Ala. Code
Code of Alabama

Ala. Code § 36-27-1 (2026)

Definitions.

✓ official Alabama Legislature (ALISON) text, current July 2026
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When used in this article, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) RETIREMENT SYSTEM. The Employees’ Retirement System of Alabama as defined in Section 36-27-2.

(2) EMPLOYEE. Any regular employee of the State of Alabama whose salary is paid by state warrant by the state, except a member of the Legislature of the state, a person who is covered or eligible to be covered under the Teachers’ Retirement System of Alabama or any other retirement system to which contributions are made by the state, an elective official of the state government, and a temporary employee or person engaged under retainer or special agreement. In all cases of doubt the Board of Control shall determine who is an employee within the meaning of this article. The term shall include any regular employee of the Alabama state hospitals and Partlow State School and Hospital and the Alabama State Port Authority, however paid.

(3) EMPLOYER. The State of Alabama or any department, commission, institution, or any other agency of and within the state by which an employee is paid, including employers as provided in Section 36-27-6.

(4) MEMBER. Any employee included in the membership of the system as provided in Section 36-27-4.

(5) BOARD OF CONTROL. The board provided for in Section 36-27-23 to administer the retirement system.

(6) MEDICAL BOARD. The board of physicians provided for in Section 36-27-23.

(7) SERVICE. Service as an employee paid for by an employer.

(8) PRIOR SERVICE. Service rendered prior to the date of establishment of the retirement system for which credit is allowable under Section 36-27-11.

(9) MEMBERSHIP SERVICE. Service as an employee rendered while a member of the retirement system and on account of which contributions are made.

(10) CREDITABLE SERVICE. “Prior service” plus “membership service” rendered since last becoming a member.

(11) BENEFICIARY. Any person in receipt of a pension, an annuity, a retirement allowance or other benefit as provided by this article.

(12) REGULAR INTEREST. Interest compounded annually at the rate determined by the Board of Control in accordance with subsection (f) of Section 36-27-25.

(13) ACCUMULATED CONTRIBUTIONS. The sum of all the amounts deducted from the compensation of a member credited to his or her individual account in the Annuity Savings Fund, together with regular interest thereon, as provided in Section 36-27-24.

(14) EARNABLE COMPENSATION. The full rate of compensation that would be payable to an employee if he or she worked the full normal work-time. In cases where compensation includes maintenance, the Board of Control shall fix the value of that part of the compensation not paid in money. Earnable compensation shall not exceed the limitations imposed by Section 401(a)(17) of the Internal Revenue Code for public pension funds, except that any employee who was a member of the Employees’ Retirement System before the first plan year beginning after December 31, 1995, shall not be subject to the earning limitations set forth in Section 401(a)(17). For Tier I plan members, the term earnable compensation for retirement purposes shall not include subsistence payments that are made to a member and shall include overtime payments that are made to a member; however, earnable compensation shall not exceed 120 percent of any members’ annual base compensation as certified by the employer. For Tier II plan members, earnable compensation shall include overtime payments that are made to the member but shall not include subsistence payments that are made to the member and shall not exceed one hundred twenty-five percent (125%) of the member’s annual base compensation, as certified by the employer.

(15) AVERAGE FINAL COMPENSATION. For any Tier I plan member, the average annual compensation of the member, with respect to which he or she had made contributions pursuant to subsection (b) of Section 36-27-24 during the three years, in his or her last 10 years of creditable service for which the average is highest or during his or her entire period of creditable service if less than three years; except, that for any period prior to November 1, 1959, the compensation used in computing the average shall include compensation in excess of the maximum amount with respect to which members were required to contribute. For any Tier II plan member, the average annual compensation of the member, with respect to which he or she has made contributions pursuant to subsection (b) of Section 36-27-24 during the five years, in his or her last 10 years of creditable service for which the average is highest or during his or her entire period of creditable service if less than five years.

(16) ANNUITY. Payments for life derived from the “accumulated contributions” of a member. All annuities shall be payable in equal monthly installments.

(17) PENSION. Payments for life derived from money provided by the employer. All pensions shall be payable in equal monthly installments.

(18) RETIREMENT ALLOWANCE. The sum of the “annuity” and the “pension.”

