Tennessee 2025-2026 Regular Session

Tennessee Senate Bill SB0510 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2	HOUSE BILL 535
3	3	By Haston
4	4
5	5	SENATE BILL 510
6	6	By Walley
7	7
8	8
9	9	SB0510
10	10	001969
11	11	- 1 -
12	12
13	13	AN ACT to amend Tennessee Code Annotated, Title 8,
14	14	Chapter 25; Title 8, Chapter 34; Title 8, Chapter
15	15	35; Title 8, Chapter 36 and Title 8, Chapter 37,
16	16	relative to retirement.
17	17
18	18	BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
19	19	SECTION 1. Tennessee Code Annotated, Section 8-25-303(a)(1), is amended by
20	20	deleting the second sentence in the subdivision and substituting:
21	21	Beginning on July 1, 2021, any such employer match must equal one hundred percent
22	22	(100%) of the amount contributed by each state employee to the plan per month, up to a
23	23	maximum of fifty dollars ($50.00) per month or, alternatively, up to a higher maximum
24	24	that may be specifically prescribed in the annual general appropriations act.
25	25	SECTION 2. Tennessee Code Annotated, Section 8-34-101(14)(D), is amended by
26	26	adding the following as a new subdivision:
27	27	(iv) Compensation paid as an offset of a tax liability or as a reimbursement of
28	28	any withholdings required by state or federal law;
29	29	SECTION 3. Tennessee Code Annotated, Section 8-35-103, is amended by deleting the
30	30	section and substituting:
31	31	(a) Any person who becomes a part-time state employee or a part-time teacher
32	32	on or after July 1, 2025, shall become a member of the retirement system as a condition
33	33	of employment. Any person who becomes a part-time employee on or after July 1,
34	34	2025, for an employer participating under part 2 of this chapter that allows part-time
35	35	employee participation in the retirement system shall become a member of the
36	36	retirement system as a condition of employment.
37	37
38	38
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40	40
41	41	(b) A person who became a part-time employee between July 1, 1984, and June
42	42	30, 2025, and made an irrevocable election to participate in the retirement system shall
43	43	continue participation in the retirement system, as provided in chapters 34-37 of this title.
44	44	(c) The following employees are not eligible for membership in the retirement
45	45	system:
46	46	(1) Students;
47	47	(2) Seasonal or temporary employees under twenty-five (25) years of
48	48	age;
49	49	(3) Temporary employees in institutions of higher education; or
50	50	(4) Substitute teachers, unless such substitutes are under contract and
51	51	scheduled to work the same time as a regular teacher.
52	52	(d) Part-time employees working in institutions of higher education are eligible
53	53	for membership in the optional retirement plan found in chapter 25, part 2 of this title if
54	54	the institution certifies that the employee is a teacher.
55	55	(e) In cases of doubt as to the classification of an employee, the board of
56	56	trustees shall determine from objective criteria whether an employee is properly
57	57	classified.
58	58	(f) Any retiree who accepts part-time employment with an employer participating
59	59	in the retirement system will be considered as restored to employment within the
60	60	meaning of chapter 36, part 8 of this title, regardless of whether the retiree is eligible for
61	61	membership.
62	62	SECTION 4. Tennessee Code Annotated, Section 8-35-109, is amended by deleting the
63	63	section and substituting:
64	64	(a) Except as provided in § 8-35-123(c), any person who assumes office as a
65	65	state judge, a county judge, a county official, a commissioner, a county chair, a member
66	66
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69	69
70	70	of the general assembly, or any district attorney general and any assistant thereto by
71	71	whatever name called, on or after July 1, 2025, shall become a member of the
72	72	retirement system as a condition of taking office or assuming a position.
73	73	(b) Any person who assumed office as a state judge, a county judge, a county
74	74	official, a commissioner, a county chair, a member of the general assembly, or any
75	75	district attorney general and any assistant thereto by whatever name called, prior to July
76	76	1, 2025, and made an irrevocable election to participate in the retirement system, shall
77	77	continue membership in the retirement system, as provided in chapters 34-37 of this
78	78	title.
