(a) The general assembly finds and declares that the public policy of this state is that no public official or employee shall have multiple memberships in any retirement program or programs financed from public funds, whereby such official or employee obtains or accrues pensions or retirement benefits based upon the same period of service to the state, or any branch, department, agency or institution thereof, or to any of its political subdivisions. This section shall be construed to implement this policy.
Terms Used In Tennessee Code 8-35-111
Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
Average final compensation: means the average annual earnable compensation of a member during the five (5) consecutive years of the member's creditable service affording the highest such average, or during all of the years in the member's creditable service if less than five (5) years. See Tennessee Code 8-34-101
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
Creditable service: means prior service plus membership service, as provided in part 6 of this chapter. See Tennessee Code 8-34-101
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
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
Member: means any person included in the membership of the retirement system, as provided in chapter 35, part 1 of this title. See Tennessee Code 8-34-101
Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
Retirement: means withdrawal from membership with a retirement allowance granted under chapters 34-37 of this title. See Tennessee Code 8-34-101
Retirement allowance: means the sum of the member annuity and the state annuity. See Tennessee Code 8-34-101
Retirement system: means the Tennessee consolidated retirement system as defined in §. See Tennessee Code 8-34-101
Service: means service as a general employee, a teacher, a state police officer, a wildlife officer, a firefighter, a police officer, a state judge, a county judge, an attorney general, a commissioner or a county official which is paid for by an employer, and also includes service for which a former member of the general assembly is entitled to under former §. See Tennessee Code 8-34-101
Superseded system: means , where applicable, the Tennessee state retirement system, the Tennessee teachers' retirement system, the Tennessee judges' retirement system, the retirement system for county paid judges of Tennessee, the attorneys general retirement system of Tennessee, the public service commissioners' retirement system, and the Tennessee retirement system for county officials, any one (1) of them, or any combination thereof. See Tennessee Code 8-34-101
(b) “Public employee retirement system,” as used in this section, includes any political subdivision retirement system, but does not include the following:
(1) The Social Security Act (42 U.S.C. §§ 301-1397f) or any other federal retirement program;(2) A local retirement system as provided for in part 3 of this chapter;(3)(A) Any tax deferred retirement plan wherein total combined employer contributions to such plans, other than those made pursuant to a salary reduction agreement, do not exceed three percent (3%) of the employee’s salary. Notwithstanding any other law to the contrary, an employer maintaining a tax deferred retirement plan shall not permit contributions to that plan which would exceed the limitations of the Internal Revenue Code (26 U.S.C.)(B) 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; 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 Tennessee consolidated 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 Tennessee consolidated 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.(5) A tax deferred retirement plan under§ 457(f) of the Internal Revenue Code (26 U.S.C. § 457(f)).(c) Except as provided in part 3 of this chapter, no person shall be eligible for membership in the consolidated retirement system if such person holds membership in any other public employee retirement system into which such person is making a contribution or accumulating creditable service based upon the same service that would entitle such person to membership in the consolidated retirement system; provided, that if such person receives compensation from two (2) or more governmental entities because of the statutory provisions of such person’s office, such person is eligible for membership in this system, with benefits based upon the proportion of such person’s compensation upon which contributions are not made to the other retirement system.(d) If any person is eligible for membership in more than one (1) state, county or municipal retirement program for the same service, such person shall, within sixty (60) days from June 30, 1975, select the retirement program in which the person will participate or be excluded from the state retirement system. When such person has made contributions into an additional retirement system from which the person elects to withdraw the person’s membership under this section, such person may, upon request, be reimbursed any contributions made by such person into the additional system, plus interest compounded annually in an amount to be determined by the board of trustees; provided, that if such person has received benefit payments in excess of such contributions, no reimbursement shall be made.(e)(1) Any member of more than one (1) superseded system shall be eligible for benefits in each such system, so long as such member’s benefits in each system are based upon the proportionate part of such member’s compensation received from the sources which qualified such member for such membership because of the statutory provisions of such member’s office, even though the services may have been simultaneous.(2) Such person shall be entitled to any unimpaired vested rights and benefits existing under such other system, but no period of time of such vested rights under another public employee retirement system shall be considered creditable service in the consolidated retirement system or any superseded system, except as provided in this section.(f) The total retirement allowances received by any person from multiple public employee retirement systems shall not exceed one hundred percent (100%) of the person’s average final compensation. This section shall not be construed to prevent any increase in such retirement allowance when such increase is in accordance with § 8-36-701.(g) The total retirement allowances of any teacher under part 3 of this chapter received from the local teachers’ retirement system and the state annuity received from the Tennessee consolidated retirement system shall not exceed one hundred percent (100%) of the teacher’s final average compensation. This section shall not be construed to prevent any increase in such retirement allowance when such increase is in accordance with § 8-36-701.