(19) RETIREMENT. Withdrawal from active service with a retirement allowance or optional benefit in lieu thereof granted under this article.

(20) ANNUITY RESERVE. The present value of all payments to be made on account of any annuity or benefit in lieu of any annuity computed upon the basis of the mortality tables adopted by the Board of Control and regular interest.

(21) PENSION RESERVE. The present value of all payments to be made on account of any pension or benefit in lieu of any pension computed upon the basis of the mortality tables adopted by the Board of Control and regular interest.

(22) ACTUARIAL EQUIVALENT. A benefit of equal value when computed upon the basis of the mortality tables adopted by the Board of Control and regular interest.

(23) STATE POLICEMAN. An employee in the classified service under the Merit System Act approved by the State Personnel Board to perform the duties of highway patrolman or a beverage control agent or a crime investigator. The term includes any employee of the Alabama State Law Enforcement Agency who is certified by the Alabama Peace Officers’ Standards and Training Commission and performs law enforcement duties. The term shall not include a member employed as a policeman under Section 36-27-6.

(24) TIER I PLAN. The defined benefit pension plan provided by the Retirement System to Tier I plan members.

(25) TIER II PLAN. The defined benefit pension plan provided by the Retirement System to Tier II plan members.

(26) TIER I PLAN MEMBER. Any member of the Retirement System who had service for which he or she received credit in the Employees’ Retirement System or in the Teachers’ Retirement System prior to January 1, 2013.

(27) TIER II PLAN MEMBER. Any member of the Retirement System who first began eligible employment with an Employees’ Retirement System or a Teachers’ Retirement System participating employer on or after January 1, 2013, and who had no eligible service in the Employees’ Retirement System or the Teachers’ Retirement System prior to January 1, 2013.

(Acts 1945, No. 515, p. 734, §1; Acts 1947, No. 606, p. 445, §1; Acts 1953, No. 79, p. 106, §1; Acts 1955, No. 364, p. 883, §1; Acts 1957, No. 28, p. 59, §1; Acts 1959, No. 375, p. 984, §1; Acts 1963, 1st Ex. Sess., No. 44, p. 144, §1; Acts 1971, No. 1463, p. 2490, §1; Acts 1975, No. 1103, p. 2176, §1; Acts 1995, No. 95-203, p. 313, §5; Act 2012-302, p. 658, §1; Act 2012-377, p. 944, §1; Act 2017-360, §1; Act 2023-73, §1.)

