Tennessee

The Tennessee Consolidated Retirement System (TCRS) administers pension and other benefits for most public employees in the state. The system maintains two plans; the State Employees, Teachers and Higher Education Employees Pension Plan and the Political Subdivisions Pension Plan. TCRS is part of the state treasury department with the elected state treasurer serving as manager of system assets.

Authorizing Statutes

Title 8, Chapter 34 establishes the Tennessee Consolidated Retirement System. According to 8-34-201:

A retirement system is established and placed under the management of the board of trustees, for the purpose of providing retirement allowances and other benefits under the provisions of chapters 34-37 of this title. The retirement system so created shall be established as of July 1, 1972.

Title 8, Chapter 34, Part 3, establishes the Board of Trustees which consists of 20 members including:

• The state treasurer, ex officio;

• The director of the division of retirement, ex officio;

• The commissioner of finance and administration, ex officio;

• The comptroller of the treasury, ex officio;

• The administrative director of the courts, ex officio;

• The commissioner of personnel, ex officio;

• The secretary of state, ex officio;

• The chair and vice chair of the council on pensions and insurance, ex officio (nonvoting members);

• Three (3) members of the retirement system who are teachers;

• Two (2) members of the retirement system who are state employees, not from the same department, commission, board, agency or institution, or any department represented by an ex officio member, at least one (1) of whom shall be a general employee;

• One (1) vested member of the retirement system who shall be appointed by the board of directors of the Tennessee County Services Association;

• One (1) vested member of the retirement system who shall be appointed by the board of directors of the Tennessee Municipal League;

• One (1) vested member of the retirement system who shall be appointed by the board of directors of the County Officials Association of Tennessee;

• One (1) retired state or higher education employee member of the retirement system who shall be appointed by the governor;

• One (1) retired teacher, who is a vested member of the Tennessee consolidated retirement system, to be elected at large by the representative assembly of the Tennessee retired teachers association; and

• One (1) police officer.

Board Composition

Contributions

Per the U.S. Census, in FY 2015, employer contributions to Tennessee state and local government pension plans were 3.19 percent of all state and local government direct general spending.

Constitutional Protections

No explicit constitutional protection for public pension benefits, but courts provide protection based on impairment of contract principles, holding that changes can be made to a retirement plan as long as the changes do not impair vested rights. Blackwell v. The Quarterly County Court of Shelby County, 622 S.W.2d 535 (Tenn. 1981) (holding that public pension benefits may be adjusted when necessary to protect or enhance the actuarial soundness of the plan, provided that no such modification can adversely affect an employee who has complied with all conditions necessary to be eligible for a retirement allowance); Davis v. Wilson County, 70 S.W.3d 724 (Tenn. 2002)(holding that health care benefits amounted to welfare benefits that did not automatically vest and could be altered or terminated by county at any time). (TN CONST., Article 1, §20) Source: Robert Klausner, Esq., State Constitutional Protections for Public Sector Retirement Benefits