HOUSE BILL 535
By Haston
SENATE BILL 510
By Walley
SB0510
001969
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AN ACT to amend Tennessee Code Annotated, Title 8,
Chapter 25; Title 8, Chapter 34; Title 8, Chapter
35; Title 8, Chapter 36 and Title 8, Chapter 37,
relative to retirement.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 8-25-303(a)(1), is amended by
deleting the second sentence in the subdivision and substituting:
Beginning on July 1, 2021, any such employer match must equal one hundred percent
(100%) of the amount contributed by each state employee to the plan per month, up to a
maximum of fifty dollars ($50.00) per month or, alternatively, up to a higher maximum
that may be specifically prescribed in the annual general appropriations act.
SECTION 2. Tennessee Code Annotated, Section 8-34-101(14)(D), is amended by
adding the following as a new subdivision:
(iv) Compensation paid as an offset of a tax liability or as a reimbursement of
any withholdings required by state or federal law;
SECTION 3. Tennessee Code Annotated, Section 8-35-103, is amended by deleting the
section and substituting:
(a) Any person who becomes a part-time state employee or a part-time teacher
on or after July 1, 2025, shall become a member of the retirement system as a condition
of employment. Any person who becomes a part-time employee on or after July 1,
2025, for an employer participating under part 2 of this chapter that allows part-time
employee participation in the retirement system shall become a member of the
retirement system as a condition of employment.
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(b) A person who became a part-time employee between July 1, 1984, and June
30, 2025, and made an irrevocable election to participate in the retirement system shall
continue participation in the retirement system, as provided in chapters 34-37 of this title.
(c) The following employees are not eligible for membership in the retirement
system:
(1) Students;
(2) Seasonal or temporary employees under twenty-five (25) years of
age;
(3) Temporary employees in institutions of higher education; or
(4) Substitute teachers, unless such substitutes are under contract and
scheduled to work the same time as a regular teacher.
(d) Part-time employees working in institutions of higher education are eligible
for membership in the optional retirement plan found in chapter 25, part 2 of this title if
the institution certifies that the employee is a teacher.
(e) In cases of doubt as to the classification of an employee, the board of
trustees shall determine from objective criteria whether an employee is properly
classified.
(f) Any retiree who accepts part-time employment with an employer participating
in the retirement system will be considered as restored to employment within the
meaning of chapter 36, part 8 of this title, regardless of whether the retiree is eligible for
membership.
SECTION 4. Tennessee Code Annotated, Section 8-35-109, is amended by deleting the
section and substituting:
(a) Except as provided in § 8-35-123(c), any person who assumes office as a
state judge, a county judge, a county official, a commissioner, a county chair, a member
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of the general assembly, or any district attorney general and any assistant thereto by
whatever name called, on or after July 1, 2025, shall become a member of the
retirement system as a condition of taking office or assuming a position.
(b) Any person who assumed office as a state judge, a county judge, a county
official, a commissioner, a county chair, a member of the general assembly, or any
district attorney general and any assistant thereto by whatever name called, prior to July
1, 2025, and made an irrevocable election to participate in the retirement system, shall
continue membership in the retirement system, as provided in chapters 34-37 of this
title.
SECTION 5. Tennessee Code Annotated, Section 8-35-110, is amended by deleting the
section and substituting:
(a) Except as provided in § 8-35-123(c), any person who becomes a member of
the general assembly on or after July 1, 2025, shall become a member of the retirement
system as a condition of taking office.
(b) Any person who became a member of the general assembly before July 1,
2025, and who made an irrevocable election to become a member of the retirement
system shall continue membership in the retirement system, as authorized by the
employer and chapters 34-37 of this title.
