Pensions and Retirement Benefits

Plain English Breakdown

The official source does not provide details on how many people will be affected by this change or if there are any limits on the number of years that can be counted towards retirement credit.

Expanding Military Service Credit for Retirement

This bill changes how Tennessee allows its retired and current employees to get credit for military service when calculating their retirement benefits.

What This Bill Does

• Allows public employees who served in the U.S. armed forces during peacetime after October 15, 1940, to count that time towards their retirement credit without any specific end date.
• Changes the calculation so that every day of military service counts as one day of creditable service in retirement calculations.

Who It Names or Affects

• Public employees who served in peacetime military duty after October 15, 1940.
• The Tennessee Consolidated Retirement System (TCRS).

Terms To Know

Tennessee Consolidated Retirement System (TCRS)

A retirement system for public employees in Tennessee.

Earnable compensation

The amount of money a person can earn from their job, used to calculate contributions for retirement benefits.

Limits and Unknowns

• It is not clear how many people will be affected by this change.
• The bill does not specify if there are any limits on the number of years that can be counted towards retirement credit.

Official Summary Text

Present law provides that

a
ny member or retired member who performed peacetime military service in the armed forces of the United States at any time from October 15, 1940, through May 7, 1975,
is
entitled to establish retirement credit for that military se
rvice
in
the Tennessee consolidated retirement system
(TCRS)
under the following conditions:

(1) For the member's first year of peacetime military service, the credit
is
on the basis of one day of creditable service for each day of military service rend
ered. To establish the first year of such military service, the member must pay employee contributions for the service claimed based on a contribution rate of 10
.5
%.

The rate
must
be applied to the member's earnable compensation at the time of the claim o
r, if not in service at the time of the claim, the member's earnable compensation at termination of employment;

(2) After the first year of peacetime military service, the credit
is
on the basis of one day of creditable service for each two days of mili
tary service rendered.

To establish such military service, the member must pay employee contributions for the service claimed based on a contribution rate o
f
9%.

The rate
must
be applied to the member's earnable compensation at the time of the claim or,
if not in service at the time of the claim, the member's earnable compensation at termination of employment; and

(3) The member
meets the following conditions: (i) t
he member was honorably discharged from such military service;
(ii) t
he member cannot es
tablish the military service in any other retirement system
unless this provision is
preempted by federal law; and

(
iii
)
t
he military service credit cannot be used in determining any rights under the retirement system prior to the member becoming vested.

This bill revises the current law in the following ways:



Allows it to apply to service beyond
May 7, 1975
.



Removes (1) above completely.



Re
vises
(2)
above such that

creditable service must be calculated on the basis of one day of creditable service for each day of military service rendered
, instead of each two days of military service rendered.

Current Bill Text

HOUSE BILL 756
By Faison

SENATE BILL 966
By Southerland

SB0966
000893
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 8,
Chapter 34, relative to creditable service for
retirement for public employees.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 8-34-605(c), is amended by deleting
the subsection and substituting instead:
(c) A member or retired member who performed peacetime military service in
the armed forces of the United States at any time on or after October 15, 1940, is
entitled to establish retirement credit for that military service under the following
conditions:
(1) Creditable service must be calculated on the basis of one (1) day of
creditable service for each day of military service rendered. To establish such
military service, the member must pay employee contributions for the service
claimed based on a contribution rate of nine percent (9%). The rate shall be
applied to the member's earnable compensation at the time of the claim or, if not
in service at the time of the claim, the member's earnable compensation at
termination of employment; and
(2) The member is subject to the conditions set forth in subdivisions
(b)(1)(A)-(C).
SECTION 2. This act takes effect July 1, 2025, the public welfare requiring it.