79	79	SECTION 5. Tennessee Code Annotated, Section 8-35-110, is amended by deleting the
80	80	section and substituting:
81	81	(a) Except as provided in § 8-35-123(c), any person who becomes a member of
82	82	the general assembly on or after July 1, 2025, shall become a member of the retirement
83	83	system as a condition of taking office.
84	84	(b) Any person who became a member of the general assembly before July 1,
85	85	2025, and who made an irrevocable election to become a member of the retirement
86	86	system shall continue membership in the retirement system, as authorized by the
87	87	employer and chapters 34-37 of this title.
88	88	SECTION 6. Tennessee Code Annotated, Section 8-35-111(b), is amended by deleting
89	89	the subsection and substituting:
90	90	(b) As used in this section, "public employee retirement system" includes any
91	91	political subdivision retirement system, but does not include the following:
92	92	(1) The Social Security Act (42 U.S.C. §§ 301-1397f) or another federal
93	93	retirement program;
94	94	(2) A local retirement system as provided for in part 3 of this chapter;
95	95
96	96
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99	99	(3) A deferred compensation plan, including, but not limited to, plans
100	100	established pursuant to §§ 401(k), 403(b), 457(b), and 457(f) of the Internal
101	101	Revenue Code (26 U.S.C. §§ 401(k), 403(b), 457(b), and 457(f)); or
102	102	(4) A defined benefit pension plan established and maintained by a local
103	103	government employer that is supplemental to the employer's participation in the
104	104	retirement system, and was established prior to May 17, 2023, where the total
105	105	combined employer and employee contributions do not exceed seven percent
106	106	(7%) of the employee's salary, and the supplemental benefits are subject to the
107	107	limitations set forth in § 8-36-102. At the request of the retirement system, the
108	108	local government shall conduct a periodic audit using an auditing or accounting
109	109	firm to demonstrate compliance with the limitations set forth in § 8-36-102 and
110	110	any applicable limitation pursuant to federal law, regulation, or ruling, with the
111	111	cost of the audit to be paid by the local government.
112	112	SECTION 7. Tennessee Code Annotated, Section 8-35-111, is amended by adding the
113	113	following new, appropriately designated subsection:
114	114	(h) All tax-deferred retirement plans established by public employers
115	115	participating in the state retirement system, wherein employer contributions are made,
116	116	must be approved by the director of the state retirement system.
117	117	SECTION 8. Tennessee Code Annotated, Section 8-35-113(c)(1), is amended by
118	118	deleting the subdivision and substituting:
119	119	(1) Members or former members of the state election commission with a
120	120	minimum of five (5) years of service on such commission are eligible for membership in
121	121	the Tennessee consolidated retirement system if the member assumes office prior to
122	122	July 1, 2025, and shall become a member in the retirement system, as a condition of
123	123	employment, if the member assumes office on or after July 1, 2025; except that
124	124
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128	128	retirement benefits of such members must be based on the Group 1 benefit formula as
129	129	defined by § 8-36-206(1)(A) and not on the minimum retirement allowance provided for
130	130	in § 8-36-209. This service is independent of all other creditable service for the purpose
131	131	of calculation of the average final compensation. Such benefits are subject to the
132	132	limitations of § 8-36-102.
133	133	SECTION 9. Tennessee Code Annotated, Section 8-35-116, is amended by deleting the
134	134	section and substituting:
135	135	(a) Notwithstanding another law to the contrary, a full-time employee assuming
136	136	office as a county official or county judge, as defined in § 8-34-101, on or after July 1,
137	137	2025, shall become a member of the Tennessee consolidated retirement system as a
138	138	condition of taking office, and shall participate in the same manner, making and
139	139	receiving the same contributions, and is eligible for the same benefits, as other
140	140	employees of the county, if the county in which the county official or county judge is
141	141	employed is participating in the retirement system in accordance with part 2 of this
142	142	chapter.
143	143	(b) Full-time employees in the positions of county judge and county officials, as
144	144	defined in § 8-34-101, who took office between June 30, 1981, and June 30, 2025, and
145	145	made an irrevocable election to participate in the retirement system shall continue their
146	146	participation in the retirement system, as authorized by the county's governing body and
147	147	chapters 34-37 of this title.
