Tennessee 2025-2026 Regular Session

Tennessee House Bill HB0535 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2		-	SENATE BILL 510
3		-	By Walley
	2	+	<BillNo> <Sponsor>
4	3
5	4		HOUSE BILL 535
6	5		By Haston
7	6
8	7
9	8		HB0535
10	9		001969
11	10		- 1 -
12	11
13	12		AN ACT to amend Tennessee Code Annotated, Title 8,
14	13		Chapter 25; Title 8, Chapter 34; Title 8, Chapter
15	14		35; Title 8, Chapter 36 and Title 8, Chapter 37,
16	15		relative to retirement.
17	16
18	17		BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
19	18		SECTION 1. Tennessee Code Annotated, Section 8-25-303(a)(1), is amended by
20	19		deleting the second sentence in the subdivision and substituting:
21	20		Beginning on July 1, 2021, any such employer match must equal one hundred percent
22	21		(100%) of the amount contributed by each state employee to the plan per month, up to a
23	22		maximum of fifty dollars ($50.00) per month or, alternatively, up to a higher maximum
24	23		that may be specifically prescribed in the annual general appropriations act.
25	24		SECTION 2. Tennessee Code Annotated, Section 8-34-101(14)(D), is amended by
26	25		adding the following as a new subdivision:
27	26		(iv) Compensation paid as an offset of a tax liability or as a reimbursement of
28	27		any withholdings required by state or federal law;
29	28		SECTION 3. Tennessee Code Annotated, Section 8-35-103, is amended by deleting the
30	29		section and substituting:
31	30		(a) Any person who becomes a part-time state employee or a part-time teacher
32	31		on or after July 1, 2025, shall become a member of the retirement system as a condition
33	32		of employment. Any person who becomes a part-time employee on or after July 1,
34	33		2025, for an employer participating under part 2 of this chapter that allows part-time
35	34		employee participation in the retirement system shall become a member of the
36	35		retirement system as a condition of employment.
37	36
38	37
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40	39
41	40		(b) A person who became a part-time employee between July 1, 1984, and June
42	41		30, 2025, and made an irrevocable election to participate in the retirement system shall
43	42		continue participation in the retirement system, as provided in chapters 34-37 of this title.
44	43		(c) The following employees are not eligible for membership in the retirement
45	44		system:
46	45		(1) Students;
47	46		(2) Seasonal or temporary employees under twenty-five (25) years of
48	47		age;
49	48		(3) Temporary employees in institutions of higher education; or
50	49		(4) Substitute teachers, unless such substitutes are under contract and
51	50		scheduled to work the same time as a regular teacher.
52	51		(d) Part-time employees working in institutions of higher education are eligible
53	52		for membership in the optional retirement plan found in chapter 25, part 2 of this title if
54	53		the institution certifies that the employee is a teacher.
55	54		(e) In cases of doubt as to the classification of an employee, the board of
56	55		trustees shall determine from objective criteria whether an employee is properly
57	56		classified.
58	57		(f) Any retiree who accepts part-time employment with an employer participating
59	58		in the retirement system will be considered as restored to employment within the
60	59		meaning of chapter 36, part 8 of this title, regardless of whether the retiree is eligible for
61	60		membership.
62	61		SECTION 4. Tennessee Code Annotated, Section 8-35-109, is amended by deleting the
63	62		section and substituting:
64	63		(a) Except as provided in § 8-35-123(c), any person who assumes office as a
65	64		state judge, a county judge, a county official, a commissioner, a county chair, a member
66	65
67	66
68	67		- 3 - 001969
69	68
70	69		of the general assembly, or any district attorney general and any assistant thereto by
71	70		whatever name called, on or after July 1, 2025, shall become a member of the
72	71		retirement system as a condition of taking office or assuming a position.
73	72		(b) Any person who assumed office as a state judge, a county judge, a county
74	73		official, a commissioner, a county chair, a member of the general assembly, or any
75	74		district attorney general and any assistant thereto by whatever name called, prior to July
76	75		1, 2025, and made an irrevocable election to participate in the retirement system, shall
77	76		continue membership in the retirement system, as provided in chapters 34-37 of this
78	77		title.
