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
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
(1) There is established a hybrid plan which consists of a defined benefit plan with a defined contribution plan. The defined benefit plan shall offer a serviceretirement allowance of one percent (1.0%) of the member‘s average final compensation, multiplied by the number of years of creditable service. The defined contribution plan shall be a plan that conforms to all applicable laws, rules and regulations of the internal revenue service governing such plans, may be any plan selected by the political subdivision, and may be acquired from any source. Notwithstanding any law to the contrary, a political subdivision electing to participate in the hybrid plan authorized in this section shall provide a cost of living increase allowance pursuant to § 8-36-701(b).(2) Notwithstanding § 8-35-111 or another law to the contrary, 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 and to any one (1) or more additional tax deferred compensation or retirement plans; provided, that the total combined employer contributions to such defined contribution plans on behalf of an employee, with the exception of contributions made to a tax deferred retirement plan under § 457(f) of the Internal Revenue Code (26 U.S.C. § 457(f)), shall not exceed seven percent (7%) of the employee’s salary.(3) Notwithstanding this or any other law to the contrary, the amount of any employer matching shall not exceed the maximum allowed under the Internal Revenue Code (26 U.S.C.) and shall conform to all applicable laws, rules and regulations of the internal revenue service.(b) A political subdivision may, by resolution legally adopted and approved by the chief governing body and in accordance with the procedure set out in § 8-35-201, authorize its employees in all of its departments or instrumentalities to become eligible to participate in the hybrid plan.(c) Except as otherwise provided in this subsection (c), any member in the hybrid plan shall be eligible for service retirement upon attainment of sixty-five (65) years of age and upon completion of five (5) years of creditable service, or upon attainment of a combination of age and years of creditable service as to equal ninety (90). Any member serving in a position covered by the mandatory retirement provisions of § 8-36-205 shall be eligible for service retirement upon attainment of sixty (60) years of age and upon completion of five (5) years of creditable service, or at any age upon completion of thirty (30) years of creditable service. Further, any member who has creditable service in a position covered by the mandatory retirement provisions of § 8-36-205 and who is entitled to the supplemental bridge benefit established pursuant to § 8-36-211 shall be eligible for service retirement upon attainment of fifty-five (55) years of age and upon completion of twenty-five (25) years of creditable service; provided, that the service rendered while the member was in a position covered by the mandatory retirement provisions shall be independent of all other creditable service for the purpose of calculating the member’s retirement benefits under subsection (a). Section 8-36-211(b)(2) shall not apply in calculating the supplemental bridge benefit for members covered by the mandatory retirement provisions of § 8-36-205(a)(2) who retire on an early service retirement allowance pursuant to this subsection (c). Instead, the supplemental bridge benefit shall be equal to three-fourths of one percent (0.75%) of the member’s average final compensation, multiplied by the member’s years of creditable service when the member was in a position covered by the mandatory retirement provisions of § 8-36-205(a)(2), but reduced by an actuarially determined factor as set by the board from time to time.(d) Except as otherwise provided in this subsection (d), any member in the hybrid plan shall be eligible for early service retirement upon attainment of sixty (60) years of age with five (5) years of creditable service, or upon attainment of a combination of age and years of creditable service as to equal eighty (80). Any member serving in a position covered by the mandatory retirement provisions of § 8-36-205 shall be eligible for early service retirement upon attainment of fifty-five (55) years of age and upon completion of five (5) years of creditable service. The early service retirement allowance calculated under this subsection (d) shall be computed as a service retirement allowance in accordance with subsection (a) but reduced by an actuarially determined factor as set by the board from time to time.(e) Any member may apply for a disability retirement benefit pursuant to the provisions and criteria set forth in chapter 36, part 5 of this title. All provisions of chapter 36, part 5 of this title shall be applicable, except that the disability retirement allowance shall be equal to nine-tenths (9/10) of a service retirement allowance as computed in subsection (a) and as may be further reduced in accordance with chapter 36, part 5 of this title.(f) Any reference in chapters 34-37 of this title to the eligibility requirements for an early or service retirement allowance shall for purposes of this section mean the eligibility requirements set forth in subsections (c) and (d). Any reference in chapters 34-37 of this title to the formula for computing an early or service retirement allowance, or for computing a disability retirement allowance, shall for purposes of this section mean the applicable formula as set out in subsections (a), (d) or (e).(g) Sections 8-36-109(b)(1)(C) and 8-36-123(a)(2) shall not apply in determining the retirement allowance payable under § 8-36-109(b) or under § 8-36-123(a) to a deceased member’s surviving spouse, if any. Instead, the retirement allowance payable under such sections shall be reduced by an actuarially determined factor as set by the board from time to time.(h) In no event shall any member in this hybrid plan receive a base annual pension benefit of more than eighty thousand dollars ($80,000) beginning July 1, 2012. Each July 1 thereafter, this amount shall be increased or decreased in accordance with the consumer price index as defined in § 8-36-701(c), and the amount of increase or decrease shall be based on the prior calendar year. The member’s annual pension benefit shall be limited to the base benefit in effect at the time of the member’s retirement, but shall be subject to increase in accordance with the cost-of-living provisions of § 8-36-701(b)(1) and (2). Notwithstanding this subsection (h), the service retirement allowance payable under this section shall not exceed ninety percent (90%) of the member’s average final compensation, as may be adjusted by the cost-of-living provisions of § 8-36-701(b)(1) and (2).(i) A political subdivision electing to participate in the retirement system pursuant to this section shall participate in the provisions of the plan as they exist for state employees on the date of participation, except that §§ 8-36-123(b), 8-36-124, and 8-36-209 shall not apply and shall not be optional. Further, the provisions of the hybrid plan established under chapter 36, part 9 of this title shall not apply unless the political subdivision subsequently elects to participate in such plan on a prospective basis pursuant to § 8-36-919. Notwithstanding the foregoing, the following provisions shall remain optional to the political subdivision:
(1) Employee contributions as provided in § 8-35-203(a)(1)(B)(iii), § 8-35-254, or § 8-37-202, as applicable;(2) Part-time, seasonal, or temporary employee service credit in accordance with § 8-34-621;(3) Mandatory retirement in accordance with § 8-36-205.(j) Any member who desires to establish service credit pursuant to chapters 34-37 of this title shall pay employee contributions equal to the amount the member would have paid had such member been a member of the system during the period claimed, plus interest at the rate provided in § 8-37-214. Any such service shall be credited to the plan in existence at the time the service is established, provided such plan is with the political subdivision for which the service was rendered.