148	148	(c) Notwithstanding subsection (b), any county official or county judge who takes
149	149	office on or after July 1, 2018, shall become a member of the Tennessee consolidated
150	150	retirement system as a condition of taking office if the county official or county judge is a
151	151	current or former member of the retirement system. This subsection (c) does not apply if
152	152	the county official or county judge was in office as a county official or county judge with
153	153
154	154
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156	156
157	157	the county on the date the county elected to participate in the retirement system, unless
158	158	the county official or county judge was a member or former member of a closed
159	159	preexisting defined benefit plan maintained by that county.
160	160	(d) The retirement system is not liable for the payment of retirement allowances
161	161	or other payments for a local government's employees or beneficiaries, for which
162	162	reserves have not been previously created from funds contributed by the local
163	163	government or its employees. It is the legislative intent that the state realizes no
164	164	increased cost as a result of this section or the local government's participation in the
165	165	retirement system pursuant to part 2 of this chapter. All costs associated with retirement
166	166	coverage, including administrative costs, are the responsibility of the local government.
167	167	SECTION 10. Tennessee Code Annotated, Section 8-35-123, is amended by deleting
168	168	the section and substituting:
169	169	(a) Any person participating in the Tennessee consolidated retirement system
170	170	prior to July 1, 2025, pursuant to §§ 8-35-101, 8-35-103, 8-35-115, 8-35-116, and 8-35-
171	171	226, or as a state judge, county judge, county official, commissioner, county chair or
172	172	attorney general, and who elected to become a member of the retirement system, shall
173	173	continue to participate in the retirement system under the member's irrevocable election.
174	174	Such members are subject to the same terms and conditions applicable to members
175	175	whose participation is mandatory under this title, as may be amended through an
176	176	enactment of the general assembly.
177	177	(b) Except as provided in subsection (c), any person employed or assuming
178	178	office on or after July 1, 2025, pursuant to §§ 8-35-101, 8-35-103, 8-35-115, 8-35-116,
179	179	and 8-35-226, or as a state judge, county judge, county official, commissioner, county
180	180	chair, or attorney general whose membership was otherwise optional in the retirement
181	181	system, shall become a member of the retirement system as a condition of employment.
182	182
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186	186	(c) A person whose membership was otherwise optional in the retirement
187	187	system and who was employed or holding office prior to July 1, 2025, as a state judge,
188	188	county judge, county official, commissioner, county chair, attorney general, or general
189	189	assembly member, and made an irrevocable election to not participate in the retirement
190	190	system shall maintain that election if, with or without interruption in service, the member
191	191	is:
192	192	(1) Reappointed or reelected to the same position after June 30, 2025; or
193	193	(2) Appointed or elected to a new position listed in this subsection (c)
194	194	after June 30, 2025.
195	195	(d) The retirement system is not liable for the payment of retirement allowances
196	196	or other payments on account of the employees or beneficiaries of any employer
197	197	participating under part 2 of this chapter for which reserves have not been previously
198	198	created from funds contributed by the employer or its employees. It is the legislative
199	199	intent that the state realizes no increased cost as a result of this section. All costs
200	200	associated with retirement coverage, including administrative costs, are the
201	201	responsibility of the respective employer.
202	202	SECTION 11. Tennessee Code Annotated, Section 8-35-226(a), is amended by
203	203	deleting the subsection and substituting:
204	204	(a) Appointed or elected school board members of special school districts, and
205	205	of city or county boards, commissions, committees, councils, and the like, by whatever
206	206	name known, who are elected by popular vote, and whose duties are performed
207	207	intermittently or periodically for the purposes of fixing rates, issuing permits or licenses,
208	208	regulating trades or professions, or who serve in an advisory, study or planning capacity
209	209	and the like are eligible for membership in the retirement system if the board member
210	210	assumes office prior to July 1, 2025, and shall become a member in the retirement
211	211
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214	214
215	215	system if the board member assumes office on or after July 1, 2025, assuming the
216	216	employer allows participation upon satisfying the following:
217	217	(1) The chief legislative body of the city, special school district, or county
218	218	passes a resolution approved by a two-thirds (2/3) majority authorizing
219	219	membership for such employees and accepting the liability therefor;
220	220	(2) Upon such authorization and assumption of the employer liability, any
221	221	such employee who meets the requirements of § 8-35-203(a)(2)(A) and (B) are
222	222	eligible to establish retirement credit for such periods of previous service as
223	223	authorized for other employees of the city, special school district, or county;
224	224	(3) An employee establishing such prior service shall make a lump sum
225	225	payment equal to the employee contributions the employee would have made
226	226	had the employee been a member of the system during the period claimed, plus
227	227	interest at the rate provided in § 8-37-214; and
228	228	(4) Membership in the retirement system pursuant to this section is
229	229	permitted only if the chief legislative body that has authorized retirement
230	230	participation for its departments or instrumentalities extends such coverage to all
231	231	nonparticipating departments and instrumentalities. If such option is elected,
232	232	then the remaining departments and instrumentalities shall participate under the
233	233	conditions of § 8-35-201.
