AN ACT to amend Tennessee Code Annotated, Title 8, Chapter 34, Part 6, relative to creditable service for a period of disability.

Disability retirement credit for Tennessee public workers

Beginning July 1, 2026, eligible Tennessee retirement-system members can establish retirement credit during or after a temporary disability. Members must receive temporary disability benefits through an employer-run workers’ compensation program, including one run on the employer’s behalf. The retirement board must approve the credit, which is limited to one year per disability event. Employers must certify the disability period and pre-disability salary using the state treasurer’s process. Required contributions use that salary, plus applicable interest, and must follow the treasurer’s payment rules. Members subject to mandatory retirement get credit at no cost for applications submitted on or after July 1, 2026. This no-cost rule excludes members who already received disability retirement credit under this provision before that date. Local government employees qualify only when their participating government adopts a resolution accepting liability for the credit. Starting July 1, 2026, local governments can also authorize no-cost credit for members subject to mandatory retirement. Governments with earlier resolutions that incurred costs can adopt a later resolution allowing no-cost credit for those members. These local rules take effect on the resolution’s effective date.