79	78		SECTION 5. Tennessee Code Annotated, Section 8-35-110, is amended by deleting the
80	79		section and substituting:
81	80		(a) Except as provided in § 8-35-123(c), any person who becomes a member of
82	81		the general assembly on or after July 1, 2025, shall become a member of the retirement
83	82		system as a condition of taking office.
84	83		(b) Any person who became a member of the general assembly before July 1,
85	84		2025, and who made an irrevocable election to become a member of the retirement
86	85		system shall continue membership in the retirement system, as authorized by the
87	86		employer and chapters 34-37 of this title.
88	87		SECTION 6. Tennessee Code Annotated, Section 8-35-111(b), is amended by deleting
89	88		the subsection and substituting:
90	89		(b) As used in this section, "public employee retirement system" includes any
91	90		political subdivision retirement system, but does not include the following:
92	91		(1) The Social Security Act (42 U.S.C. §§ 301-1397f) or another federal
93	92		retirement program;
94	93		(2) A local retirement system as provided for in part 3 of this chapter;
95	94
96	95
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98	97
99	98		(3) A deferred compensation plan, including, but not limited to, plans
100	99		established pursuant to §§ 401(k), 403(b), 457(b), and 457(f) of the Internal
101	100		Revenue Code (26 U.S.C. §§ 401(k), 403(b), 457(b), and 457(f)); or
102	101		(4) A defined benefit pension plan established and maintained by a local
103	102		government employer that is supplemental to the employer's participation in the
104	103		retirement system, and was established prior to May 17, 2023, where the total
105	104		combined employer and employee contributions do not exceed seven percent
106	105		(7%) of the employee's salary, and the supplemental benefits are subject to the
107	106		limitations set forth in § 8-36-102. At the request of the retirement system, the
108	107		local government shall conduct a periodic audit using an auditing or accounting
109	108		firm to demonstrate compliance with the limitations set forth in § 8-36-102 and
110	109		any applicable limitation pursuant to federal law, regulation, or ruling, with the
111	110		cost of the audit to be paid by the local government.
112	111		SECTION 7. Tennessee Code Annotated, Section 8-35-111, is amended by adding the
113	112		following new, appropriately designated subsection:
114	113		(h) All tax-deferred retirement plans established by public employers
115	114		participating in the state retirement system, wherein employer contributions are made,
116	115		must be approved by the director of the state retirement system.
117	116		SECTION 8. Tennessee Code Annotated, Section 8-35-113(c)(1), is amended by
118	117		deleting the subdivision and substituting:
119	118		(1) Members or former members of the state election commission with a
120	119		minimum of five (5) years of service on such commission are eligible for membership in
121	120		the Tennessee consolidated retirement system if the member assumes office prior to
122	121		July 1, 2025, and shall become a member in the retirement system, as a condition of
123	122		employment, if the member assumes office on or after July 1, 2025; except that
124	123
125	124
126	125		- 5 - 001969
127	126
128	127		retirement benefits of such members must be based on the Group 1 benefit formula as
129	128		defined by § 8-36-206(1)(A) and not on the minimum retirement allowance provided for
130	129		in § 8-36-209. This service is independent of all other creditable service for the purpose
131	130		of calculation of the average final compensation. Such benefits are subject to the
132	131		limitations of § 8-36-102.
133	132		SECTION 9. Tennessee Code Annotated, Section 8-35-116, is amended by deleting the
134	133		section and substituting:
135	134		(a) Notwithstanding another law to the contrary, a full-time employee assuming
136	135		office as a county official or county judge, as defined in § 8-34-101, on or after July 1,
137	136		2025, shall become a member of the Tennessee consolidated retirement system as a
138	137		condition of taking office, and shall participate in the same manner, making and
139	138		receiving the same contributions, and is eligible for the same benefits, as other
140	139		employees of the county, if the county in which the county official or county judge is
141	140		employed is participating in the retirement system in accordance with part 2 of this
142	141		chapter.
143	142		(b) Full-time employees in the positions of county judge and county officials, as
144	143		defined in § 8-34-101, who took office between June 30, 1981, and June 30, 2025, and
145	144		made an irrevocable election to participate in the retirement system shall continue their
146	145		participation in the retirement system, as authorized by the county's governing body and
147	146		chapters 34-37 of this title.