234	234	SECTION 12. Tennessee Code Annotated, Section 8-35-234, is amended by deleting
235	235	the section and substituting:
236	236	(a) Notwithstanding another law to the contrary, a full-time employee serving as
237	237	a city judge or city attorney for a municipality on or after July 1, 2025, shall become a
238	238	member of the Tennessee consolidated retirement system as a condition of
239	239	employment, and shall participate in the same manner, making the same contributions,
240	240
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243	243
244	244	and is eligible for the same benefits, as other employees of the municipality, if the
245	245	municipality in which the city judge or city attorney is employed is participating in the
246	246	retirement system in accordance with part 2 of this chapter.
247	247	(b) The city judges and city attorneys participating in the retirement system
248	248	separately from other municipal employees prior to July 1, 2025, shall continue their
249	249	participation in the retirement system, as authorized by the municipality's governing body
250	250	and chapters 34-37 of this title.
251	251	(c) The retirement system is not liable for the payment of retirement allowances
252	252	or other payments for a local government's employees or beneficiaries, for which
253	253	reserves have not been previously created from funds contributed by the local
254	254	government or its employees. It is the legislative intent that the state realizes no
255	255	increased cost as a result of this section or the local government's participation in the
256	256	retirement system pursuant to part 2 of this chapter. All costs associated with retirement
257	257	coverage, including administrative costs, are the responsibility of the local government.
258	258	SECTION 13. Tennessee Code Annotated, Section 8-35-237, is amended by deleting
259	259	the section and substituting:
260	260	(a) Notwithstanding another law to the contrary, a full-time employee assuming
261	261	office as an elected purchasing agent or appointed administrator of elections for an
262	262	employer on or after July 1, 2025, shall participate in the Tennessee consolidated
263	263	retirement system in the same manner, making the same contributions and is eligible for
264	264	the same benefits as the employer's other employees, if the employer in which the
265	265	purchasing agent or administrator of elections is employed is participating in the
266	266	retirement system in accordance with part 2 of this chapter.
267	267	(b) The purchasing agents and administrator of elections participating in the
268	268	retirement system separately from other county employees prior to July 1, 2025 through
269	269
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273	273	an irrevocable election to participate in the retirement system, shall continue their
274	274	participation in the retirement system as authorized by the county's governing body and
275	275	chapters 34-37 of this title.
276	276	(c) The retirement system is not liable for the payment of retirement allowance or
277	277	other payments for a local government's employees or beneficiaries, for which reserves
278	278	have not been previously created from funds contributed by the local government or its
279	279	employees. It is the legislative intent that the state realizes no increased cost as a result
280	280	of this section or the local government's participation in the retirement system pursuant
281	281	to part 2 of this chapter. All costs associated with retirement coverage, including
282	282	administrative costs, are the responsibility of the local government.
283	283	SECTION 14. Tennessee Code Annotated, Section 8-35-256(a)(2), is amended by
284	284	deleting the subdivision and substituting:
285	285	(2) A political subdivision that adopts the hybrid plan authorized in this section
286	286	may make employer contributions to the defined contribution plan component of the
287	287	hybrid plan pursuant to § 8-36-916 and to any one (1) or more additional tax-deferred
288	288	compensation plans established pursuant to §§ 401(k), 403(b), 457(b), and 457(f) of the
289	289	Internal Revenue Code (26 U.S.C. §§ 401(k), 403(b), 457(b), and 457(f)), and subject to
290	290	the limitations in the Internal Revenue Code.
