function and purpose of the state. The Governmental Accounting Standards Board has issued Statements 43 and 45, which set forth standards on accounting and reporting for post-employment benefits other than pensions by governments. The new standards will require the state to account for such post-employment benefits on an actuarial basis during an employee's career rather than on a pay-as-you-go basis during the employee's period of retirement. The Legislature has determined that it would be advisable for the state to create irrevocable trusts whereby the state may begin funding those benefits in advance to address and ultimately offset the state's accrued liabilities for such benefits. Therefore, the state, the State Employees' Insurance Board, and the Public Education Employees' Health Insurance Board are authorized and directed to create irrevocable trusts to be named the "Alabama Retired State Employees' Health Care Trust" and the "Alabama Retired Education Employees' Health Care Trust," respectively, which shall be created, funded, and administered in accordance with the provisions of this chapter to protect and enhance the financial condition of the State.
Last modified: May 3, 2021