148	147		(c) Notwithstanding subsection (b), any county official or county judge who takes
149	148		office on or after July 1, 2018, shall become a member of the Tennessee consolidated
150	149		retirement system as a condition of taking office if the county official or county judge is a
151	150		current or former member of the retirement system. This subsection (c) does not apply if
152	151		the county official or county judge was in office as a county official or county judge with
153	152
154	153
155	154		- 6 - 001969
156	155
157	156		the county on the date the county elected to participate in the retirement system, unless
158	157		the county official or county judge was a member or former member of a closed
159	158		preexisting defined benefit plan maintained by that county.
160	159		(d) The retirement system is not liable for the payment of retirement allowances
161	160		or other payments for a local government's employees or beneficiaries, for which
162	161		reserves have not been previously created from funds contributed by the local
163	162		government or its employees. It is the legislative intent that the state realizes no
164	163		increased cost as a result of this section or the local government's participation in the
165	164		retirement system pursuant to part 2 of this chapter. All costs associated with retirement
166	165		coverage, including administrative costs, are the responsibility of the local government.
167	166		SECTION 10. Tennessee Code Annotated, Section 8-35-123, is amended by deleting
168	167		the section and substituting:
169	168		(a) Any person participating in the Tennessee consolidated retirement system
170	169		prior to July 1, 2025, pursuant to §§ 8-35-101, 8-35-103, 8-35-115, 8-35-116, and 8-35-
171	170		226, or as a state judge, county judge, county official, commissioner, county chair or
172	171		attorney general, and who elected to become a member of the retirement system, shall
173	172		continue to participate in the retirement system under the member's irrevocable election.
174	173		Such members are subject to the same terms and conditions applicable to members
175	174		whose participation is mandatory under this title, as may be amended through an
176	175		enactment of the general assembly.
177	176		(b) Except as provided in subsection (c), any person employed or assuming
178	177		office on or after July 1, 2025, pursuant to §§ 8-35-101, 8-35-103, 8-35-115, 8-35-116,
179	178		and 8-35-226, or as a state judge, county judge, county official, commissioner, county
180	179		chair, or attorney general whose membership was otherwise optional in the retirement
181	180		system, shall become a member of the retirement system as a condition of employment.
182	181
183	182
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185	184
186	185		(c) A person whose membership was otherwise optional in the retirement
187	186		system and who was employed or holding office prior to July 1, 2025, as a state judge,
188	187		county judge, county official, commissioner, county chair, attorney general, or general
189	188		assembly member, and made an irrevocable election to not participate in the retirement
190	189		system shall maintain that election if, with or without interruption in service, the member
191	190		is:
192	191		(1) Reappointed or reelected to the same position after June 30, 2025; or
193	192		(2) Appointed or elected to a new position listed in this subsection (c)
194	193		after June 30, 2025.
195	194		(d) The retirement system is not liable for the payment of retirement allowances
196	195		or other payments on account of the employees or beneficiaries of any employer
197	196		participating under part 2 of this chapter for which reserves have not been previously
198	197		created from funds contributed by the employer or its employees. It is the legislative
199	198		intent that the state realizes no increased cost as a result of this section. All costs
200	199		associated with retirement coverage, including administrative costs, are the
201	200		responsibility of the respective employer.