291	291	SECTION 15. Tennessee Code Annotated, Section 8-36-116, is amended by deleting
292	292	the section and substituting:
293	293	(a) It is the intent of the general assembly to recover amounts that have been
294	294	overpaid in error to members, beneficiaries, or persons who are not entitled to receive
295	295	the payment or payments.
296	296	(b) These overpayments may be recovered through any one (1) or more
297	297	methods, including, but are not limited to, the following:
298	298
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302	302	(1) A bank reclamation of the overpaid amount;
303	303	(2) A benefit reduction from a member's or beneficiary's benefit, which
304	304	amount must be determined based on facts and circumstances. The benefit
305	305	reduction may occur by:
306	306	(A) Reducing the monthly benefit payment to the member or
307	307	beneficiary for as many months as necessary to recover the
308	308	overpayment; or
309	309	(B) Reducing the monthly benefit payment to the member or
310	310	beneficiary by an amount actuarially determined to be adequate to
311	311	recover the overpayment during the period the monthly benefit payment
312	312	will be made to the member or beneficiary;
313	313	(3) A payroll deduction in the event the member returns to service with
314	314	an employer participating in the retirement system. The employer shall comply
315	315	with the retirement system's request for a payroll deduction;
316	316	(4) A promissory note or other documentation obligating the repayment
317	317	of the overpaid amount;
318	318	(5) A collection agency;
319	319	(6) Filing a claim against the estate of the person overpaid;
320	320	(7) Legal action; or
321	321	(8) Any other methods approved by the state treasurer.
322	322	(c) Consistent with the board's duty as a fiduciary to the fund and guidance
323	323	issued by the United States treasury, and notwithstanding this section or another law or
324	324	rule to the contrary, including the Uniform Administrative Procedures Act, compiled in
325	325	title 4, chapter 5, the retirement system may establish and implement policies and
326	326	procedures to waive recovery of the overpayment, with the exception of an overpayment
327	327
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331	331	caused by a failure to observe any limitation imposed by 26 U.S.C. §§ 401(a)(17) and
332	332	415.
333	333	SECTION 16. Tennessee Code Annotated, Section 8-36-203(3), is amended by
334	334	deleting the subsection and substituting it with:
335	335	(3) Distribution of a member's benefit must begin with the required beginning
336	336	date, which is April 1 of the calendar year following the calendar year in which the
337	337	member attains seventy and one-half (70.5) years of age or seventy-two (72) years of
338	338	age if the member was born on or after July 1, 1949, as such age is extended or
339	339	otherwise modified by the Internal Revenue Code or the regulations promulgated
340	340	thereunder, or April 1 of the calendar year following the calendar year in which the
341	341	member terminates, whichever is later. If a member fails to apply for retirement benefits
342	342	by the later of either of those dates, then the retirement system shall begin distribution of
343	343	the benefit, assuming the member did not select a retirement allowance of equivalent
344	344	actuarial value in favor of a beneficiary under one (1) of the options named in § 8-36-
345	345	601(b); and
346	346	SECTION 17. Tennessee Code Annotated, Section 8-36-601(b), is amended by adding
347	347	the following new subdivisions:
348	348	(5) Option 5. A reduced retirement allowance payable during the retired
349	349	member's life, with the provision that it must continue after the member's death at seven
350	350	tenths (0.7) the rate paid to the member and be paid for the life of, and to, the
351	351	beneficiary nominated by the member by written designation duly acknowledged and
352	352	filed with the board of trustees at the time of retirement.
353	353	(6) Option 6. A reduced retirement allowance payable during the retired
354	354	member's life, with the provision that it must continue after the member's death at seven
355	355	tenths (0.7) the rate paid to the member and be paid for the life of, and to, the
356	356
357	357
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360	360	beneficiary nominated by the member by written designation duly acknowledged and
361	361	filed with the board of trustees at the time of retirement; provided, that if the designated
362	362	beneficiary predeceases the retired member, then the retirement allowance payable to
363	363	the member after death of the designated beneficiary must be equal to the retirement
364	364	allowance that would have been payable had the member not elected an option.
