Tennessee

Overview

The Tennessee Consolidated Retirement System is the sole statewide retirement system in Tennessee, administering retirement benefits for employees of the state, public school teachers, and employees of political subdivisions that have elected to participate. The City of Chattanooga, the Metropolitan Government of Nashville & Davidson County, and the City of Memphis, among other political subdivisions, also maintain retirement systems.

Plan Design

Newly-hired employees into the Tennessee Consolidated Retirement System since July 1, 2014 participate in a hybrid, DB-DC plan. Those hired previously participate in a traditional DB plan.
 

According to the US Government Accountability Office, 91 percent of employees of state and local government in Tennessee participate in Social Security.

Access plan design detail

Authorizing Statutes and Board Structure

Tennessee Code § 8-34-201 establishes the Tennessee Consolidated Retirement System as a defined benefit plan. Tennessee Code § 8-34-302 establishes the system’s board of trustees, which includes 20 members.

Details regarding the composition of these and other retirement boards is accessible via the Retirement and Investment Board Characteristics search tool located at the bottom of this page.

Fiduciary Duty/Prudence Standard

Tennessee Code Title 35 Chapter 14:
The board of trustees shall invest and manage assets solely in the interest of the beneficiaries of the retirement system in a manner consistent with § 35-14-107, the prudent investor rule pursuant to § 35-14-103, the standard of care pursuant to § 35-14-104, and the exercise of reasonable care in delegation of investment and management functions pursuant to § 35-14-111. 

Legal Protections of Retirement Benefits

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

See also the following search tools:

Retirement System Account Interest Policies Economic Actuarial Assumptions Retirement and Investment Board Characteristics
Information about interest rates applied to account balances of inactive plan participants Assumed rates of investment return and inflation Composition and characteristics of public retirement and investment oversight boards
Mortality Assumptions Plan Design Features Post-retirement Employment Policies
Public retirement system actuarial assumptions for mortality Numerous elements of retirement plan design Policies governing return-to-work for retirement system annuitants

More Data

Flag of Tennessee (February 3, 1905)

Population (2024) 7,227,750

Tennessee public pension statistics, per U.S. Census Bureau as of FY 2024

Assets

$85.2 billion

Active Members

273,708

Annuitants

228,430

Benefits Paid

$4.3 billion

Employee Contributions

$694.0 million

Employer Contributions

$2.0 billion

Systems

One state retirement system that accounts for 84 percent of assets and 87 percent of public pension plan participants in the state.  There are 38 local retirement systems in Tennessee: the City of Chattanooga, the Metropolitan Government of Nashville & Davidson County, and the City of Memphis, among other political subdivisions in the state, also maintain retirement systems.

Other Resources


Become A Member

Becoming a member of NASRA offers a unique opportunity to join a community committed to the sound, efficient, and innovative stewardship of public retirement systems. Membership connects you with a network of professionals and experts, providing valuable insights into managing public retirement systems with a focus on sustainability and risk-averse strategies.

By joining NASRA, you gain the tools and resources to enhance the management of public retirement systems, ensuring their long-term success and reliability for generations to come.


 

What's New at NASRA: Public Pension Investment Return Assumption Brief Updated

NASRA’s latest update to standing issue briefs, Public Pension Plan Investment Return Assumptions underscores the critical role the investment return assumption plays in the financial health of public pension plans. Of all actuarial assumptions, it has the greatest impact on plan funding levels and cost. This brief traces how a decade of low interest rates and inflation, beginning in 2009, prompted many plans to reduce their long-term expected returns in line with more modest capital market projections. However, since inflation began rising in early 2021, the trend toward lowering return assumptions has largely paused. While reducing a plan’s assumed return can increase both costs and unfunded liabilities, setting this assumption is a careful, thorough process. It draws on expert input from actuaries and investment professionals and is guided by actuarial standards of practice.