Code of Alabama - Title 45: Local Laws - Section 45-37-123.194 - Prohibition against diversion of funds

Section 45-37-123.194 - Prohibition against diversion of funds.

(a) Except as provided below and otherwise specifically required by law, it shall be impossible by operation of the plan or of the trust agreement, by termination of either, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement, or by any other means, for any part of the corpus or income of any trust fund maintained pursuant to the plan or any funds contributed thereto to be used for, or diverted to, purposes other than the exclusive benefit of members, former members, or their beneficiaries; and no funds of the system, whether in cash, securities, or otherwise, nor any income or yield thereof, shall be subject to or exacted on account of, any tax; and no retirement or disability allowance or right to return of contributions, or other benefits payable as set forth in the plan, shall be assignable or be subject to execution, levy, attachment, garnishment, or other legal process. Accordingly, the plan shall not recognize any domestic relations order attempting to provide a member’s benefits, or any portion thereof, to an alternate payee.

(b) In the event that the county shall make an excessive contribution under a mistake of fact, the pension board, or its agent, may demand repayment of such excessive contribution, and the trustees shall return such amount, adjusted for any income or loss in value so long as such amount is returned within one year of the date of the mistaken contribution. Notwithstanding the immediately preceding sentence, any such return shall be limited to an amount that, in the judgment of the pension board, would not cause the system to become actuarially unsound.

(c) In the event that the plan makes an overpayment to a member or beneficiary for any reason, such as, miscalculation of a pension benefit or payment prior to the time that the member or beneficiary was entitled to payment, the pension board may elect to offset future pension payments until such overpayment has been recouped by the trust fund. However, once a distribution has been made to a member or beneficiary, neither shall be allowed to voluntarily elect to repay the distribution to the plan.

(d) Subject to applicable law, no person shall be entitled to receive a deferred pension if his or her separation from the service from the county is due to his or her misappropriation of funds or property of the county, or to moral delinquency on his or her part.

(e) Subject to applicable law, if the board finds that a member’s service is terminated by resignation or discharge, or otherwise, as a consequence of such member’s dishonesty in handling the monies or property of the county or any department thereof, the member shall not be entitled to any retirement or disability benefit, but he or she shall upon application therefor be paid a refund of the full amount of his or her employee contributions, less any benefits previously paid to him or her.

(f) Subject to applicable law, a member's or beneficiary's benefit may be offset for obligations to the county, the pension board, or the trust fund.

(Act 2013-415, p. 1586, §2:9.5.)

Last modified: May 3, 2021