365	365	SECTION 18. Tennessee Code Annotated, Section 8-36-606, is amended by deleting
366	366	the section and substituting:
367	367	(a) A retired member who has not selected an optional retirement allowance
368	368	under § 8-36-601(b) may change the retiree's designated beneficiary at any time;
369	369	provided, that the change is in writing, duly executed and filed with the retirement
370	370	system.
371	371	(b) The election of a designated beneficiary under an optional retirement
372	372	allowance as provided in § 8-36-601(b) must not be canceled or changed by the retiree
373	373	after the retiree's effective date of retirement except as provided in subsections (c)-(f).
374	374	(c) After a retired member's effective date of retirement or such later time as may
375	375	be provided in rules adopted by the board of trustees, the retiree may cancel the retiree's
376	376	designated beneficiary because of the death of the beneficiary or the retiree's divorce
377	377	from the designated beneficiary, upon the written request of the retiree. If the retiree
378	378	designated multiple beneficiaries, then the portion of the benefit payment that was
379	379	payable to the cancelled beneficiary must not be distributed or redistributed to the
380	380	remaining beneficiaries. The retiree shall provide the retirement system with the
381	381	completed and signed written cancellation request accompanied by either of the
382	382	following, whichever is applicable:
383	383	(1) A copy of the marital dissolution agreement and final decree of
384	384	divorce or annulment to confirm that the cancellation is not in conflict with the
385	385
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389	389	marital dissolution agreement or decree. If the requested cancellation conflicts
390	390	with the marital dissolution or decree, then the cancellation request must not be
391	391	honored; or
392	392	(2) A copy of the designated beneficiary's death certificate.
393	393	(d) If a retired member cancels the retiree's designated beneficiary pursuant to
394	394	subsection (c), then the retiree may:
395	395	(1) Designate a new beneficiary; provided, however, that upon the
396	396	retiree's death, the newly designated beneficiary is only entitled to the remaining
397	397	accumulated contributions in the retiree's account, if any, and to the last
398	398	retirement allowance payable in the month of the retiree's death. The retirement
399	399	allowance payable to the retired member after the cancellation of the designated
400	400	beneficiary pursuant to this section is not affected by the cancellation of the
401	401	beneficiary designation; or
402	402	(2) If the retiree selected only one (1) individual as the retiree's
403	403	beneficiary, designate the retiree's spouse as the member's sole, new
404	404	designated beneficiary, resulting in a reannuitization of the member's benefit.
405	405	(e) If the retiree elects to reannuitize pursuant to subdivision (d)(2), then the
406	406	retiree shall submit an application to reannuitize to the retirement system after the retired
407	407	member's marriage to the proposed new beneficiary, and provide the retirement system
408	408	with the marriage certificate demonstrating the marriage between the retiree and the
409	409	proposed new beneficiary.
410	410	(f) Upon receiving a completed application, the retirement system shall process
411	411	the reannuitization of the retiree's retirement benefit pursuant to the option selected by
412	412	the retiree on the retiree's effective date of retirement. The value of the new joint and
413	413	survivor annuity must be the actuarial equivalent of the retiree's benefit prospectively, in
414	414
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417	417
418	418	effect at the time the new annuity is elected. The benefit must be reduced based on the
419	419	ages of the retiree and the new beneficiary at the time of the change. The change in
420	420	beneficiary must become effective in the month following the month that the retirement
421	421	system approves the change in beneficiary.
422	422	SECTION 19. Tennessee Code Annotated, Section 8-36-903(c), is amended by
423	423	deleting the subsection and substituting:
424	424	(c)
425	425	(1) Except as provided in subdivisions (c)(2) and (c)(6), membership in
426	426	the hybrid plan or the optional retirement program, as applicable, is not required
427	427	for any part-time state employee or part-time teacher who would otherwise be
428	428	covered under this part, or for any state employee who had optional membership
429	429	in the retirement system pursuant to chapters 34-37 of this title prior to July 1,
430	430	2025.
