Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
Code: includes the Tennessee Code and all amendments and revisions to the code and all additions and supplements to the code. See Tennessee Code 1-3-105
Commissioner: means any person in office as a member of the public service commission, as prescribed by title 65, chapter 1, prior to June 30, 1996. See Tennessee Code 8-34-101
Contract: A legal written agreement that becomes binding when signed.
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Employer: means : (A) The state or any department, commission, institution, board or agency of the state government by which a member is paid, with respect to members in its employ. See Tennessee Code 8-34-101
Fiduciary: A trustee, executor, or administrator.
Internal Revenue Code: means the Internal Revenue Code of 1986, codified in United States Code, title 26, as amended. See Tennessee Code 8-34-101
Public school: means any school conducted within the state under the authority and supervision of a duly elected or appointed city or county school board, and any educational institution supported by and under the control of the state. See Tennessee Code 8-34-101
Retirement: means withdrawal from membership with a retirement allowance granted under chapters 34-37 of this title. See Tennessee Code 8-34-101
Retirement system: means the Tennessee consolidated retirement system as defined in §. See Tennessee Code 8-34-101
(1) The responsibility for implementing any deferred or tax-sheltered compensation plans maintained on behalf of employees of institutions of higher education pursuant to § 403(b) of the Internal Revenue Code (26 U.S.C. § 403(b)) shall be delegated to the chair of the board of trustees for the Tennessee consolidated retirement system with the approval of the remaining trustees. Through this delegation, the chair of the board of trustees for the Tennessee consolidated retirement system is authorized to establish the terms of the plans; offer investment options in accordance with the investment and administrative plan services approved by the trustees; complete the financial reporting and financial statements for the plans; assume the fiduciary duties for the plans; enter into contracts or agreements for the administration of the plans; carry out the day-to-day operations and responsibilities for the implementation of the plans, and any other duties not inconsistent with this chapter. The chair of the board of trustees for the Tennessee consolidated retirement system may assume responsibility for the implementation of any deferred or tax-sheltered compensation plans existing before or after March 16, 2018, that are maintained on behalf of employees of institutions of higher education or pursuant to § 403(b) of the Internal Revenue Code (26 U.S.C. § 403(b)).(2) The responsibility for implementing the deferred compensation program for employees of state agencies, including employees of institutions of higher education, shall be delegated to the chair of the board of trustees for the Tennessee consolidated retirement system, with the approval of the remaining trustees.(3) The responsibility for implementing the deferred compensation plan for state employees who are not paid on either the centralized state payroll system or by an institution of higher education, may be delegated as determined by the chair of the consolidated retirement board.(4)(A) Whenever plans are operated for state employees, including employees of institutions of higher education, pursuant to authority delegated herein to officials other than the chair of the consolidated retirement board, they shall be operated under the terms and conditions set out in contracts entered into by the chair of the consolidated retirement board for the purpose of effectuating this part.(B) [Deleted by 2018 amendment.](5) The responsibility for implementing the deferred compensation program for all other employees, as defined hereunder, shall be delegated to the appropriate officer, board, or committee, as designated by the local legislative body of such other agencies, counties or municipalities.(b) Payroll deductions shall be made, in each instance, by the appropriate payroll officer.(c) The chair of the consolidated retirement board or appropriately designated local officer, board or committee of such deferred compensation program may contract with a private corporation, institution and/or custodial bank to provide consolidated billing and all or any other administrative services deemed necessary or appropriate for the administration and operation of the program. The chair of the consolidated retirement board or appropriately designated local officer, board or committee of such deferred compensation program may assess the costs associated with administrating the program to the respective participating employees in order that any such plans adopted shall operate without cost to or contribution from this state.(d) Notwithstanding any law to the contrary, the chair of the consolidated retirement board, with the concurrence of the commissioner of finance and administration, has the authority to implement an automatic deferred or tax-sheltered compensation plan. Such plan shall provide that any person who becomes a full-time state employee on or after the implementation date of the plan, including a full-time employee of an institution of higher education, who is eligible to participate in one of the deferred or tax-sheltered compensation plans established pursuant to parts 1 or 3 of this chapter shall participate in at least one of the plans as a condition of employment, unless such employee files with that person’s employer a notice of that person’s election not to participate.