SECTION 6. Tennessee Code Annotated, Section 8-35-111(b), is amended by deleting
the subsection and substituting:
(b) As used in this section, "public employee retirement system" includes any
political subdivision retirement system, but does not include the following:
(1) The Social Security Act (42 U.S.C. §§ 301-1397f) or another federal
retirement program;
(2) A local retirement system as provided for in part 3 of this chapter;
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(3) A deferred compensation plan, including, but not limited to, plans
established pursuant to §§ 401(k), 403(b), 457(b), and 457(f) of the Internal
Revenue Code (26 U.S.C. §§ 401(k), 403(b), 457(b), and 457(f)); or
(4) A defined benefit pension plan established and maintained by a local
government employer that is supplemental to the employer's participation in the
retirement system, and was established prior to May 17, 2023, where the total
combined employer and employee contributions do not exceed seven percent
(7%) of the employee's salary, and the supplemental benefits are subject to the
limitations set forth in § 8-36-102. At the request of the retirement system, the
local government shall conduct a periodic audit using an auditing or accounting
firm to demonstrate compliance with the limitations set forth in § 8-36-102 and
any applicable limitation pursuant to federal law, regulation, or ruling, with the
cost of the audit to be paid by the local government.
SECTION 7. Tennessee Code Annotated, Section 8-35-111, is amended by adding the
following new, appropriately designated subsection:
(h) All tax-deferred retirement plans established by public employers
participating in the state retirement system, wherein employer contributions are made,
must be approved by the director of the state retirement system.
SECTION 8. Tennessee Code Annotated, Section 8-35-113(c)(1), is amended by
deleting the subdivision and substituting:
(1) Members or former members of the state election commission with a
minimum of five (5) years of service on such commission are eligible for membership in
the Tennessee consolidated retirement system if the member assumes office prior to
July 1, 2025, and shall become a member in the retirement system, as a condition of
employment, if the member assumes office on or after July 1, 2025; except that
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retirement benefits of such members must be based on the Group 1 benefit formula as
defined by § 8-36-206(1)(A) and not on the minimum retirement allowance provided for
in § 8-36-209. This service is independent of all other creditable service for the purpose
of calculation of the average final compensation. Such benefits are subject to the
limitations of § 8-36-102.
SECTION 9. Tennessee Code Annotated, Section 8-35-116, is amended by deleting the
section and substituting:
(a) Notwithstanding another law to the contrary, a full-time employee assuming
office as a county official or county judge, as defined in § 8-34-101, on or after July 1,
2025, shall become a member of the Tennessee consolidated retirement system as a
condition of taking office, and shall participate in the same manner, making and
receiving the same contributions, and is eligible for the same benefits, as other
employees of the county, if the county in which the county official or county judge is
employed is participating in the retirement system in accordance with part 2 of this
chapter.
(b) Full-time employees in the positions of county judge and county officials, as
defined in § 8-34-101, who took office between June 30, 1981, and June 30, 2025, and
made an irrevocable election to participate in the retirement system shall continue their
participation in the retirement system, as authorized by the county's governing body and
chapters 34-37 of this title.
(c) Notwithstanding subsection (b), any county official or county judge who takes
office on or after July 1, 2018, shall become a member of the Tennessee consolidated
retirement system as a condition of taking office if the county official or county judge is a
current or former member of the retirement system. This subsection (c) does not apply if
the county official or county judge was in office as a county official or county judge with
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the county on the date the county elected to participate in the retirement system, unless
the county official or county judge was a member or former member of a closed
preexisting defined benefit plan maintained by that county.
(d) The retirement system is not liable for the payment of retirement allowances
or other payments for a local government's employees or beneficiaries, for which
reserves have not been previously created from funds contributed by the local
government or its employees. It is the legislative intent that the state realizes no
increased cost as a result of this section or the local government's participation in the
retirement system pursuant to part 2 of this chapter. All costs associated with retirement
coverage, including administrative costs, are the responsibility of the local government.
SECTION 10. Tennessee Code Annotated, Section 8-35-123, is amended by deleting
the section and substituting:
(a) Any person participating in the Tennessee consolidated retirement system
prior to July 1, 2025, pursuant to §§ 8-35-101, 8-35-103, 8-35-115, 8-35-116, and 8-35-
226, or as a state judge, county judge, county official, commissioner, county chair or
attorney general, and who elected to become a member of the retirement system, shall
continue to participate in the retirement system under the member's irrevocable election.
