Updated September 3, 2026. Quick answer: Employees’ Retirement System of Alabama (ERS): the COLA is granted only ad hoc by the Legislature, and none has been granted since 2006, service credit can be purchased, and its DROP closed to new participants on March 24, 2011. Vesting takes 10 years of creditable service.
Provisional. This page is published at medium confidence. The specific points that could not be confirmed are listed under What could not be verified below, and are named rather than smoothed over.
The verdicts
| Is the COLA granted? | Ad hoc (Legislature); none granted since 2006 |
|---|---|
| Is the COLA compounded? | Not stated |
| Vesting | 10 years of creditable service |
| Buy service credit? | Yes |
| DROP? | Closed to new participants (March 24, 2011) |
| State | Alabama |
Those first two rows are separate questions and are routinely confused. Whether you get an increase at all is one thing; whether it compounds is another. A system can grant an increase automatically every year and still compute it against your original benefit forever, which is a materially worse deal than it sounds.
The COLA
“Cost-of-Living Adjustments for retirees are made on an ad hoc basis by the State Legislature. The amount of the increase is based upon the provisions of the legislation.” RSA’s own newsletter is blunt about the track record: “COLAs have not been granted since 2006. Instead, the Legislature has worked to find other relief for retires that will not break the budget. This has led the Legislature to grant four, one-time retiree bonuses since 2008.”
Buying service credit
ERS purchasable service includes military service (cheapest in the first year of participation, far more expensive after 10 years of service), restoration of withdrawn service, maternity leave, previous local-government service, up to 10 years out-of-state public service, and workers’-compensation service. First-year military cost: “four percent of the average salary paid to a state employee during each year of claimed service plus eight percent interest compounded from the last date of service to the date of payment.” Withdrawn-service cost: “the amount previously withdrawn plus eight percent interest compounded from the date of withdrawal to the date of payment.” Most other categories: “the full actuarial cost.”
Run your own numbers before deciding: some purchases never recover their cost, and the calculator shows which.
Coordinate this with your overall retirement plan
An adviser can help weigh a COLA that may not compound, a service-credit purchase that may never pay for itself, or a DROP election against the rest of your retirement plan, but that does not replace the numbers in your own member statement.
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Vesting
“Members have a vested status in the ERS after accumulating 10 years of creditable service.” Unused sick leave cannot be converted to meet that minimum. Retirement eligibility on top of vesting differs by tier: Tier 1 members can retire at any age with 25+ years of service (30 for some agencies) or at 60 with 10+ years; Tier 2 members retire at 62 with 10+ years.
DROP
ERS ran a DROP but it is closed: “Due to Act 2011-27, the ERS stopped accepting DROP applications March 24, 2011.” Members who finished DROP participation before the closure and kept working still have their DROP account, but no new member can enter the program. The current Tier 2 handbook (covering members who joined after the closure) carries no DROP chapter at all.
DROP is rarer than it appears across the systems on this site: most have none.
What could not be verified
REFUND TERMS: this page does not state what happens to your contributions if you take a refund instead of leaving your account with the system: that comparison was not independently researched for this system this session, and is left as an open gap rather than guessed from another system’s rule. Consult your own plan’s refund/forfeiture terms before deciding. Any additional field marked “not stated” in the verdicts table above was genuinely absent from the official materials read, not omitted for space.
Sources
Read September 3, 2026.
Related public pension systems: Louisiana TRSL · Oregon PERS.
General information drawn from each system’s own official published materials, not legal, tax or financial advice. Vesting, COLA and buyback rules are set by state statute and plan tier, differ materially by hire date, and can change by future legislation. This page cannot see your own member statement, which governs. We are not a law firm, a tax adviser, or a fiduciary, and this is not personalized advice.
More Pensions & Annuities guides: see the full 125-page index.