(e) Any notice of non-election shall be made in such format and through such medium as prescribed by the chair of the Tennessee consolidated retirement system and must be filed with that employee’s employer by no later than thirty (30) calendar days from the date of the notice of automatic deferral letter. Any employee who does not file a notice of non-election within the prescribed period shall be automatically enrolled in the state’s salary reduction plan established in part 3 of this chapter with a salary deferral of two percent (2%) of that employee’s compensation. All contributions made by or on behalf of the employee shall be directed to such default option as shall be established by the chair of the consolidated retirement board until such time as the employee selects a different investment option or options. Notwithstanding this section or any other law to the contrary, future deferrals may be cancelled or adjusted at any time by the employee provided the employee notifies that employee’s employer in such format and through such medium as may be prescribed by the chair of the Tennessee consolidated retirement system at least one month before the payday on which the cancellation or change is to be effective; provided, however, that any adjustment in the deferrals, other than a cancellation, cannot cause the amount of the deferrals to be less than twenty dollars ($20.00) per month, or if the employee is paid twice a month, ten dollars ($10.00) semimonthly, or such other lower amount as may be established under chapter 25, part 3 of this title. In addition, any adjustment in the deferrals cannot cause the amount of the deferrals to exceed the maximum allowed under the Internal Revenue Code.(f)(1) Any employee who affirmatively declines to make employee deferrals after the first automatic enrollment contribution was made may make an election to withdraw that employee’s entire automatic enrollment contribution. This election must be submitted no later than ninety (90) calendar days after the payroll date in which the first automatic enrollment contribution is made on behalf of the employee. The amount of the distribution shall be the value of the automatic enrollment contributions plus or minus investment gains or losses as of the date the distribution is processed. Automatic enrollment contributions made after such date shall remain in the plan and shall be subject to the plan’s regular distribution rules. Further, an employee who has made an election to withdraw and who thereafter leaves employment and is then rehired by the same employer as defined in this subsection (f) or, by the same political subdivision in the case of a political subdivision employee, before a twelve-continuous month absence shall not be permitted to make another election to withdraw that participant’s automatic enrollment contribution.(2) For purposes of this subsection (f), “same employer” means the employer for which the person last worked prior to separation from covered employment. All departments, agencies and instrumentalities in the executive, legislative and judicial branches of state government, including public institutions of higher education, shall be deemed one and the same employer. All public schools within the Tennessee public school system, except for public institutions of higher education, shall be deemed one and the same employer.(3) Notwithstanding the vesting provisions of the plan’s document, the employer matching contributions described in § 8-25-303 that are attributable to the distribution of the automatic enrollment contributions shall be forfeited and placed in a forfeiture account. Amounts in the forfeiture account shall be used in the manner provided in the plan document established for the profit sharing and/or salary reduction plan established under chapter 25, part 3 of this title. The employer matching contributions described in § 8-25-303 shall not be made if a permissible withdrawal is taken pursuant to this subsection (f) before the date the matching contribution is allocated.(g) The initial two percent (2%) automatic enrollment contribution described in this section shall be subject to a percentage annual increase thereafter if provided for in the plan document established for the profit sharing and/or salary reduction plan established under chapter 25, part 3 of this title.(h) The automatic deferrals shall be contributed on a pre-tax basis and shall continue until the employee affirmatively elects otherwise.(i) Notwithstanding any law to the contrary, a political subdivision, or an instrumentality of a political subdivision that has at least one thousand (1,000) employees, may implement, adopt, or administer an automatic deferred or tax-sheltered compensation plan for employees of that political subdivision or instrumentality that constitutes an eligible automatic contribution arrangement under § 414(w) of the Internal Revenue Code of 1986, codified in 26 U.S.C. § 414(w). Such deferred or tax-sheltered compensation plan may provide, subject to the notice, election to withdraw, and other requirements of § 414(w) of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder, that employees or a classification of employees eligible to participate in the plan on or after implementation of the plan must participate in the plan as a condition of employment unless such covered employee files notice with the sponsoring employer indicating that person’s election not to participate in the manner and in the time period prescribed by the sponsoring employer.
