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TennesseeSB 0510114th General Assembly (2025-2026)SenateWALLET

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.

Sponsored By: Page Walley (Republican)

Became Law

Pensions and Retirement Benefits

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Bill Overview

Analyzed Economic Effects

12 provisions identified: 5 benefits, 2 costs, 5 mixed.

More employer money in your retirement

Employers must put 5% of your salary into the hybrid plan’s defined‑contribution account. For K–12 teachers, the local education agency pays this 5%. Also, for state employees, the state matches your monthly contribution dollar for dollar up to $50 per month (or a higher cap set in the state budget), starting July 1, 2021.

New survivor options and beneficiary rules

You can pick Option 5 to take a smaller pension and leave 70% of it to your named beneficiary for life. Option 6 offers a similar joint‑and‑survivor choice, and if your beneficiary dies first, your payments revert to the single‑life amount. You can change beneficiaries freely before choosing an option. After retirement, you can change or cancel only if the beneficiary dies or after a divorce with required documents; reannuitization with a spouse needs an actuarial equivalent and starts the month after approval.

TCRS can collect benefit overpayments

If the system overpays you, it can recover the money by cutting future checks, bank reclamation, payroll deductions, promissory notes, using collection agencies, estate claims, or legal action. The board may set waiver policies, but it cannot waive recovery for overpayments tied to federal limits in sections 401(a)(17) and 415 of the Internal Revenue Code.

Local officials must join; locals pay costs

Full‑time county officials and county judges who take office on or after July 1, 2025 must join the system if their county participates, and the local government pays all retirement and admin costs. Full‑time city judges and city attorneys at participating municipalities must join starting July 1, 2025; the system is not liable for benefits without reserves. Full‑time elected purchasing agents and appointed election administrators at participating employers must also join, with prior irrevocable elections honored. School‑board members who take office on or after July 1, 2025 can join only if the local body passes a two‑thirds resolution accepting liability and extends coverage to all nonparticipating departments; to buy prior service, the member must pay a lump sum equal to employee contributions plus interest. Positions that used to be optional become mandatory for new hires on or after July 1, 2025.

Part-time public workers must join, or opt out

Beginning July 1, 2025, new part-time state employees and part-time teachers are enrolled in the retirement system unless they file a written, irrevocable opt-out within 30 days of their first work day. The same 30‑day opt‑out rule applies to part-time hires at participating local employers that allow part‑time participation. People who took certain jobs between July 1, 2018 and June 30, 2025 that used to be optional now become members. Students; seasonal or temporary workers under age 25; temporary higher‑education staff; and most substitute teachers are excluded.

Retirement now required for many officials

Starting July 1, 2025, people who take office as state judges, district attorneys general and assistants, county judges and officials, commissioners and county chairs, and members of the General Assembly must join the retirement system. State election commission members with five or more years of service are eligible, and those taking office on or after July 1, 2025 must join; benefits use the Group 1 formula. People who took office before July 1, 2025 and made prior irrevocable elections keep those elections.

State review and limits on local plans

Any tax‑deferred plan set up by a public employer that includes employer contributions must be approved by the state retirement director. Some local supplemental pension plans started before May 17, 2023 and funded at 7% of pay or less are excluded from public‑system rules, but the retirement system can require periodic audits at the local government’s expense.

Extra savings options and IRA rollovers

If your local government adopts the hybrid plan, it may also contribute to other tax‑deferred plans like 401(k), 403(b), 457(b), or 457(f), within IRS limits. You may roll a SIMPLE IRA into your account once two years have passed since the first contribution to that SIMPLE IRA.

Part-time college teachers can join plan

Part‑time higher‑education employees may join the optional retirement plan if the institution certifies they are a teacher. This gives certified part‑time teachers another retirement option.

When your retirement payments must start

Payments must begin by April 1 after the year you reach age 70½, or age 72 if you were born on or after July 1, 1949, or any later age the IRS sets. Payments must also start by April 1 after the year you leave service, whichever is later. If you do not apply by then, the system starts payments for you. If you have been away from service more than 7 years and are not eligible to retire, your contributions are paid to you within 90 days after the board is notified.

Returning retirees counted as re‑employed

If you are retired and take part‑time work with a participating employer, you are treated as restored to employment. This status can change or suspend your retirement payments under system rules.

More pay counts toward county pensions

For county offices, pay that offsets a tax bill or reimburses required withholdings now counts as compensation. This can raise what counts for retirement and payroll, which may increase both contributions and future benefits.

Sponsors & Cosponsors

Sponsor

  • Page Walley

    Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 132 • No: 0

House vote • 4/16/2025

FLOOR VOTE: REGULAR CALENDAR PASSAGE ON THIRD CONSIDERATION 4/16/2025

Yes: 93 • No: 0

Senate vote • 4/7/2025

FLOOR VOTE: as Amended Third Consideration 4/7/2025

Yes: 32 • No: 0

Senate vote • 4/1/2025

SENATE STATE & LOCAL GOVERNMENT COMMITTEE

Yes: 7 • No: 0

Actions Timeline

  1. Pub. Ch. 367

    5/13/2025

  2. Effective date(s) 05/05/2025

    5/13/2025

  3. Signed by Governor.

    5/5/2025Senate

  4. Transmitted to Governor for action.

    4/23/2025Senate

  5. Enrolled and ready for signatures

    4/22/2025Senate

  6. Signed by Senate Speaker

    4/22/2025Senate

  7. Signed by H. Speaker

    4/22/2025House

  8. Subst. for comp. HB.

    4/16/2025House

  9. Am. withdrawn. (Amendment 1 - HA0088)

    4/16/2025House

  10. Passed H., Ayes 93, Nays 0, PNV 0

    4/16/2025House

  11. Rcvd. from S., held on H. desk.

    4/9/2025House

  12. Senate adopted Amendment (Amendment 1 - SA0314)

    4/7/2025Senate

  13. Senate adopted Amendment (Amendment 2 - SA0316)

    4/7/2025Senate

  14. Passed Senate as amended, Ayes 32, Nays 0

    4/7/2025Senate

  15. Engrossed; ready for transmission to House

    4/7/2025Senate

  16. Placed on Senate Regular Calendar for 4/7/2025

    4/4/2025Senate

  17. Recommended for passage with amendment/s, refer to Senate Calendar Committee Ayes 7, Nays 0 PNV 0

    4/1/2025Senate

  18. Placed on Senate State and Local Government Committee calendar for 4/1/2025

    3/26/2025Senate

  19. Action deferred in Senate State and Local Government Committee to 4/1/2025

    3/25/2025Senate

  20. Placed on Senate State and Local Government Committee calendar for 3/25/2025

    3/19/2025Senate

  21. Action deferred in Senate State and Local Government Committee to 3/25/2025

    3/18/2025Senate

  22. Placed on Senate State and Local Government Committee calendar for 3/18/2025

    3/11/2025Senate

  23. Action deferred in Senate State and Local Government Committee to 3/18/2025

    3/4/2025Senate

  24. Placed on Senate State and Local Government Committee calendar for 3/4/2025

    2/25/2025Senate

  25. Passed on Second Consideration, refer to Senate State and Local Government Committee

    2/12/2025Senate

Bill Text

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