Such members are subject to the same terms and conditions applicable to members
whose participation is mandatory under this title, as may be amended through an
enactment of the general assembly.
(b) Except as provided in subsection (c), any person employed or assuming
office on or after July 1, 2025, pursuant to §§ 8-35-101, 8-35-103, 8-35-115, 8-35-116,
and 8-35-226, or as a state judge, county judge, county official, commissioner, county
chair, or attorney general whose membership was otherwise optional in the retirement
system, shall become a member of the retirement system as a condition of employment.
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(c) A person whose membership was otherwise optional in the retirement
system and who was employed or holding office prior to July 1, 2025, as a state judge,
county judge, county official, commissioner, county chair, attorney general, or general
assembly member, and made an irrevocable election to not participate in the retirement
system shall maintain that election if, with or without interruption in service, the member
is:
(1) Reappointed or reelected to the same position after June 30, 2025; or
(2) Appointed or elected to a new position listed in this subsection (c)
after June 30, 2025.
(d) The retirement system is not liable for the payment of retirement allowances
or other payments on account of the employees or beneficiaries of any employer
participating under part 2 of this chapter for which reserves have not been previously
created from funds contributed by the employer or its employees. It is the legislative
intent that the state realizes no increased cost as a result of this section. All costs
associated with retirement coverage, including administrative costs, are the
responsibility of the respective employer.
SECTION 11. Tennessee Code Annotated, Section 8-35-226(a), is amended by
deleting the subsection and substituting:
(a) Appointed or elected school board members of special school districts, and
of city or county boards, commissions, committees, councils, and the like, by whatever
name known, who are elected by popular vote, and whose duties are performed
intermittently or periodically for the purposes of fixing rates, issuing permits or licenses,
regulating trades or professions, or who serve in an advisory, study or planning capacity
and the like are eligible for membership in the retirement system if the board member
assumes office prior to July 1, 2025, and shall become a member in the retirement
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system if the board member assumes office on or after July 1, 2025, assuming the
employer allows participation upon satisfying the following:
(1) The chief legislative body of the city, special school district, or county
passes a resolution approved by a two-thirds (2/3) majority authorizing
membership for such employees and accepting the liability therefor;
(2) Upon such authorization and assumption of the employer liability, any
such employee who meets the requirements of § 8-35-203(a)(2)(A) and (B) are
eligible to establish retirement credit for such periods of previous service as
authorized for other employees of the city, special school district, or county;
(3) An employee establishing such prior service shall make a lump sum
payment equal to the employee contributions the employee would have made
had the employee been a member of the system during the period claimed, plus
interest at the rate provided in § 8-37-214; and
(4) Membership in the retirement system pursuant to this section is
permitted only if the chief legislative body that has authorized retirement
participation for its departments or instrumentalities extends such coverage to all
nonparticipating departments and instrumentalities. If such option is elected,
then the remaining departments and instrumentalities shall participate under the
conditions of § 8-35-201.
SECTION 12. Tennessee Code Annotated, Section 8-35-234, is amended by deleting
the section and substituting:
(a) Notwithstanding another law to the contrary, a full-time employee serving as
a city judge or city attorney for a municipality on or after July 1, 2025, shall become a
member of the Tennessee consolidated retirement system as a condition of
employment, and shall participate in the same manner, making the same contributions,
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and is eligible for the same benefits, as other employees of the municipality, if the
municipality in which the city judge or city attorney is employed is participating in the
retirement system in accordance with part 2 of this chapter.
(b) The city judges and city attorneys participating in the retirement system
separately from other municipal employees prior to July 1, 2025, shall continue their
participation in the retirement system, as authorized by the municipality's governing body
and chapters 34-37 of this title.