202	201		SECTION 11. Tennessee Code Annotated, Section 8-35-226(a), is amended by
203	202		deleting the subsection and substituting:
204	203		(a) Appointed or elected school board members of special school districts, and
205	204		of city or county boards, commissions, committees, councils, and the like, by whatever
206	205		name known, who are elected by popular vote, and whose duties are performed
207	206		intermittently or periodically for the purposes of fixing rates, issuing permits or licenses,
208	207		regulating trades or professions, or who serve in an advisory, study or planning capacity
209	208		and the like are eligible for membership in the retirement system if the board member
210	209		assumes office prior to July 1, 2025, and shall become a member in the retirement
211	210
212	211
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214	213
215	214		system if the board member assumes office on or after July 1, 2025, assuming the
216	215		employer allows participation upon satisfying the following:
217	216		(1) The chief legislative body of the city, special school district, or county
218	217		passes a resolution approved by a two-thirds (2/3) majority authorizing
219	218		membership for such employees and accepting the liability therefor;
220	219		(2) Upon such authorization and assumption of the employer liability, any
221	220		such employee who meets the requirements of § 8-35-203(a)(2)(A) and (B) are
222	221		eligible to establish retirement credit for such periods of previous service as
223	222		authorized for other employees of the city, special school district, or county;
224	223		(3) An employee establishing such prior service shall make a lump sum
225	224		payment equal to the employee contributions the employee would have made
226	225		had the employee been a member of the system during the period claimed, plus
227	226		interest at the rate provided in § 8-37-214; and
228	227		(4) Membership in the retirement system pursuant to this section is
229	228		permitted only if the chief legislative body that has authorized retirement
230	229		participation for its departments or instrumentalities extends such coverage to all
231	230		nonparticipating departments and instrumentalities. If such option is elected,
232	231		then the remaining departments and instrumentalities shall participate under the
233	232		conditions of § 8-35-201.
234	233		SECTION 12. Tennessee Code Annotated, Section 8-35-234, is amended by deleting
235	234		the section and substituting:
236	235		(a) Notwithstanding another law to the contrary, a full-time employee serving as
237	236		a city judge or city attorney for a municipality on or after July 1, 2025, shall become a
238	237		member of the Tennessee consolidated retirement system as a condition of
239	238		employment, and shall participate in the same manner, making the same contributions,
240	239
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243	242
244	243		and is eligible for the same benefits, as other employees of the municipality, if the
245	244		municipality in which the city judge or city attorney is employed is participating in the
246	245		retirement system in accordance with part 2 of this chapter.
247	246		(b) The city judges and city attorneys participating in the retirement system
248	247		separately from other municipal employees prior to July 1, 2025, shall continue their
249	248		participation in the retirement system, as authorized by the municipality's governing body
250	249		and chapters 34-37 of this title.
251	250		(c) The retirement system is not liable for the payment of retirement allowances
252	251		or other payments for a local government's employees or beneficiaries, for which
253	252		reserves have not been previously created from funds contributed by the local
254	253		government or its employees. It is the legislative intent that the state realizes no
255	254		increased cost as a result of this section or the local government's participation in the
256	255		retirement system pursuant to part 2 of this chapter. All costs associated with retirement
257	256		coverage, including administrative costs, are the responsibility of the local government.
258	257		SECTION 13. Tennessee Code Annotated, Section 8-35-237, is amended by deleting
259	258		the section and substituting:
260	259		(a) Notwithstanding another law to the contrary, a full-time employee assuming
261	260		office as an elected purchasing agent or appointed administrator of elections for an
262	261		employer on or after July 1, 2025, shall participate in the Tennessee consolidated
263	262		retirement system in the same manner, making the same contributions and is eligible for
264	263		the same benefits as the employer's other employees, if the employer in which the
265	264		purchasing agent or administrator of elections is employed is participating in the
266	265		retirement system in accordance with part 2 of this chapter.
267	266		(b) The purchasing agents and administrator of elections participating in the
268	267		retirement system separately from other county employees prior to July 1, 2025 through
269	268
270	269
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272	271
273	272		an irrevocable election to participate in the retirement system, shall continue their
274	273		participation in the retirement system as authorized by the county's governing body and
275	274		chapters 34-37 of this title.
276	275		(c) The retirement system is not liable for the payment of retirement allowance or
277	276		other payments for a local government's employees or beneficiaries, for which reserves
278	277		have not been previously created from funds contributed by the local government or its
279	278		employees. It is the legislative intent that the state realizes no increased cost as a result
280	279		of this section or the local government's participation in the retirement system pursuant
281	280		to part 2 of this chapter. All costs associated with retirement coverage, including
282	281		administrative costs, are the responsibility of the local government.
283	282		SECTION 14. Tennessee Code Annotated, Section 8-35-256(a)(2), is amended by
284	283		deleting the subdivision and substituting:
285	284		(2) A political subdivision that adopts the hybrid plan authorized in this section
286	285		may make employer contributions to the defined contribution plan component of the
287	286		hybrid plan pursuant to § 8-36-916 and to any one (1) or more additional tax-deferred
288	287		compensation plans established pursuant to §§ 401(k), 403(b), 457(b), and 457(f) of the
289	288		Internal Revenue Code (26 U.S.C. §§ 401(k), 403(b), 457(b), and 457(f)), and subject to
290	289		the limitations in the Internal Revenue Code.
