HB 313 - SB 251
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 22, 2025
Fiscal Analyst: Elizabeth Bransford | Email: elizabeth.bransford@capitol.tn.gov | Phone: 615-741-2564
HB 313 - SB 251
SUMMARY OF BILL: Requires retired members of the Tennessee Consolidated
Retirement System (TCRS) and members of local retirement funds receiving benefits who
temporarily return to service to have a bona fide separation of service. Requires the employing entity
to certify to the retirement division that there was no explicit prearrangement to return to service at
the time of the member’s retirement.
Clarifies an eligible retired member may participate in the state’s 401(k) or 457(b) deferred
compensation plans but is not eligible to accrue additional benefits in the retirement system resulting
from reemployment. Prohibits a return to service member from drawing disability retirement.
Combines four separate return-to-work provisions into a single provision for hard-to-fill positions
and, therefore, deletes certain temporary return-to-work provisions effective January 1, 2026.
Extends indefinitely the authorization of retirees to return to work in a hard-to-fill position without
the loss or suspension of retirement benefits.
Requires, should TCRS discover certain retired members did not have a bona fide separation of
service, the member to be treated as receiving an in-service distribution. Authorizes such members
to be reemployed after July 1, 2025 following a bona fide separation of service.
FISCAL IMPACT:
NOT SIGNIFICANT
Assumptions:
• Pursuant to Tenn. Code Ann. § 8-36-805:
o Retired members may temporarily return to work and continue to draw their
retirement allowance if the retiree:
▪ Does not work more than 120 days during a 12-month period;
▪ Receives compensation that does not exceed 60 percent of the annual full-
time salary received by the retired member in the year immediately prior to
the member’s last paid day of covered employed; and
▪ Is reemployed upon the expiration of at least 60 calendar days from the
effective date of retirement.
o The employing entity must certify to TCRS the member’s name, period to be
employed, number of days to be worked, compensation, and anticipated
termination date; and
HB 313 - SB 251 2
o The retired member will not accrue additional retirement credit during period of
reemployment.
• The proposed legislation requires the retiree to have a bona fide separation of service in
order to return to work after retirement.
• A bona fide separation of service is present where there is no prearranged agreement prior
to the member’s retirement to return to work and the member has had a complete
separation of service from all employment covered by TCRS for at least 60 calendar days
between their effective date of retirement and the first day of work as a retiree.
• Under current law, there are four total temporary return-to-work provisions specific to law
enforcement officers, teachers, bus drivers, and emergency medical services personnel. The
proposed legislation consolidates the return-to-work provisions into one authorizing a
retiree to return to work temporarily with a TCRS covered employer in a hard-to-fill
position.
• The proposed legislation defines a hard-to-fill position as a position where: (1) the employer
is experiencing difficulty in recruiting and retaining qualified employees for the position; (2)
the position requires specialized certification, credentials, or education; (3) the demand for
the position exceeds the supply; (4) the position is in high demand in the marketplace; (5)
the position is filled by key personnel; (6) the position requires specific skills and
experience; or (7) the position has other unique recruitment or retention issues identified
and documented by the employer.
• In consolidating the return-to-work provisions, the proposed legislation deletes Tenn. Code
Ann. §§ 8-36-821 and 8-36-822, effective January 1, 2026.
• Because the combined return-to-work provisions are effective July 1, 2025, deleting these
provisions will not have an impact to retirees or the retirement system.
• Further, the proposed legislation extends indefinitely the return-to-work program. This
change is not expected to impact total lump sum liability or contributions by local
government.
• Any fiscal impact is estimated to be not significant.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director