(c) The retirement system is not liable for the payment of retirement allowances
or other payments for a local government's employees or beneficiaries, for which
reserves have not been previously created from funds contributed by the local
government or its employees. It is the legislative intent that the state realizes no
increased cost as a result of this section or the local government's participation in the
retirement system pursuant to part 2 of this chapter. All costs associated with retirement
coverage, including administrative costs, are the responsibility of the local government.
SECTION 13. Tennessee Code Annotated, Section 8-35-237, is amended by deleting
the section and substituting:
(a) Notwithstanding another law to the contrary, a full-time employee assuming
office as an elected purchasing agent or appointed administrator of elections for an
employer on or after July 1, 2025, shall participate in the Tennessee consolidated
retirement system in the same manner, making the same contributions and is eligible for
the same benefits as the employer's other employees, if the employer in which the
purchasing agent or administrator of elections is employed is participating in the
retirement system in accordance with part 2 of this chapter.
(b) The purchasing agents and administrator of elections participating in the
retirement system separately from other county employees prior to July 1, 2025 through
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an irrevocable election to participate in the retirement system, shall continue their
participation in the retirement system as authorized by the county's governing body and
chapters 34-37 of this title.
(c) The retirement system is not liable for the payment of retirement allowance or
other payments for a local government's employees or beneficiaries, for which reserves
have not been previously created from funds contributed by the local government or its
employees. It is the legislative intent that the state realizes no increased cost as a result
of this section or the local government's participation in the retirement system pursuant
to part 2 of this chapter. All costs associated with retirement coverage, including
administrative costs, are the responsibility of the local government.
SECTION 14. Tennessee Code Annotated, Section 8-35-256(a)(2), is amended by
deleting the subdivision and substituting:
(2) A political subdivision that adopts the hybrid plan authorized in this section
may make employer contributions to the defined contribution plan component of the
hybrid plan pursuant to § 8-36-916 and to any one (1) or more additional tax-deferred
compensation plans established pursuant to §§ 401(k), 403(b), 457(b), and 457(f) of the
Internal Revenue Code (26 U.S.C. §§ 401(k), 403(b), 457(b), and 457(f)), and subject to
the limitations in the Internal Revenue Code.
SECTION 15. Tennessee Code Annotated, Section 8-36-116, is amended by deleting
the section and substituting:
(a) It is the intent of the general assembly to recover amounts that have been
overpaid in error to members, beneficiaries, or persons who are not entitled to receive
the payment or payments.
(b) These overpayments may be recovered through any one (1) or more
methods, including, but are not limited to, the following:
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(1) A bank reclamation of the overpaid amount;
(2) A benefit reduction from a member's or beneficiary's benefit, which
amount must be determined based on facts and circumstances. The benefit
reduction may occur by:
(A) Reducing the monthly benefit payment to the member or
beneficiary for as many months as necessary to recover the
overpayment; or
(B) Reducing the monthly benefit payment to the member or
beneficiary by an amount actuarially determined to be adequate to
recover the overpayment during the period the monthly benefit payment
will be made to the member or beneficiary;
(3) A payroll deduction in the event the member returns to service with
an employer participating in the retirement system. The employer shall comply
with the retirement system's request for a payroll deduction;
(4) A promissory note or other documentation obligating the repayment
of the overpaid amount;
(5) A collection agency;
(6) Filing a claim against the estate of the person overpaid;
(7) Legal action; or
(8) Any other methods approved by the state treasurer.
(c) Consistent with the board's duty as a fiduciary to the fund and guidance
issued by the United States treasury, and notwithstanding this section or another law or
rule to the contrary, including the Uniform Administrative Procedures Act, compiled in
title 4, chapter 5, the retirement system may establish and implement policies and
procedures to waive recovery of the overpayment, with the exception of an overpayment
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caused by a failure to observe any limitation imposed by 26 U.S.C. §§ 401(a)(17) and
415.