291	290		SECTION 15. Tennessee Code Annotated, Section 8-36-116, is amended by deleting
292	291		the section and substituting:
293	292		(a) It is the intent of the general assembly to recover amounts that have been
294	293		overpaid in error to members, beneficiaries, or persons who are not entitled to receive
295	294		the payment or payments.
296	295		(b) These overpayments may be recovered through any one (1) or more
297	296		methods, including, but are not limited to, the following:
298	297
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302	301		(1) A bank reclamation of the overpaid amount;
303	302		(2) A benefit reduction from a member's or beneficiary's benefit, which
304	303		amount must be determined based on facts and circumstances. The benefit
305	304		reduction may occur by:
306	305		(A) Reducing the monthly benefit payment to the member or
307	306		beneficiary for as many months as necessary to recover the
308	307		overpayment; or
309	308		(B) Reducing the monthly benefit payment to the member or
310	309		beneficiary by an amount actuarially determined to be adequate to
311	310		recover the overpayment during the period the monthly benefit payment
312	311		will be made to the member or beneficiary;
313	312		(3) A payroll deduction in the event the member returns to service with
314	313		an employer participating in the retirement system. The employer shall comply
315	314		with the retirement system's request for a payroll deduction;
316	315		(4) A promissory note or other documentation obligating the repayment
317	316		of the overpaid amount;
318	317		(5) A collection agency;
319	318		(6) Filing a claim against the estate of the person overpaid;
320	319		(7) Legal action; or
321	320		(8) Any other methods approved by the state treasurer.
322	321		(c) Consistent with the board's duty as a fiduciary to the fund and guidance
323	322		issued by the United States treasury, and notwithstanding this section or another law or
324	323		rule to the contrary, including the Uniform Administrative Procedures Act, compiled in
325	324		title 4, chapter 5, the retirement system may establish and implement policies and
326	325		procedures to waive recovery of the overpayment, with the exception of an overpayment
327	326
328	327
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330	329
331	330		caused by a failure to observe any limitation imposed by 26 U.S.C. §§ 401(a)(17) and
332	331		415.
333	332		SECTION 16. Tennessee Code Annotated, Section 8-36-203(3), is amended by
334	333		deleting the subsection and substituting it with:
335	334		(3) Distribution of a member's benefit must begin with the required beginning
336	335		date, which is April 1 of the calendar year following the calendar year in which the
337	336		member attains seventy and one-half (70.5) years of age or seventy-two (72) years of
338	337		age if the member was born on or after July 1, 1949, as such age is extended or
339	338		otherwise modified by the Internal Revenue Code or the regulations promulgated
340	339		thereunder, or April 1 of the calendar year following the calendar year in which the
341	340		member terminates, whichever is later. If a member fails to apply for retirement benefits
342	341		by the later of either of those dates, then the retirement system shall begin distribution of
343	342		the benefit, assuming the member did not select a retirement allowance of equivalent
344	343		actuarial value in favor of a beneficiary under one (1) of the options named in § 8-36-
345	344		601(b); and
346	345		SECTION 17. Tennessee Code Annotated, Section 8-36-601(b), is amended by adding
347	346		the following new subdivisions:
348	347		(5) Option 5. A reduced retirement allowance payable during the retired
349	348		member's life, with the provision that it must continue after the member's death at seven
350	349		tenths (0.7) the rate paid to the member and be paid for the life of, and to, the
351	350		beneficiary nominated by the member by written designation duly acknowledged and
352	351		filed with the board of trustees at the time of retirement.
353	352		(6) Option 6. A reduced retirement allowance payable during the retired
354	353		member's life, with the provision that it must continue after the member's death at seven
355	354		tenths (0.7) the rate paid to the member and be paid for the life of, and to, the
356	355
357	356
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359	358
360	359		beneficiary nominated by the member by written designation duly acknowledged and
361	360		filed with the board of trustees at the time of retirement; provided, that if the designated
362	361		beneficiary predeceases the retired member, then the retirement allowance payable to
363	362		the member after death of the designated beneficiary must be equal to the retirement
364	363		allowance that would have been payable had the member not elected an option.
