(a) If the board of trustees determines, after reviewing the actuarial valuation as of June 30, 1993, that the recommended employer contribution rate for state employees and teachers is less than the rate in effect on June 30, 1993, any excess appropriation contained in the general appropriations act resulting from the reduction in annual contribution requirements for the fiscal year ending June 30, 1994, shall be utilized by the board of trustees as follows:

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Terms Used In Tennessee Code 8-36-124

  • Amortization: Paying off a loan by regular installments.
  • 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
  • Average final compensation: means the average annual earnable compensation of a member during the five (5) consecutive years of the member's creditable service affording the highest such average, or during all of the years in the member's creditable service if less than five (5) years. See Tennessee Code 8-34-101
  • board: means the board provided for in part 3 of this chapter. 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
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • 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 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
  • Superseded system: means , where applicable, the Tennessee state retirement system, the Tennessee teachers' retirement system, the Tennessee judges' retirement system, the retirement system for county paid judges of Tennessee, the attorneys general retirement system of Tennessee, the public service commissioners' retirement system, and the Tennessee retirement system for county officials, any one (1) of them, or any combination thereof. See Tennessee Code 8-34-101
(1) Any excess appropriations shall first be used to reduce the amortization period of the unfunded accrued liability existing on June 30, 1993, by at least six (6) years, as authorized in [former] § 8-37-304(b) [repealed];
(2) If any appropriations remain after decreasing the amortization period, such appropriations shall be used to calculate the average final compensation of any active or retired member of the retirement system or any superseded system who has service in more than one (1) membership classification and whose benefits are determined pursuant to § 8-36-110 as if all the member’s service was rendered in the same membership classification, except for those members covered under §§ 8-35-226 and 8-35-234;
(3) If any appropriations remain after implementing the above average final compensation change, such funds shall be used to increase the base benefit of Group I members, other than members of the general assembly; Group II members; members of the superseded state retirement system; members of the superseded state teachers’ retirement system; state employees covered under § 8-39-101; and teachers covered under § 8-39-102, subject to the following terms and conditions:

(A) The amount of any base benefit improvement authorized in this section shall be set by the board, but shall not exceed five percent (5%);
(B) The board shall consider any comments of the council on pensions prior to adopting a base benefit improvement increase;
(C) Any base benefit improvement increase authorized in this section shall be effective January 1, 1994, and shall apply to both active and retired members in the groups and systems referenced herein;
(D) Any base benefit improvement increase authorized pursuant to this section shall not apply to employees of employers participating in the retirement system pursuant to chapter 35, part 2 of this title, unless the governing body of any such employer, after receipt of the liability information from the retirement system, passes a resolution authorizing the increase and accepting the liability thereof;
(E) Section 8-36-208(a) shall not be construed to prevent any increase in the retirement allowance of a member when such increase is in accordance with this section, nor shall § 8-36-102 be construed to prevent any increase in the retirement allowance of a member retiring prior to January 1, 1994, when such increase is in accordance with this section; and
(4) If any further appropriations remain after implementing the base benefit increase, such funds shall be used to further reduce the amortization period of the unfunded accrued liability existing on June 30, 1993.
(b) The board of trustees shall not adopt changes pursuant to this section which cause the actuarial funding requirement for state employees and teachers to exceed the actuarially determined employer contribution rate established pursuant to the June 30, 1991, biennial evaluation.
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