Professors will now have a few more pennies in the jar after they retire.
The Alabama State Legislature passed a mandate that went into effect Oct. 1 that requires all teachers and most state employees to contribute an additional 2.5 percent of their salaries to their retirement fund, bringing the total to 7.25 percent.
"Primarily it was a result of trying to balance the education trust fund budget and the general fund budget," said Chris Townes, director of benefits for the Teachers Retirement System of Alabama.
Auburn University employees, state troopers and bus drivers are included in the list.
The teachers had no say in the legislation and Townes believes there will be some noticeable effects.
"Any time you go back on how much money you spend on the community, it's going to have some sort of negative effect," Townes said, "although there will be no effect from the retirement perspective."
Another 0.25 percent increase will go into effect Oct.1, 2012, but other possible changes have yet to be addressed by the legislature.
"We haven't gotten anything specific from the legislature this year that resembles this bill," Townes said.
History professor Joseph Kicklighter is optimistic about the results of contributing more to his retirement fund.
"Clearly a lot of individuals may be retiring when they are eligible," Kicklighter said. "I think it's positive. It's a wonderful system. It's definitely worth the increase."
State police still have the highest contribution rate at 10 percent, and judicial employes have the second highest at 8.25 percent, according to a report distributed by the Retirement Systems of Alabama.
Compensating for the essential cut in salary, the Board of Trustees passed a permanent merit increase beginning the same date, according to www.al.com. This plan is divided into two tiers: a 3 percent permanent increase and a one-time 2 percent increase.
Kicklighter believes the effects may be looked at differently by younger employees than by more experienced employees, and the pay raise acts as an equalizer for the added requirement.
"When I came to Auburn, a professor told me that you may not get much salary, but we have a great retirement system," Kicklighter said.
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