SECTION 16. Tennessee Code Annotated, Section 8-36-203(3), is amended by
deleting the subsection and substituting it with:
(3) Distribution of a member's benefit must begin with the required beginning
date, which is April 1 of the calendar year following the calendar year in which the
member attains seventy and one-half (70.5) years of age or seventy-two (72) years of
age if the member was born on or after July 1, 1949, as such age is extended or
otherwise modified by the Internal Revenue Code or the regulations promulgated
thereunder, or April 1 of the calendar year following the calendar year in which the
member terminates, whichever is later. If a member fails to apply for retirement benefits
by the later of either of those dates, then the retirement system shall begin distribution of
the benefit, assuming the member did not select a retirement allowance of equivalent
actuarial value in favor of a beneficiary under one (1) of the options named in § 8-36-
601(b); and
SECTION 17. Tennessee Code Annotated, Section 8-36-601(b), is amended by adding
the following new subdivisions:
(5) Option 5. A reduced retirement allowance payable during the retired
member's life, with the provision that it must continue after the member's death at seven
tenths (0.7) the rate paid to the member and be paid for the life of, and to, the
beneficiary nominated by the member by written designation duly acknowledged and
filed with the board of trustees at the time of retirement.
(6) Option 6. A reduced retirement allowance payable during the retired
member's life, with the provision that it must continue after the member's death at seven
tenths (0.7) the rate paid to the member and be paid for the life of, and to, the
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beneficiary nominated by the member by written designation duly acknowledged and
filed with the board of trustees at the time of retirement; provided, that if the designated
beneficiary predeceases the retired member, then the retirement allowance payable to
the member after death of the designated beneficiary must be equal to the retirement
allowance that would have been payable had the member not elected an option.
SECTION 18. Tennessee Code Annotated, Section 8-36-606, is amended by deleting
the section and substituting:
(a) A retired member who has not selected an optional retirement allowance
under § 8-36-601(b) may change the retiree's designated beneficiary at any time;
provided, that the change is in writing, duly executed and filed with the retirement
system.
(b) The election of a designated beneficiary under an optional retirement
allowance as provided in § 8-36-601(b) must not be canceled or changed by the retiree
after the retiree's effective date of retirement except as provided in subsections (c)-(f).
(c) After a retired member's effective date of retirement or such later time as may
be provided in rules adopted by the board of trustees, the retiree may cancel the retiree's
designated beneficiary because of the death of the beneficiary or the retiree's divorce
from the designated beneficiary, upon the written request of the retiree. If the retiree
designated multiple beneficiaries, then the portion of the benefit payment that was
payable to the cancelled beneficiary must not be distributed or redistributed to the
remaining beneficiaries. The retiree shall provide the retirement system with the
completed and signed written cancellation request accompanied by either of the
following, whichever is applicable:
(1) A copy of the marital dissolution agreement and final decree of
divorce or annulment to confirm that the cancellation is not in conflict with the
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marital dissolution agreement or decree. If the requested cancellation conflicts
with the marital dissolution or decree, then the cancellation request must not be
honored; or
(2) A copy of the designated beneficiary's death certificate.
(d) If a retired member cancels the retiree's designated beneficiary pursuant to
subsection (c), then the retiree may:
(1) Designate a new beneficiary; provided, however, that upon the
retiree's death, the newly designated beneficiary is only entitled to the remaining
accumulated contributions in the retiree's account, if any, and to the last
retirement allowance payable in the month of the retiree's death. The retirement
allowance payable to the retired member after the cancellation of the designated
beneficiary pursuant to this section is not affected by the cancellation of the
beneficiary designation; or
(2) If the retiree selected only one (1) individual as the retiree's
beneficiary, designate the retiree's spouse as the member's sole, new
designated beneficiary, resulting in a reannuitization of the member's benefit.
(e) If the retiree elects to reannuitize pursuant to subdivision (d)(2), then the
retiree shall submit an application to reannuitize to the retirement system after the retired
member's marriage to the proposed new beneficiary, and provide the retirement system
with the marriage certificate demonstrating the marriage between the retiree and the
proposed new beneficiary.
