(a) Any teacher in the service of an employer operating a local retirement fund, who is eligible for membership therein, shall not be a member of the retirement system established by this chapter, and shall make no contributions to this retirement system, and shall be eligible for benefits under this retirement system only as provided in this section, but any teacher employed by an employer operating a local retirement system who is not eligible for membership in the local retirement system, shall be eligible for membership in the system established by this chapter, shall contribute to and participate in the benefits of this chapter. Any teacher entering the service of an employer operating a local retirement fund after February 15, 1945 may elect to become a member of the local retirement fund, provided that the application is approved by the governing board of the local retirement fund. If a teacher in the service of an employer operating a local fund who is eligible for membership therein shall cease to be a teacher, and if at such time he would have been eligible for service or disability retirement under the provisions of this retirement system had he been a member, the board of trustees shall pay from the accumulation account of this system to the managing board of the local retirement fund a state annuity equal to the state annuity for membership service which would have been payable under this system if such member had been classified as a class B member of this system to the time of his retirement; and, if, as hereafter provided, he has a prior service certificate in full force and effect, the board shall also pay the state annuity that would have been payable to a class B member on account of the prior service accumulations certified thereon; provided that the excess of any such state annuity payable under this system over the retirement income provided by the local retirement fund by contributions of the employer shall be payable to the retired teacher and not to the local retirement fund; provided, however, that in case any local retirement fund shall provide for service retirement at an age lower than the minimum prescribed under the provisions of this system, no state annuity shall be paid on account of any member so retired at such lower age until he has attained the minimum service retirement age prescribed by this system, at which time the state annuity shall be payable computed at the age of actual retirement. Notwithstanding the foregoing, should the teacher have been a class A member in the retirement system for a period of five (5) or more years the amount of state annuity payable hereunder shall be determined on the basis of such classification. The payment of the state annuities under the provisions of this section shall be subject to all the conditions governing the payment of state annuities to members retired under this retirement system. It shall be the duty of the employers operating local retirement funds to report to the board of trustees annually or at such other intervals as shall be set by the board, the earnable compensation of each teacher in their employ and such other information as may be needed for establishing the prospective benefit of the member and for administering the provisions hereunder. Notwithstanding the provisions of this section to the contrary the board of trustees of the Tennessee teachers’ retirement system shall, upon request of the managing board of a local retirement fund, henceforth pay the entire amount of the state annuity directly to the members of said local retirement fund.
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Terms Used In Tennessee Code 49-1542

  • Accumulated contributions: means the sum of all the amounts deducted from the compensation of a member, together with any amount transferred to the account of the member established pursuant to chapters 34-37 of this title from the respective account of the member under one (1) or more of the superseded systems, with interest thereon, as provided in §. See Tennessee Code 8-34-101
  • Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
  • Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
  • board: means the board provided for in part 3 of this chapter. See Tennessee Code 8-34-101
  • Earnable compensation: includes , but is not limited to, any bonus or incentive payment. See Tennessee Code 8-34-101
  • Employer: means :
    (A) The state or any department, commission, institution, board or agency of the state government by which a member is paid, with respect to members in its employ. See Tennessee Code 8-34-101
  • Local retirement fund: means any teachers' retirement fund or other arrangement for payment of retirement benefits to teachers, except this retirement system, supported wholly or in part by contributions made by an employer as defined by chapters 34-37 of this title. See Tennessee Code 8-34-101
  • Member: means any person included in the membership of the retirement system, as provided in chapter 35, part 1 of this title. See Tennessee Code 8-34-101
  • Membership service: means service rendered while a member of the retirement system. See Tennessee Code 8-34-101
  • Month: means a calendar month. See Tennessee Code 1-3-105
  • Prior service: means service rendered prior to the date of membership in the retirement system for which credit was given under the terms of one (1) or more of the superseded systems as provided in part 6 of this chapter. See Tennessee Code 8-34-101
  • Retirement: means withdrawal from membership with a retirement allowance granted under chapters 34-37 of this title. See Tennessee Code 8-34-101
  • Retirement allowance: means the sum of the member annuity and the state annuity. See Tennessee Code 8-34-101
  • Retirement system: means the Tennessee consolidated retirement system as defined in §. See Tennessee Code 8-34-101
  • Service: means service as a general employee, a teacher, a state police officer, a wildlife officer, a firefighter, a police officer, a state judge, a county judge, an attorney general, a commissioner or a county official which is paid for by an employer, and also includes service for which a former member of the general assembly is entitled to under former §. See Tennessee Code 8-34-101
  • State: means the state of Tennessee. See Tennessee Code 8-34-101
  • State annuity: means annual payments for life derived from contributions by an employer. See Tennessee Code 8-34-101
(b) Each employer having a local retirement fund, who has not already done so, shall report to the board of trustees a complete list of all teachers in his employ on December 31, 1945, giving for each such teacher the date of birth, years of service, and salary, and such other information as shall be needed by the board of trustees in order to establish for each teacher a prior service credit as provided in §§ 49-1513 – 49-1518, and the board of trustees shall then issue to such teacher a prior service certificate which shall continue in force so long as such teacher remains in the employ of such employer or in the service of an employer not having a local retirement fund, without a break in service which would have resulted in the canceling of such certificate had the teacher been a member of the state retirement system established by this chapter. Should a member of the state retirement system enter the employ of an employer operating a local retirement fund, he shall cease to contribute to the state retirement system and become subject to the provisions of the local retirement fund, and he shall not lose his previous accrued credits in the state retirement system so long as he continues in the service of such employer.
