§ 8-35-203 — Membership of employees - Credit for prior service

(a) (1) (A) Membership in the retirement system for employees of employers that are admitted as provided in this part shall be: (i) Optional for all employees in the service of the employer on the date the approval is given except as provided in subdivision (a)(1)(B); and (ii) Mandatory for all eligible employees entering the service of the employer thereafter. (B) (i) If the employer continues to maintain a preexisting pension plan that is closed to new membership on the date of the employer's participation date in the retirement system, the employer may, by resolution duly adopted by its chief legislative body, authorize its current employees who participate in the preexisting plan the choice of maintaining membership in the preexisting plan or joining the retirement system; provided, that allowing such choice meets all applicable state and federal requirements, including § 414(h) of the Internal Revenue Code ( 26 U.S.C. § 414(h) ), that are necessary for the retirement system to maintain its status as a qualified plan under the Internal Revenue Code. (ii) The election to join the retirement system shall be in the manner prescribed by the retirement system and shall be filed with the retirement system. Any such election shall be irrevocable. (iii) Notwithstanding § 8-37-202 or any other law to the contrary, any employer described in subdivision (a)(1)(B)(i) shall set the employee contribution rate for its employees at the same rate as required under the employer's preexisting plan. The employer shall submit to the retirement system a duly executed adoption resolution as provided in § 8-35-201 prior to the employer's effective date of participation, which must be approved by the board of trustees. (2) Credit for such periods of previous service as shall be certified as creditable service by the employer for service rendered to the employer or its predecessor, or in any other capacity approved by the employer and the board, for which the employer is willing to make accrued liability contributions shall be credited to employees who meet all of the following conditions: (A) The employee must have been employed by the employer on the date the approval is given and continuously for the thirty (30) days immediately preceding that date; provided, that in the event the employee was not continuously employed by the employer from the period of previous service claimed through and including the date the approval is given, the employee must have been employed by the employer on the date the approval is given and continuously for the six (6) months immediately preceding or after that date; (B) The employee must have become a member of the retirement system within thirty (30) days after the approval is given; (C) The employee must pay whatever back contributions and interest is due to establish service authorized by the employer. Subject to subdivision (a)(2)(D), such payment may be funded in whole or in part from amounts transferred from any preexisting pension plan maintained on behalf of the employee by the employer, from other eligible retirement accounts as defined in § 8-37-220 , or from other funds available to the employee; and (D) (i) If the employer maintained a preexisting public employee retirement system as defined in § 8-35-111 on behalf of the employee during any period of the previous service authorized by the employer under this subdivision (a)(2), then the employee shall have six (6) months from the employer's participation date in the retirement system to elect to establish the previous service rendered while a participant in the preexisting plan by making the required payment and by forfeiting the employee's right to any employer contributions and interest thereon, and to any service credit in the preexisting plan if any part of the service credit was funded through contributions made by the employer; (ii) Any employee who fails to make the election provided for in subdivision (a)(2)(D)(i) shall not later be eligible to establish the previous service rendered while a participant in the preexisting plan. (3) After becoming a member, service by such employee for which contributions are made shall be considered creditable service. (b) (1) A participating political subdivision may allow any employee previously denied service credit due to advanced age to establish such service. The chief governing body may authorize this credit by passing a resolution and accepting the liability. (2) The employee may then establish such credit by making a lump sum payment of the contributions the employee would have made had the employee been a member of the system during the period claimed, plus interest at the rate provided for in § 8-37-214 . (c) An employee or elected or appointed official of this state or any political subdivision thereof who is convicted in any state or federal court of a felony arising out of the employee's or official's employment or official capacity constituting malfeasance in office shall forfeit that employee's or official's retirement benefits in accordance with § 8-35-124 . (d) (1) Notwithstanding any provision to the contrary, any current member of the consolidated retirement system who would have been eligible for service credit in the retirement system pursuant to § 8-35-226 , but was not in service with the local government on the date § 8-35-226 was adopted by the local government, may be eligible for retirement credit for such prior service at the option of the political subdivision for whom such prior service was rendered upon satisfying the following conditions: (A) The chief legislative body of such political subdivision authorizes and pays for the cost of an actuarial study to determine the liability associated with the granting of such service credit; and (B) Following review of the cost of granting such service credit, the chief governing body of such political subdivision passes a resolution authorizing such service credit and accepting the liability for such credit. (2) Any service established shall be subject to the same limitations as contained in § 8-35-226 .

Legislative History

Amended by 2016 Tenn. Acts, ch. 962, Secs.s 29, s 45 eff. 4/27/2016. Amended by 2015 Tenn. Acts, ch. 421, s 17, eff. 5/8/2015. Acts 1972, ch. 814, § 10; T.C.A., § 8-3934(2); Acts 1980, ch. 654, §§ 5, 6; 1982, ch. 771, §§ 4, 8; 1987, ch. 54, § 8; 1988, ch. 973, § 4; 1989, ch. 178, § 1; 1992, ch. 843, §§ 14-16; 1993, ch. 508, § 3; 2004, ch. 631, § 5; 2006, ch. 870, §§ 13, 14.