(f) Upon receiving a completed application, the retirement system shall process
the reannuitization of the retiree's retirement benefit pursuant to the option selected by
the retiree on the retiree's effective date of retirement. The value of the new joint and
survivor annuity must be the actuarial equivalent of the retiree's benefit prospectively, in
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effect at the time the new annuity is elected. The benefit must be reduced based on the
ages of the retiree and the new beneficiary at the time of the change. The change in
beneficiary must become effective in the month following the month that the retirement
system approves the change in beneficiary.
SECTION 19. Tennessee Code Annotated, Section 8-36-903(c), is amended by
deleting the subsection and substituting:
(c)
(1) Except as provided in subdivisions (c)(2) and (c)(6), membership in
the hybrid plan or the optional retirement program, as applicable, is not required
for any part-time state employee or part-time teacher who would otherwise be
covered under this part, or for any state employee who had optional membership
in the retirement system pursuant to chapters 34-37 of this title prior to July 1,
2025.
(2) Notwithstanding another law to the contrary, and except as provided
in this subdivision (c)(2) and subdivision (c)(6), any person who becomes a part-
time state employee or a part-time teacher on or after July 1, 2016, but prior to
July 1, 2025, and who otherwise would be covered under this part, shall, upon
initial date of hire, file an irrevocable election to become or not to become a
participant in the hybrid plan or in the optional retirement program described in §
8-36-923, as applicable. Any person serving as a part-time state employee or
part-time teacher on June 30, 2016, but prior to July 1, 2025, and who otherwise
would be covered under this part, but who did not elect to participate in the hybrid
plan or in the optional retirement program described in § 8-36-923, shall, by no
later than October 31, 2016, file an irrevocable election to become or not to
become a participant in the hybrid plan or in the optional retirement program
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described in § 8-36-923, as applicable. This subdivision (c)(2) does not prohibit
an eligible employee from making the elections authorized in chapter 25, part 2
of this title. Any person who becomes a part-time state employee or a part-time
teacher on or after July 1, 2025, shall become a member of the retirement
system as a condition of taking office or assuming a position.
(3) Notwithstanding this subsection (c), § 8-35-109, or another law to the
contrary, any person who becomes a state judge, district attorney general, or
member of the general assembly on or after July 1, 2016, but prior to July 1,
2025, and who has not otherwise maintained membership in the retirement
system based on previous service as a state employee or teacher, shall, upon
the initial date of taking office, file an irrevocable election to become or not to
become a participant in the hybrid plan. A person serving as a state judge,
district attorney general, or member of the general assembly on June 30, 2016,
and who is not a participant in the hybrid plan or who has not otherwise
maintained membership in the retirement system based on previous service as a
state employee or teacher, shall, by no later than October 31, 2016, file an
irrevocable election to become or not to become a participant in the hybrid plan.
Notwithstanding this subdivision (c)(3), any person who assumes office as a
state judge, district attorney general, or member of the general assembly, on or
after July 1, 2025, shall become a member of the retirement system as a
condition of taking office or assuming a position.
(4) Notwithstanding another law to the contrary and except as provided in
this subdivision (c)(4) and subdivision (c)(6), any member of the state election
commission who has not otherwise maintained membership in the retirement
system based on previous service as a state employee or teacher, shall, on the
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first day following completion of five (5) years of service on the commission, file
an irrevocable election to become or not to become a participant in the hybrid
plan. Any member of the state election commission who has completed a
minimum of five (5) years of service on the commission as of June 30, 2016, and
who is not a participant in the hybrid plan or who has not otherwise maintained
membership in the retirement system based on previous service as a state
employee or teacher, shall, by no later than October 31, 2016, file an irrevocable
election to become or not to become a participant in the hybrid plan.
Notwithstanding this subdivision (c)(4), any person who assumes office as a
member of the state election commission on or after July 1, 2025, shall become a
member of the retirement system as a condition of taking office or assuming a
position.