365	364		SECTION 18. Tennessee Code Annotated, Section 8-36-606, is amended by deleting
366	365		the section and substituting:
367	366		(a) A retired member who has not selected an optional retirement allowance
368	367		under § 8-36-601(b) may change the retiree's designated beneficiary at any time;
369	368		provided, that the change is in writing, duly executed and filed with the retirement
370	369		system.
371	370		(b) The election of a designated beneficiary under an optional retirement
372	371		allowance as provided in § 8-36-601(b) must not be canceled or changed by the retiree
373	372		after the retiree's effective date of retirement except as provided in subsections (c)-(f).
374	373		(c) After a retired member's effective date of retirement or such later time as may
375	374		be provided in rules adopted by the board of trustees, the retiree may cancel the retiree's
376	375		designated beneficiary because of the death of the beneficiary or the retiree's divorce
377	376		from the designated beneficiary, upon the written request of the retiree. If the retiree
378	377		designated multiple beneficiaries, then the portion of the benefit payment that was
379	378		payable to the cancelled beneficiary must not be distributed or redistributed to the
380	379		remaining beneficiaries. The retiree shall provide the retirement system with the
381	380		completed and signed written cancellation request accompanied by either of the
382	381		following, whichever is applicable:
383	382		(1) A copy of the marital dissolution agreement and final decree of
384	383		divorce or annulment to confirm that the cancellation is not in conflict with the
385	384
386	385
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388	387
389	388		marital dissolution agreement or decree. If the requested cancellation conflicts
390	389		with the marital dissolution or decree, then the cancellation request must not be
391	390		honored; or
392	391		(2) A copy of the designated beneficiary's death certificate.
393	392		(d) If a retired member cancels the retiree's designated beneficiary pursuant to
394	393		subsection (c), then the retiree may:
395	394		(1) Designate a new beneficiary; provided, however, that upon the
396	395		retiree's death, the newly designated beneficiary is only entitled to the remaining
397	396		accumulated contributions in the retiree's account, if any, and to the last
398	397		retirement allowance payable in the month of the retiree's death. The retirement
399	398		allowance payable to the retired member after the cancellation of the designated
400	399		beneficiary pursuant to this section is not affected by the cancellation of the
401	400		beneficiary designation; or
402	401		(2) If the retiree selected only one (1) individual as the retiree's
403	402		beneficiary, designate the retiree's spouse as the member's sole, new
404	403		designated beneficiary, resulting in a reannuitization of the member's benefit.
405	404		(e) If the retiree elects to reannuitize pursuant to subdivision (d)(2), then the
406	405		retiree shall submit an application to reannuitize to the retirement system after the retired
407	406		member's marriage to the proposed new beneficiary, and provide the retirement system
408	407		with the marriage certificate demonstrating the marriage between the retiree and the
409	408		proposed new beneficiary.
410	409		(f) Upon receiving a completed application, the retirement system shall process
411	410		the reannuitization of the retiree's retirement benefit pursuant to the option selected by
412	411		the retiree on the retiree's effective date of retirement. The value of the new joint and
413	412		survivor annuity must be the actuarial equivalent of the retiree's benefit prospectively, in
414	413
415	414
416	415		- 15 - 001969
417	416
418	417		effect at the time the new annuity is elected. The benefit must be reduced based on the
419	418		ages of the retiree and the new beneficiary at the time of the change. The change in
420	419		beneficiary must become effective in the month following the month that the retirement
421	420		system approves the change in beneficiary.
422	421		SECTION 19. Tennessee Code Annotated, Section 8-36-903(c), is amended by
423	422		deleting the subsection and substituting:
424	423		(c)
425	424		(1) Except as provided in subdivisions (c)(2) and (c)(6), membership in
426	425		the hybrid plan or the optional retirement program, as applicable, is not required
427	426		for any part-time state employee or part-time teacher who would otherwise be
428	427		covered under this part, or for any state employee who had optional membership
429	428		in the retirement system pursuant to chapters 34-37 of this title prior to July 1,
430	429		2025.
