Tennessee 2025-2026 Regular Session

Tennessee House Bill HB0313 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2		SENATE BILL 251
3		-	By ~~Yager~~
	3	+	By Reeves
4	4
5	5		HOUSE BILL 313
6	6		By Marsh
7	7
8	8
9	9		HB0313
10	10		001106
11	11		- 1 -
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13	13		AN ACT to amend Tennessee Code Annotated, Section 8-
14	14		25-213 and Title 8, Chapter 36, Part 8, relative to
15	15		reemployment after retirement.
16	16
17	17		BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
18	18		SECTION 1. Tennessee Code Annotated, Section 8-36-805, is amended by deleting the
19	19		section and substituting:
20	20		(a) A retired member or prior class member of the retirement system, and a
21	21		retiree of a local retirement fund receiving benefits in accordance with chapter 35, part 3
22	22		of this title may return to service temporarily in a position covered by the retirement
23	23		system and continue to draw the person's retirement allowance; provided, that all of the
24	24		following conditions are met:
25	25		(1) The retired member must have had a bona fide separation of service.
26	26		For purposes of this section, a "bona fide separation of service" means a
27	27		separation of service where there is:
28	28		(A) No prearranged agreement, whether verbal or in writing, prior
29	29		to the member's retirement between the member and a participating
30	30		employer in the retirement system for the member to return to work for
31	31		the employer after retirement; and
32	32		(B) A complete separation of service, from all employment in a
33	33		position or positions covered by the retirement system, for at least sixty
34	34		(60) calendar days between the member's effective date of retirement and
35	35		the first day of work for the employer as a retiree;
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40	40		(2) During a twelve-month period, the retiree must not work more than
41	41		one hundred twenty (120) days or the equivalent of one hundred twenty (120)
42	42		days, or if employed as a teacher by an institution of higher learning, twenty-four
43	43		(24) quarter credit hours or eighteen (18) semester credit hours;
44	44		(3) The entire compensation payable to the retired member for the
45	45		temporary employment period must not exceed an amount equal to the sum of
46	46		sixty percent (60%) of the annual full-time salary received by the retired member
47	47		in the year immediately prior to the member's last paid day of covered
48	48		employment, adjusted by five percent (5%) for each year since the member's last
49	49		paid day of covered employment or by such other percentage as may be
50	50		determined by the treasurer and the commissioner of human resources. In
51	51		determining the percentage for a given year, the treasurer and the commissioner
52	52		of human resources may consider any matter which, in their discretion, they
53	53		deem relevant, including, but not limited to, the condition of the labor market and
54	54		the ability to fill the respective positions;
55	55		(4) The retired member may work beyond the one hundred twenty (120)
56	56		days prescribed in subdivision (a)(2) if employed as a substitute teacher in a
57	57		public school system; provided, that the compensation payable to the retired
58	58		member for such work does not exceed the rate of compensation set by the
59	59		public school system for substitute teachers filling similar vacant positions, and
60	60		the total salary paid to any such retired member for teaching during the twelve-
61	61		month period does not exceed the pertinent pro rata share of average salary
62	62		being paid at the institution in the academic discipline concerned;
63	63		(5) The head of the employing entity or the head's designee:
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68	68		(A) Certifies to the retirement division the member's name, period
69	69		to be employed, number of days to be worked, compensation to be paid,
70	70		anticipated termination date, and that there was no explicit
71	71		prearrangement at the time of the member's retirement for future
72	72		employment with the new employing entity after the member's retirement.
73	73		The certification must be made in the manner prescribed by the
74	74		retirement division and must be filed annually, if applicable, and
75	75		acknowledged by the member;
76	76		(B) Submits a statement showing working hours and
77	77		compensation for the retiree when requested; and
78	78		(C) Is subject to audit to verify working hours and the
79	79		compensation being paid;
80	80		(6) If the period of return to service or the compensation therefor exceed
81	81		that specified in this section, then the person's monthly retirement allowance
82	82		must be reduced by the greater of the following:
83	83		(A) Each day worked in excess of the limitation must result in the
84	84		loss of one-twentieth (1/20) of the monthly retirement allowance; or
85	85		(B) Any compensation received in excess of the limitation must
86	86		reduce the retirement allowance payable by the ratio the compensation
87	87		exceeds the limitation;
88	88		(7) The retirement system may obtain reimbursement for any retirement
89	89		benefits overpaid as a result of a retiree's reemployment in excess of that
90	90		permitted by this section, by deductions from a retiree's monthly benefit;
91	91		(8) The retired member, if otherwise eligible, may participate in the
92	92		state's 401(k) or 457(b) deferred compensation plans, but is not eligible to accrue
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97	97		additional retirement benefits in the retirement system as a result of the
98	98		member's reemployment; and
99	99		(9) The retiree is not drawing disability retirement benefits under this
100	100		chapter.