431	431	(2) Notwithstanding another law to the contrary, and except as provided
432	432	in this subdivision (c)(2) and subdivision (c)(6), any person who becomes a part-
433	433	time state employee or a part-time teacher on or after July 1, 2016, but prior to
434	434	July 1, 2025, and who otherwise would be covered under this part, shall, upon
435	435	initial date of hire, file an irrevocable election to become or not to become a
436	436	participant in the hybrid plan or in the optional retirement program described in §
437	437	8-36-923, as applicable. Any person serving as a part-time state employee or
438	438	part-time teacher on June 30, 2016, but prior to July 1, 2025, and who otherwise
439	439	would be covered under this part, but who did not elect to participate in the hybrid
440	440	plan or in the optional retirement program described in § 8-36-923, shall, by no
441	441	later than October 31, 2016, file an irrevocable election to become or not to
442	442	become a participant in the hybrid plan or in the optional retirement program
443	443
444	444
445	445	- 16 - 001969
446	446
447	447	described in § 8-36-923, as applicable. This subdivision (c)(2) does not prohibit
448	448	an eligible employee from making the elections authorized in chapter 25, part 2
449	449	of this title. Any person who becomes a part-time state employee or a part-time
450	450	teacher on or after July 1, 2025, shall become a member of the retirement
451	451	system as a condition of taking office or assuming a position.
452	452	(3) Notwithstanding this subsection (c), § 8-35-109, or another law to the
453	453	contrary, any person who becomes a state judge, district attorney general, or
454	454	member of the general assembly on or after July 1, 2016, but prior to July 1,
455	455	2025, and who has not otherwise maintained membership in the retirement
456	456	system based on previous service as a state employee or teacher, shall, upon
457	457	the initial date of taking office, file an irrevocable election to become or not to
458	458	become a participant in the hybrid plan. A person serving as a state judge,
459	459	district attorney general, or member of the general assembly on June 30, 2016,
460	460	and who is not a participant in the hybrid plan or who has not otherwise
461	461	maintained membership in the retirement system based on previous service as a
462	462	state employee or teacher, shall, by no later than October 31, 2016, file an
463	463	irrevocable election to become or not to become a participant in the hybrid plan.
464	464	Notwithstanding this subdivision (c)(3), any person who assumes office as a
465	465	state judge, district attorney general, or member of the general assembly, on or
466	466	after July 1, 2025, shall become a member of the retirement system as a
467	467	condition of taking office or assuming a position.
468	468	(4) Notwithstanding another law to the contrary and except as provided in
469	469	this subdivision (c)(4) and subdivision (c)(6), any member of the state election
470	470	commission who has not otherwise maintained membership in the retirement
471	471	system based on previous service as a state employee or teacher, shall, on the
472	472
473	473
474	474	- 17 - 001969
475	475
476	476	first day following completion of five (5) years of service on the commission, file
477	477	an irrevocable election to become or not to become a participant in the hybrid
478	478	plan. Any member of the state election commission who has completed a
479	479	minimum of five (5) years of service on the commission as of June 30, 2016, and
480	480	who is not a participant in the hybrid plan or who has not otherwise maintained
481	481	membership in the retirement system based on previous service as a state
482	482	employee or teacher, shall, by no later than October 31, 2016, file an irrevocable
483	483	election to become or not to become a participant in the hybrid plan.
484	484	Notwithstanding this subdivision (c)(4), any person who assumes office as a
485	485	member of the state election commission on or after July 1, 2025, shall become a
486	486	member of the retirement system as a condition of taking office or assuming a
487	487	position.
488	488	(5) The elections provided for in this subsection (c) must be made in the
489	489	manner prescribed by the retirement system and must be filed with the retirement
490	490	system. The elections provided for in this subsection (c) do not include any
491	491	option for the employee to have a cash or deferred election right with respect to
492	492	designated employee contributions, and the employee contributions must be
493	493	picked up in accordance with § 8-36-904(b).