431	430		(2) Notwithstanding another law to the contrary, and except as provided
432	431		in this subdivision (c)(2) and subdivision (c)(6), any person who becomes a part-
433	432		time state employee or a part-time teacher on or after July 1, 2016, but prior to
434	433		July 1, 2025, and who otherwise would be covered under this part, shall, upon
435	434		initial date of hire, file an irrevocable election to become or not to become a
436	435		participant in the hybrid plan or in the optional retirement program described in §
437	436		8-36-923, as applicable. Any person serving as a part-time state employee or
438	437		part-time teacher on June 30, 2016, but prior to July 1, 2025, and who otherwise
439	438		would be covered under this part, but who did not elect to participate in the hybrid
440	439		plan or in the optional retirement program described in § 8-36-923, shall, by no
441	440		later than October 31, 2016, file an irrevocable election to become or not to
442	441		become a participant in the hybrid plan or in the optional retirement program
443	442
444	443
445	444		- 16 - 001969
446	445
447	446		described in § 8-36-923, as applicable. This subdivision (c)(2) does not prohibit
448	447		an eligible employee from making the elections authorized in chapter 25, part 2
449	448		of this title. Any person who becomes a part-time state employee or a part-time
450	449		teacher on or after July 1, 2025, shall become a member of the retirement
451	450		system as a condition of taking office or assuming a position.
452	451		(3) Notwithstanding this subsection (c), § 8-35-109, or another law to the
453	452		contrary, any person who becomes a state judge, district attorney general, or
454	453		member of the general assembly on or after July 1, 2016, but prior to July 1,
455	454		2025, and who has not otherwise maintained membership in the retirement
456	455		system based on previous service as a state employee or teacher, shall, upon
457	456		the initial date of taking office, file an irrevocable election to become or not to
458	457		become a participant in the hybrid plan. A person serving as a state judge,
459	458		district attorney general, or member of the general assembly on June 30, 2016,
460	459		and who is not a participant in the hybrid plan or who has not otherwise
461	460		maintained membership in the retirement system based on previous service as a
462	461		state employee or teacher, shall, by no later than October 31, 2016, file an
463	462		irrevocable election to become or not to become a participant in the hybrid plan.
464	463		Notwithstanding this subdivision (c)(3), any person who assumes office as a
465	464		state judge, district attorney general, or member of the general assembly, on or
466	465		after July 1, 2025, shall become a member of the retirement system as a
467	466		condition of taking office or assuming a position.
468	467		(4) Notwithstanding another law to the contrary and except as provided in
469	468		this subdivision (c)(4) and subdivision (c)(6), any member of the state election
470	469		commission who has not otherwise maintained membership in the retirement
471	470		system based on previous service as a state employee or teacher, shall, on the
472	471
473	472
474	473		- 17 - 001969
475	474
476	475		first day following completion of five (5) years of service on the commission, file
477	476		an irrevocable election to become or not to become a participant in the hybrid
478	477		plan. Any member of the state election commission who has completed a
479	478		minimum of five (5) years of service on the commission as of June 30, 2016, and
480	479		who is not a participant in the hybrid plan or who has not otherwise maintained
481	480		membership in the retirement system based on previous service as a state
482	481		employee or teacher, shall, by no later than October 31, 2016, file an irrevocable
483	482		election to become or not to become a participant in the hybrid plan.
484	483		Notwithstanding this subdivision (c)(4), any person who assumes office as a
485	484		member of the state election commission on or after July 1, 2025, shall become a
486	485		member of the retirement system as a condition of taking office or assuming a
487	486		position.
488	487		(5) The elections provided for in this subsection (c) must be made in the
489	488		manner prescribed by the retirement system and must be filed with the retirement
490	489		system. The elections provided for in this subsection (c) do not include any
491	490		option for the employee to have a cash or deferred election right with respect to
492	491		designated employee contributions, and the employee contributions must be
493	492		picked up in accordance with § 8-36-904(b).