Notes of Decisions
Cited in 12 cases (1 in the last 5 years), 1983–2021 · leading case: Anthony L. Green v. Jackie Graham, 906 F.3d 955 (11th Cir. 2018).
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Anthony L. Green v. Jackie Graham, 906 F.3d 955 (11th Cir. 2018). · cites it 4× “” Ala. Code § 36-27-1 (23). The next most generous status, “law enforcement,” applies to correctional officers, firefighters, and law-enforcement officers not eligible for state-policeman status.”
Honeycutt v. Employees' Ret. Sys., 431 So. 2d 961 (Ala. 1983). · cites it 7× “§ 36-27-1. Furthermore, the Board of Control is vested with the responsibility for the general administration and proper operation of the Retirement System and given authority to establish rules and regulations for the administration of the system.”
Joe Taylor v. City of Gadsden, 767 F.3d 1124 (11th Cir. 2014). “” Ala.Code § 36-27-1(10). "Membership service” includes ”[s]ervice as an employee rendered while a member of the retirement system and on account of which contributions are made.”
Mitchell v. Employees' Ret. Sys. of Alabama, 642 So. 2d 480 (Ala. Civ. App. 1994). · cites it 6× “The trial court entered a judgment in favor of the Retirement System, ruling that payments for accumulated annual or sick leave made in contemplation of retirement do not constitute “earnable compensation” under Ala.Code 1975, § 36-27-1. It further found that the City had…”
S. States Police Benevolent Ass'n v. Bentley, 219 So. 3d 634 (Ala. 2016). · cites it 42× “” See § 36-27-1, Ala. Code 1975 (defining the terms “member,” “earnable compensation,” “creditable service,” and “average final compensation”).”
Green v. Graham (CONSENT) (M.D. Ala. 2020). · cites it 18× “Plaintiff alleges that because his primary duty is to investigate crimes, he “is a state policeman as defined by the retirement act, Ala. Code § 36-27-1 (23),” and that Graham and others have wrongfully “excluded [him] from participation in the state policeman retirement…”
Hirsch v. Alabama State Docks Dep't, 592 So. 2d 595 (Ala. Civ. App. 1991). “The appellants also requested that the court interpret § 36-27-1(2), Ala.Code 1975, which defines “employee.”
Employees' Ret. Sys. of Alabama v. Nesmith, 644 So. 2d 938 (Ala. Civ. App. 1993). “See §§ 36-27-1 through -103, Code 1975. Membership in ERS is a mandatory condition of employment for persons first employed by the state after October 1, 1945, and for persons employed by cities, counties, or other governmental entities which elect to participate in ERS pursuant…”
Snead v. Employees' Ret. Sys. of Alabama, 644 So. 2d 935 (Ala. 1994). · cites it 2× ““Should any beneficiary ['Any person in receipt of a pension, an annuity, a retirement allowance or other benefit as provided by this article,” Ala. Code 1975, § 36-27-1(11)] be restored to active service from service retirement .”
Norris v. Bronner, CEO, 565 So. 2d 652 (Ala. Civ. App. 1990). “§§ 36-27-1 et seq., Ala.Code 1975. We note that § 36-27-ll(h), Ala.”
West Virginia Consol. Pub. Ret. Bd. v. Robert Clark (W. Va. 2021). “, Ala. Code § 36-27-1 (14) (2017) (“[T]he term earnable compensation for retirement purposes shall not include subsistence payments that are made to a member[.”
Joe Taylor v. City of Gadsden (11th Cir. 2014). “” Ala. Code § 36-27-1 (10). “Membership service” includes “[s]ervice as an employee rendered while a member of the retirement system and on account of which contributions are made.”
Ala. Code § 36-27-1(10): 1 case
Joe Taylor v. City of Gadsden, 767 F.3d 1124 (11th Cir. 2014). “” Ala.Code § 36-27-1(10). "Membership service” includes ”[s]ervice as an employee rendered while a member of the retirement system and on account of which contributions are made.”
Ala. Code § 36-27-1(11): 1 case
Snead v. Employees' Ret. Sys. of Alabama, 644 So. 2d 935 (Ala. 1994). ““Should any beneficiary ['Any person in receipt of a pension, an annuity, a retirement allowance or other benefit as provided by this article,” Ala. Code 1975, § 36-27-1(11)] be restored to active service from service retirement .”
Ala. Code § 36-27-1(14): 2 cases
Mitchell v. Employees' Ret. Sys. of Alabama, 642 So. 2d 480 (Ala. Civ. App. 1994). “The trial court entered a judgment in favor of the Retirement System, ruling that payments for accumulated annual or sick leave made in contemplation of retirement do not constitute “earnable compensation” under Ala.Code 1975, § 36-27-1. It further found that the City had…”
S. States Police Benevolent Ass'n v. Bentley, 219 So. 3d 634 (Ala. 2016). “” See § 36-27-1, Ala. Code 1975 (defining the terms “member,” “earnable compensation,” “creditable service,” and “average final compensation”).”
Ala. Code § 36-27-1(15): 1 case
S. States Police Benevolent Ass'n v. Bentley, 219 So. 3d 634 (Ala. 2016). “” See § 36-27-1, Ala. Code 1975 (defining the terms “member,” “earnable compensation,” “creditable service,” and “average final compensation”).”
Ala. Code § 36-27-1(2): 1 case
Hirsch v. Alabama State Docks Dep't, 592 So. 2d 595 (Ala. Civ. App. 1991). “The appellants also requested that the court interpret § 36-27-1(2), Ala.Code 1975, which defines “employee.”
Ala. Code § 36-27-1(23): 1 case
Honeycutt v. Employees' Ret. Sys., 431 So. 2d 961 (Ala. 1983). “§ 36-27-1. Furthermore, the Board of Control is vested with the responsibility for the general administration and proper operation of the Retirement System and given authority to establish rules and regulations for the administration of the system.”
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