(c) Should a teacher in the service of an employer operating a local retirement fund become a member of this retirement system by entrance into the service of an employer without a local retirement fund, he shall contribute to the state retirement system while so employed and continue with the previous service credits in the state retirement system which he had at the time of becoming a member, as if he had been a member during such period of service and elected class A membership.
(d) Notwithstanding any other provisions of this chapter, the actuary in determining the normal and accrued liability contributions and the board in setting such contributions and the amount of the appropriation to be paid by the state to the accumulation account, shall include the liability on account of teachers in the employ of employers having local retirement funds, and the state annuity payable from the retirement reserve account shall include those payable on account of teachers in the service of employers having local funds as provided in this section.
(e) Notwithstanding any other provisions to the contrary in this chapter, if a local teacher retirement plan does not allow a member, who retires after July 1, 1967, retirement credit for all years creditable under the Tennessee teachers’ retirement law, the state annuity shall be computed on all years of credit under the Tennessee teachers’ retirement law as prescribed herein and then divided into two (2) parts and paid as follows:

(1) The payment to the local retirement system shall be limited to the number of years of local system credit, and
(2) the payment based upon the additional years of credit in the Tennessee teachers’ retirement system, shall be paid directly to the retired local member.
(f) Notwithstanding any other provision to the contrary in this chapter, any member of a local retirement fund whose retirement becomes effective on or after July 1, 1967, and to whom or on whose account a state service or disability retirement allowance or minimum benefit supplement under § 49-1552 becomes payable, there shall be deducted from such amount the teacher annuity that would have been payable to him had he been a member of the Tennessee teachers’ retirement system.
(g) Notwithstanding any other provisions to the contrary, whenever a local board of education which is a part of a consolidated county-city form of government which was established prior to February 18, 1970, administers a local teacher retirement fund, the retirement payments due on and after July 1, 1967, by the Tennessee teachers’ retirement system on account of the retired members of such fund shall include the increases resulting from any minimum benefit amendments to § 49-1552 which have become effective on or after July 1, 1963, and such increases shall be paid directly to the retired members of such local fund.
(h) Notwithstanding the foregoing, wherever the managing board of the local retirement fund includes municipal employees who are not elected by the people and who are not members of the board of education, nor employed or appointed by the board of education, said managing board shall pay monthly to each retired teacher in addition to whatever retirement income he was otherwise entitled to receive from the local retirement fund an amount not less than his proportionate part of the excess of the total of the state annuities received by said managing board for all retired teachers for that month over that for the corresponding month of 1961.
(i) Notwithstanding any other provisions to the contrary in this chapter, any teacher who is a member of any local teacher retirement plan shall be eligible to transfer membership into the Tennessee teachers’ retirement system as a class A member whenever a local board of education administering such plan provides in such plan for such a transfer; provided, however, that any such transfer must be made within five (5) years after the teacher electing to transfer has become eligible. If a teacher transfers from such local retirement plan to this retirement system, he shall contribute to this retirement system as a class A member as if he had been a member of this system during such period of service and elected class A membership, however, social security coverage through this system shall begin as of the date of transfer. He shall be given credit for his teacher annuity for the same number of years that he was a member of said local retirement plan, provided that said local retirement plan shall transfer to this retirement system a sum of money equal to the accumulated contributions he would have had, had he been a contributing member of this system the entire period of his membership in the local retirement plan, which period of time shall begin no earlier than the time of establishment of this system. The contributions for any period of service after July 1, 1957, shall be calculated for the teacher as a class A member.
(j) Notwithstanding any other provision to the contrary, the board of trustees shall pay directly to retired local members whatever state annuity is provided for them whenever the managing board of the local fund is not permitted by municipal charter or other to receive.
(k) Notwithstanding any other provision to the contrary, the board of trustees shall pay directly to the retired members of a local fund whatever annuities are provided for them whenever the managing board of said local fund is a pension board created by the charter of a municipality which has adopted or hereafter shall adopt home rule by the affirmative vote of a majority of the qualified voters voting thereon, or as the said charter may be amended from time to time, provided that the said pension board is not the board of education or does not include any member of the board of education of the said municipality.
(l) Notwithstanding any provision of the law or municipal charter provisions to the contrary, the governing body of any political subdivision having a local retirement fund from which retired members receive benefits may by ordinance or resolution authorize the board of trustees to pay directly to the retired member of such local retirement fund whatever state annuities are provided for them. The adoption of such ordinance or resolution shall be permanent and such action may not be repealed to the detriment of any retired member.
(m) Notwithstanding any other provision to the contrary optional retirement allowances may be selected in accordance with the provisions of § 49-1553.
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