494	494	(6) Notwithstanding this subsection (c), any current or former member of
495	495	the retirement system or of a superseded system who accepts, or is elected to, a
496	496	position between July 1, 2018, and June 30, 2025, for which membership in the
497	497	hybrid plan was optional pursuant to this subsection (c) shall become a member
498	498	of the hybrid plan as a condition of employment. This subdivision (c)(6) does not
499	499	apply to retired members of the retirement system or of a superseded system
500	500
501	501
502	502	- 18 - 001969
503	503
504	504	who return to service in a position covered by the retirement system as provided
505	505	in § 8-36-805, § 8-36-809, § 8-36-810, § 8-36-818, § 8-36-820, or § 8-36-821.
506	506	SECTION 20. Tennessee Code Annotated, Section 8-36-916(c)(1), is amended by
507	507	deleting the subdivision and substituting:
508	508	(1) Each employer shall make a mandatory contribution to the defined
509	509	contribution component of the plan on behalf of each of its employees participating in the
510	510	hybrid plan, regardless of whether the employees make any employee contributions
511	511	pursuant to subsection (b). Employer contributions for kindergarten through twelve (K-
512	512	12) teachers must be paid by the respective local education agency for which the
513	513	teachers are employed. The amount of the contribution must be five percent (5%) of the
514	514	respective employee's salary. The mandatory contributions required in this subdivision
515	515	(c)(1) are in addition to any match provided for in § 8-25-303 to participants who
516	516	otherwise participate in a profit-sharing or salary reduction plan under chapter 25, part 3
517	517	of this title; provided, that the contributions conform to all applicable laws, rules, and
518	518	regulations of the internal revenue service governing profit sharing and salary reduction
519	519	plans for governmental employees.
520	520	SECTION 21. Tennessee Code Annotated, Section 8-36-919(a)(1)(B), is amended by
521	521	deleting the subdivision and substituting:
522	522	(B) Mandatory for all eligible employees entering the service of the political
523	523	subdivision thereafter; provided, however, and except as provided in subdivisions (a)(3)
524	524	and (4), membership is not required for any person who became a part-time employee
525	525	who would otherwise be covered under this part, or for any employee who has optional
526	526	membership in the retirement system pursuant to chapters 34-37 of this title. Any
527	527	election made by an employee to become a participant is irrevocable and such
528	528	employee is thereafter subject to the terms and conditions of the hybrid plan.
529	529
530	530
531	531	- 19 - 001969
532	532
533	533	SECTION 22. Tennessee Code Annotated, Section 8-36-919(a)(4), is amended by
534	534	adding the following language at the end of the subdivision:
535	535	Notwithstanding another law to the contrary, any person who becomes a part-time
536	536	employee on or after July 1, 2025, with a political subdivision participating in the hybrid
537	537	plan where the political subdivision authorized its part-time employees to participate in
538	538	the plan shall become a member of the retirement system as a condition of assuming
539	539	the position.
540	540	SECTION 23. Tennessee Code Annotated, Section 8-37-210(c), is amended by
541	541	deleting the language in the subsection and substituting:
542	542	(c) Distribution of a member's benefit must begin by the required beginning date,
543	543	which is April 1 of the calendar year following the calendar year in which the member
544	544	attains seventy and one-half (70.5) years of age or seventy-two (72) years of age if the
545	545	member was born on or after July 1, 1949, as such age is extended or otherwise
546	546	modified by the Internal Revenue Code or the regulations promulgated thereunder, or
547	547	April 1 of the calendar year following the calendar year in which the member terminates,
548	548	whichever is later. If a member fails to apply for retirement benefits by the later of either
549	549	of those dates, has been absent from service for more than seven (7) years after last
550	550	becoming a member, and has not completed the eligibility requirements for retirement as
551	551	set forth in § 8-36-204, then such person's accumulated contributions must be paid to
552	552	such person within ninety (90) days after the board is notified to that effect.
553	553	SECTION 24. Tennessee Code Annotated, Section 8-37-219(b)(3), is amended by
554	554	adding the following as a new subdivision:
555	555	(H) A SIMPLE IRA account described in § 408(p) of the Internal Revenue Code
556	556	(26 U.S.C. § 408(p)); provided, that the rollover is made two (2) years after the first
557	557	contribution is made to the member's SIMPLE IRA account;
558	558
559	559
560	560	- 20 - 001969
561	561
562	562	SECTION 25. This act takes effect upon becoming a law, the public welfare requiring it.