House Bill 535 amends the Tennessee Code Annotated to revise the conditions under which part-time employees, judges, and elected officials are required to join the retirement system. Starting July 1, 2025, part-time state employees and teachers will be mandated to participate in the retirement system as a condition of their employment. Additionally, full-time employees who take office as county officials or judges after this date will also be required to join. The bill clarifies that certain groups, such as students and temporary workers under 25, are not eligible for membership. It also introduces a requirement for employer matches to equal 100% of employee contributions up to $50 per month and establishes that all tax-deferred retirement plans set up by public employers must receive approval from the director of the state retirement system.

Further amendments focus on the responsibilities of local governments regarding retirement benefits, stating that the retirement system will not be liable for payments unless reserves have been created from contributions. Local governments will bear all costs associated with retirement coverage, including administrative expenses. The bill introduces new retirement options, such as reduced allowances for beneficiaries after a member's death and provisions for changing designated beneficiaries. It also requires part-time employees and certain officials to file irrevocable elections regarding their participation in the hybrid retirement plan, with specific conditions for those hired after July 1, 2025. Additionally, the bill allows for the inclusion of a SIMPLE IRA account into the retirement benefits framework, stipulating that rollovers can only occur two years after the first contribution. Members must adhere to specified timelines when applying for retirement benefits, with provisions for returning accumulated contributions if eligibility requirements are not met.

Statutes affected:
Introduced: 8-25-303(a)(1), 8-25-303, 8-34-101(14)(D), 8-34-101, 8-35-103, 8-35-109, 8-35-110, 8-35-111(b), 8-35-111, 8-35-113(c)(1), 8-35-113, 8-35-116, 8-35-123, 8-35-226(a), 8-35-226, 8-35-234, 8-35-237, 8-35-256(a)(2), 8-35-256, 8-36-116, 8-36-203(3), 8-36-203, 8-36-601(b), 8-36-601, 8-36-606, 8-36-903(c), 8-36-903, 8-36-916(c)(1), 8-36-916, 8-36-919(a)(1)(B), 8-36-919, 8-36-919(a)(4), 8-37-210(c), 8-37-210, 8-37-219(b)(3), 8-37-219