(5) The elections provided for in this subsection (c) must be made in the
manner prescribed by the retirement system and must be filed with the retirement
system. The elections provided for in this subsection (c) do not include any
option for the employee to have a cash or deferred election right with respect to
designated employee contributions, and the employee contributions must be
picked up in accordance with § 8-36-904(b).
(6) Notwithstanding this subsection (c), any current or former member of
the retirement system or of a superseded system who accepts, or is elected to, a
position between July 1, 2018, and June 30, 2025, for which membership in the
hybrid plan was optional pursuant to this subsection (c) shall become a member
of the hybrid plan as a condition of employment. This subdivision (c)(6) does not
apply to retired members of the retirement system or of a superseded system
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who return to service in a position covered by the retirement system as provided
in § 8-36-805, § 8-36-809, § 8-36-810, § 8-36-818, § 8-36-820, or § 8-36-821.
SECTION 20. Tennessee Code Annotated, Section 8-36-916(c)(1), is amended by
deleting the subdivision and substituting:
(1) Each employer shall make a mandatory contribution to the defined
contribution component of the plan on behalf of each of its employees participating in the
hybrid plan, regardless of whether the employees make any employee contributions
pursuant to subsection (b). Employer contributions for kindergarten through twelve (K-
12) teachers must be paid by the respective local education agency for which the
teachers are employed. The amount of the contribution must be five percent (5%) of the
respective employee's salary. The mandatory contributions required in this subdivision
(c)(1) are in addition to any match provided for in § 8-25-303 to participants who
otherwise participate in a profit-sharing or salary reduction plan under chapter 25, part 3
of this title; provided, that the contributions conform to all applicable laws, rules, and
regulations of the internal revenue service governing profit sharing and salary reduction
plans for governmental employees.
SECTION 21. Tennessee Code Annotated, Section 8-36-919(a)(1)(B), is amended by
deleting the subdivision and substituting:
(B) Mandatory for all eligible employees entering the service of the political
subdivision thereafter; provided, however, and except as provided in subdivisions (a)(3)
and (4), membership is not required for any person who became a part-time employee
who would otherwise be covered under this part, or for any employee who has optional
membership in the retirement system pursuant to chapters 34-37 of this title. Any
election made by an employee to become a participant is irrevocable and such
employee is thereafter subject to the terms and conditions of the hybrid plan.
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SECTION 22. Tennessee Code Annotated, Section 8-36-919(a)(4), is amended by
adding the following language at the end of the subdivision:
Notwithstanding another law to the contrary, any person who becomes a part-time
employee on or after July 1, 2025, with a political subdivision participating in the hybrid
plan where the political subdivision authorized its part-time employees to participate in
the plan shall become a member of the retirement system as a condition of assuming
the position.
SECTION 23. Tennessee Code Annotated, Section 8-37-210(c), is amended by
deleting the language in the subsection and substituting:
(c) Distribution of a member's benefit must begin by the required beginning date,
which is April 1 of the calendar year following the calendar year in which the member
attains seventy and one-half (70.5) years of age or seventy-two (72) years of age if the
member was born on or after July 1, 1949, as such age is extended or otherwise
modified by the Internal Revenue Code or the regulations promulgated thereunder, or
April 1 of the calendar year following the calendar year in which the member terminates,
whichever is later. If a member fails to apply for retirement benefits by the later of either
of those dates, has been absent from service for more than seven (7) years after last
becoming a member, and has not completed the eligibility requirements for retirement as
set forth in § 8-36-204, then such person's accumulated contributions must be paid to
such person within ninety (90) days after the board is notified to that effect.
SECTION 24. Tennessee Code Annotated, Section 8-37-219(b)(3), is amended by
adding the following as a new subdivision:
(H) A SIMPLE IRA account described in § 408(p) of the Internal Revenue Code
(26 U.S.C. § 408(p)); provided, that the rollover is made two (2) years after the first
contribution is made to the member's SIMPLE IRA account;
- 20 - 001969
SECTION 25. This act takes effect upon becoming a law, the public welfare requiring it.