101	101		(b) For a member whose effective date of retirement was in fiscal years 2022-
102	102		2023, 2023-2024, or 2024-2025, with the state fiscal year being from July 1 to June 30, if
103	103		the retirement system discovers that the member did not have a bona fide separation of
104	104		service, then the member must be treated as receiving an in-service distribution and the
105	105		retirement system shall make any required tax reporting changes to reflect the in-service
106	106		distribution in prior years. After July 1, 2025, the identified members may be temporarily
107	107		reemployed pursuant to this chapter after a bona fide separation of service.
108	108		SECTION 2. Tennessee Code Annotated, Section 8-36-809, is amended by deleting the
109	109		section and substituting:
110	110		Notwithstanding another law to the contrary, a retired member or prior class
111	111		member of the retirement system, and any retired member of a local retirement fund
112	112		receiving benefits pursuant to chapter 35, part 3 of this title may be reemployed in a
113	113		position covered by the retirement system without the loss or suspension of the retired
114	114		member's retirement system benefits; provided, that the following conditions are met, as
115	115		certified by the employer:
116	116		(1) The retired member must have had a "bona fide separation of
117	117		service". For purposes of this section, a "bona fide separation of service" means
118	118		a separation of service where there is:
119	119		(A) No prearranged agreement, whether verbal or in writing, prior
120	120		to the member's retirement between the member and a participating
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125	125		employer in the retirement system for the member to return to work for
126	126		the employer after retirement; and
127	127		(B) A complete separation of service from all employment in a
128	128		position or positions covered by the retirement system of at least sixty
129	129		(60) calendar days between the member's effective date of retirement and
130	130		the first day of work for the employer as a retiree;
131	131		(2) The retired member is reemployed in a hard-to-fill position. For
132	132		purposes of this section, a "hard-to-fill position" means a position where one (1)
133	133		or more of the following conditions are met:
134	134		(A) The employer is experiencing difficulty in recruiting and
135	135		retaining qualified employees for the position;
136	136		(B) The position requires specialized certification, credentials, or
137	137		education;
138	138		(C) The demand for the position exceeds the supply;
139	139		(D) The position is in high demand in the marketplace;
140	140		(E) The position is filled by key personnel;
141	141		(F) The position requires specific skills and experience; or
142	142		(G) The position has other unique recruitment or retention issues
143	143		identified and documented by the employer;
144	144		(3) During the reemployment, the retirement benefit payable to the retired
145	145		member must be reduced to seventy percent (70%) of the retirement allowance
146	146		the member would have otherwise been entitled to receive;
147	147		(4) The retired member's reemployment must not exceed one (1) year;
148	148		however, the retired member may be reemployed for additional one-year periods,
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153	153		provided, that the conditions contained in this section are met for each period of
154	154		reemployment;
155	155		(5) To fund the liability created by this section, the retired member's new
156	156		employer shall pay to the retirement system during each period of reemployment
157	157		the greater of:
158	158		(A) A payment equal to the amount the employer would have
159	159		contributed to the retirement system had the retired member been a
160	160		member of the retirement system during the period of reemployment; or
161	161		(B) An amount equal to five percent (5%) of the retired member's
162	162		earnable compensation;
163	163		(6) The retired member, if otherwise eligible, may participate in the
164	164		state's 401(k) or 457(b) deferred compensation plans, but is not eligible to accrue
165	165		additional retirement benefits in the retirement system as a result of the
166	166		member's reemployment;
167	167		(7) Prior to the commencement of each reemployment of the retired
168	168		member, the head of the retired member's new employer, or the head's
169	169		designee:
170	170		(A) Notifies the retirement division of the retired member's
171	171		reemployment with documents or information required by the retirement
172	172		system; and
173	173		(B) Certifies in writing to the retirement division that:
174	174		(i) The position is a hard-to-fill position;
175	175		(ii) The retired member has the requisite experience and
176	176		training for the position to be filled;
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181	181		(iii) No other qualified persons are reasonably available to
182	182		fill the position; and
183	183		(iv) There was no explicit prearrangement at the time of
184	184		the member's retirement for future employment with the new
185	185		employing entity after the member's retirement; and
186	186		(C) Makes the certification in the manner prescribed by the
187	187		retirement division, file the certification annually, if applicable, and ensure
188	188		the certification is acknowledged by the member; and
189	189		(8) The retiree is not drawing disability retirement benefits under this
190	190		chapter.
191	191		SECTION 3. Tennessee Code Annotated, Section 8-36-801(c), is amended by deleting
192	192		the second sentence and substituting:
193	193		This subsection (c) does not apply to retirees who return to service in a position covered
194	194		by the retirement system as provided in § 8-36-805, § 8-36-809, § 8-36-810, § 8-36-818,
195	195		or § 8-36-820.
196	196		SECTION 4. Tennessee Code Annotated, Section 8-25-213(1), is amended by deleting
197	197		the subdivision and substituting:
198	198		(1) Is subject to the applicable work and compensation limits set forth in § 8-36-
199	199		805(a).
200	200		SECTION 5. Tennessee Code Annotated, Sections 8-36-821 and 8-36-822, are
201	201		amended by deleting the sections in their entireties.
202	202		SECTION 6. Section 5 takes effect January 1, 2026, the public welfare requiring it. All
203	203		remaining sections of this act take effect July 1, 2025, the public welfare requiring it.