(a) Any member who left the employ of an employer participating in the Tennessee consolidated retirement system in order to perform military service in the armed forces of the United States, and who is reemployed by such employer within six (6) months of honorable discharge from such service, shall have the option of establishing retirement credit for the military service under the following conditions:

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Terms Used In Tennessee Code 8-34-605

  • 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
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Code: includes the Tennessee Code and all amendments and revisions to the code and all additions and supplements to the code. See Tennessee Code 1-3-105
  • Creditable service: means prior service plus membership service, as provided in part 6 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
  • Internal Revenue Code: means the Internal Revenue Code of 1986, codified in United States Code, title 26, as amended. See Tennessee Code 8-34-101
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • 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
  • Retirement: means withdrawal from membership with a retirement allowance granted under chapters 34-37 of this title. 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
  • United States: includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(1) The member must be entitled to reemployment with the employer pursuant to the Uniformed Services Employment and Reemployment Rights Act (38 U.S.C. §§ 4301-4334);
(2) The member must not be able to establish the military service in any other retirement system; provided, that this subdivision (a)(2) shall not apply to the extent it is preempted by federal law;
(3) The member must redeposit any amount the member withdrew from the retirement system upon leaving the employ of such employer, plus interest at the rate provided in § 8-37-214(a); and
(4) The member must make a back payment equal to the amount of employee contributions the member would have made had the member remained continuously employed with the employer during the period of military service claimed. Such contributions shall be based upon the earnable compensation the member was earning at the time the member left employment to enter the military. Notwithstanding anything in this subdivision (a)(4) to the contrary, if the military service was during the Persian Gulf War, the service shall be credited without charge to the member, unless the member is an employee of a political subdivision. If the member is an employee of a political subdivision, the service shall be credited without charge to the member; provided, that the political subdivision accepts the liability therefor. “Persian Gulf War” means the period from and including August 2, 1990, to the date thereafter prescribed by presidential proclamation or by federal law.
(b)

(1) Any member or retired member who served in the armed forces of the United States during any period of armed conflict, as defined in subdivision (b)(2), shall be entitled to establish retirement credit for such military service without charge under the following conditions:

(A) The member was honorably discharged from such military service;
(B) The member cannot establish the military service in any other retirement system; provided, that this subdivision (b)(1)(B) shall not apply to the extent it is preempted by federal law; and
(C) The military service credit cannot be used in determining any rights under the retirement system prior to the member becoming vested.
(2) “Period of armed conflict” means:

WW I 4/7/17 – 11/11/18

WW II 12/7/41 – 12/31/46

Korean War 6/27/50 – 1/31/55

Vietnam Era 2/28/61 – 5/7/75

(c) Any 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, shall be entitled to establish retirement credit for that military service under the following conditions:

(1) For the member’s first year of peacetime military service, the credit shall be on the basis of one (1) day of creditable service for each day of military service rendered. 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 ten and one half percent (101/2%). 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;
(2) After the first year of peacetime military service, the credit shall be on the basis of one (1) day of creditable service for each two (2) days 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
(3) The member shall be subject to the conditions set forth in subdivisions (b)(1)(A)-(C).
(d)

(1) Any member who has performed active duty military service in the armed forces of the United States during any period of armed conflict, as defined in subdivision (d)(2), may establish retirement credit for that military service under the following conditions:

(A) 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 is applied to the member’s earnable compensation at the time of the claim;
(B) The establishment of creditable service for military service in accordance with this subsection (d) is a benefit improvement. Payment of the liability to establish this creditable service is paid in accordance with § 8-35-206(i); and
(C) The member is subject to the conditions set forth in subdivisions (b)(1)(A)-(C).
(2) As used in this subsection (d), “period of armed conflict” means:

Multinational Force in Lebanon 8/21/82 – 2/26/84

Invasion of Grenada/Operation Urgent Fury 10/25/83 – 12/15/83

Invasion of Panama/Operation Just Cause 12/20/89 – 1/31/90

Persian Gulf War 8/2/90 – 4/6/91

Operation Enduring Freedom 10/7/01 – 2/28/14

Operation Iraqi Freedom 3/19/03 – 8/31/10

(e) Any member who was honorably discharged as a result of one hundred percent (100%) permanent total disability from any service-connected, combat-related cause as determined by the United States veterans administration whose permanent total disability existed on the date of discharge shall not be deemed to have military credit in any other retirement system, unless the member retired from the military with twenty (20) or more years of service.
(f) Subsections (b)-(e) are optional to political subdivisions in accordance with § 8-35-217.
(g) For part-time members, earnable compensation shall be increased to the corresponding full-time earnable compensation.
(h) In no case shall the total amount of retirement credit granted for military service under subsections (b)-(e) exceed four (4) years.
(i) Effective December 12, 1994, notwithstanding any other law to the contrary, contributions, benefits, and service credit with respect to qualified military service are governed by § 414(u) of the Internal Revenue Code (26 U.S.C. § 414(u)), and the Uniformed Services Employment and Reemployment Rights Act of 1994 (38 U.S.C. §§ 4301 et seq.).
(j) Effective with respect to deaths occurring on or after January 1, 2007, while a member is performing qualified military service, as defined in the Uniformed Services Employment and Reemployment Rights Act of 1994 (38 U.S.C. §§ 4301 et seq.), to the extent required by § 401(a)(37) of the Internal Revenue Code (26 U.S.C. § 401(a)(37)), survivors of a member in a state or local retirement or pension system, are entitled to any additional benefits that the system would provide if the member had resumed employment and then died, such as accelerated vesting or survivor benefits that are contingent on the member’s death while employed. In any event, a deceased member’s period of qualified military service must be counted for vesting purposes.
(k) Beginning January 1, 2009, to the extent required by § 414(u)(12) of the Internal Revenue Code (26 U.S.C. § 414(u)(12)), an individual receiving differential wage payments, as defined under 26 U.S.C. § 3401(h)(2), from an employer shall be treated as compensation for purposes of applying the limits on annual additions under § 415(c) of the Internal Revenue Code (26 U.S.C. § 415(c)). This subsection (j) shall be applied to all similarly situated individuals in a reasonably equivalent manner.
(l) Subject to a state appropriation, there is established a reserve account in the retirement system for the payment of state liabilities, and the interest that would have been earned thereon, resulting from military service credit established pursuant to this section on or after May 23, 2022. Deposits into the reserve account must come from state appropriations. The interest and dividends earned on the funds in the reserve account must be credited to the account and not revert to the general fund. The state treasurer may assess a charge to the reserve account, in an amount determined by the treasurer, to meet the expenses of the treasury department in administering and investing the reserve account assets.
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