(a) As used in this section, unless the context clearly requires otherwise:
Terms Used In Tennessee Code 7-3-105
Amortization: Paying off a loan by regular installments.
Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
Metropolitan government: means the political entity created by consolidation of all, or substantially all, of the political and corporate functions of a county and a city or cities. See Tennessee Code 7-1-101
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
(1) “Metropolitan board of public education” means the local board of education of a metropolitan government, as defined in subdivision (a)(2);(2) “Metropolitan government” means any metropolitan government established under this title; and(3) “Superseded system” means any closed local city or county retirement plan, except “superseded system” does not include any retirement plan closed after June 30, 1994. “Superseded system” further means any closed city teacher retirement plan, closed county teacher plan or closed local teacher retirement plan in existence prior to June 23, 2000.(b)(1) The local legislative body of a metropolitan government, as defined in subdivision (a)(2), and its local board of education may adopt a guaranteed payment plan for pension liabilities as follows:
(A) Adoption of a guaranteed payment plan must be approved by an ordinance approved by a two-thirds (2/3) vote of the local legislative body of the metropolitan government and by resolution approved by a two-thirds (2/3) vote of the metropolitan board of public education; and(B) The guaranteed payment plan must cover all superseded systems of the metropolitan government and the metropolitan board of public education.(2) Funding obligations of the superseded system, including the funding of any unfunded accrued liabilities of the superseded system, shall be determined in a manner so as to amortize the funding obligations over a period of time established by the local legislative body, such period not to exceed thirty (30) years from the beginning of the fiscal year in which the guaranteed payment plan is adopted by the metropolitan government. Any benefit improvements granted by the superseded system shall be fully funded over the same amortization period established by this subsection (b). Appropriations made by the local legislative body to fund the obligations of the superseded system pursuant to this section may not be reduced by any year until all of the pension obligations of the superseded system are fully amortized.(3) The metropolitan board of public education shall fund in its annual budget the actuarial contribution attributable to the aggregate benefits of all teachers covered under the superseded systems established upon or after the establishment of the metropolitan government. The metropolitan government shall fund the actuarial contribution attributable to the aggregate benefits of all other superseded systems. The amounts necessary to fund such actuarial contributions shall be set forth in the annual budget adopted by the local legislative body.(c) A metropolitan government establishing a guaranteed payment plan for pension liabilities pursuant to this section shall establish a guaranteed payment account, which shall be separate and apart from the pension trust funds of any superseded system. All funds appropriated by the local legislative body for funding the obligation of the superseded system shall be directly transferred to the guaranteed payment account by the chief accountant of the metropolitan government or, in the absence of a chief accountant, the person who otherwise performs the duties of a chief accountant for a metropolitan government. The chief accountant shall transfer such amounts as may be necessary to pay the current benefit distributions of the superseded system to each respective system and shall transfer all remaining balances to the credit of the trust funds of the respective superseded systems in such amounts as are required to ensure that all liabilities are fully amortized as required by this section.