494	493		(6) Notwithstanding this subsection (c), any current or former member of
495	494		the retirement system or of a superseded system who accepts, or is elected to, a
496	495		position between July 1, 2018, and June 30, 2025, for which membership in the
497	496		hybrid plan was optional pursuant to this subsection (c) shall become a member
498	497		of the hybrid plan as a condition of employment. This subdivision (c)(6) does not
499	498		apply to retired members of the retirement system or of a superseded system
500	499
501	500
502	501		- 18 - 001969
503	502
504	503		who return to service in a position covered by the retirement system as provided
505	504		in § 8-36-805, § 8-36-809, § 8-36-810, § 8-36-818, § 8-36-820, or § 8-36-821.
506	505		SECTION 20. Tennessee Code Annotated, Section 8-36-916(c)(1), is amended by
507	506		deleting the subdivision and substituting:
508	507		(1) Each employer shall make a mandatory contribution to the defined
509	508		contribution component of the plan on behalf of each of its employees participating in the
510	509		hybrid plan, regardless of whether the employees make any employee contributions
511	510		pursuant to subsection (b). Employer contributions for kindergarten through twelve (K-
512	511		12) teachers must be paid by the respective local education agency for which the
513	512		teachers are employed. The amount of the contribution must be five percent (5%) of the
514	513		respective employee's salary. The mandatory contributions required in this subdivision
515	514		(c)(1) are in addition to any match provided for in § 8-25-303 to participants who
516	515		otherwise participate in a profit-sharing or salary reduction plan under chapter 25, part 3
517	516		of this title; provided, that the contributions conform to all applicable laws, rules, and
518	517		regulations of the internal revenue service governing profit sharing and salary reduction
519	518		plans for governmental employees.
520	519		SECTION 21. Tennessee Code Annotated, Section 8-36-919(a)(1)(B), is amended by
521	520		deleting the subdivision and substituting:
522	521		(B) Mandatory for all eligible employees entering the service of the political
523	522		subdivision thereafter; provided, however, and except as provided in subdivisions (a)(3)
524	523		and (4), membership is not required for any person who became a part-time employee
525	524		who would otherwise be covered under this part, or for any employee who has optional
526	525		membership in the retirement system pursuant to chapters 34-37 of this title. Any
527	526		election made by an employee to become a participant is irrevocable and such
528	527		employee is thereafter subject to the terms and conditions of the hybrid plan.
529	528
530	529
531	530		- 19 - 001969
532	531
533	532		SECTION 22. Tennessee Code Annotated, Section 8-36-919(a)(4), is amended by
534	533		adding the following language at the end of the subdivision:
535	534		Notwithstanding another law to the contrary, any person who becomes a part-time
536	535		employee on or after July 1, 2025, with a political subdivision participating in the hybrid
537	536		plan where the political subdivision authorized its part-time employees to participate in
538	537		the plan shall become a member of the retirement system as a condition of assuming
539	538		the position.
540	539		SECTION 23. Tennessee Code Annotated, Section 8-37-210(c), is amended by
541	540		deleting the language in the subsection and substituting:
542	541		(c) Distribution of a member's benefit must begin by the required beginning date,
543	542		which is April 1 of the calendar year following the calendar year in which the member
544	543		attains seventy and one-half (70.5) years of age or seventy-two (72) years of age if the
545	544		member was born on or after July 1, 1949, as such age is extended or otherwise
546	545		modified by the Internal Revenue Code or the regulations promulgated thereunder, or
547	546		April 1 of the calendar year following the calendar year in which the member terminates,
548	547		whichever is later. If a member fails to apply for retirement benefits by the later of either
549	548		of those dates, has been absent from service for more than seven (7) years after last
550	549		becoming a member, and has not completed the eligibility requirements for retirement as
551	550		set forth in § 8-36-204, then such person's accumulated contributions must be paid to
552	551		such person within ninety (90) days after the board is notified to that effect.
553	552		SECTION 24. Tennessee Code Annotated, Section 8-37-219(b)(3), is amended by
554	553		adding the following as a new subdivision:
555	554		(H) A SIMPLE IRA account described in § 408(p) of the Internal Revenue Code
556	555		(26 U.S.C. § 408(p)); provided, that the rollover is made two (2) years after the first
557	556		contribution is made to the member's SIMPLE IRA account;
558	557
559	558
560	559		- 20 - 001969
561	560
562	561		SECTION 25. This act takes effect upon becoming a law, the public welfare requiring it.