Council on Pensions recommends against three retirement bills, advances one; COLA proposal opposed

The Council on Pensions met March 3, 2025, and considered six bills affecting the Tennessee Consolidated Retirement System (TCRS), recommending one for passage to a standing committee and recommending against three others. The council also rolled one item for one week and removed another from the calendar "off notice."

Why it matters: The measures considered would change who may participate in or present information about retirement plan options for General Assembly members, whether some members can convert from the hybrid to the legacy plan after 10 years of service, and whether the statutory 3% COLA cap for retirees could be raised in fiscally strong years. These changes affect General Assembly members, retired state employees and teachers, and could have multi‑hundred‑million-dollar fiscal consequences for state and local budgets.

Senate Bill 0008 / House Bill 550 — access for private alternative-plan providers Senate Bill 0008 (House Bill 550) was described by Senator Lowe as a clarification measure establishing that state agencies involved in the consolidated retirement system must allow private providers to present private information about alternative plans. "This has no significant impact on the pension," Senator Lowe said, adding the bill brings clarity after a few firms had been excluded from presenting information. Department staff confirmed the bill, as written, "has no impact on TCRS deferred comp plan." The council voted to give the bill a positive recommendation; the chair announced "you have 9 ayes." The committee record lists a positive recommendation to move the bill to its respective standing committee.

House Bill 0463 / Senate Bill 722 — mandatory conversion from hybrid to legacy after 10 years (negative recommendation) Representative Travis presented House Bill 0463 (Senate Bill 722) as a measure that "requires the TCRS Board of Trustees to convert a person's participation in the retirement system for services of a member of the General Assembly ... from the hybrid plan to the legacy plan, upon the person completing 10 years of service" if the person became a member on or after July 2014. Department staff explained the bill would make the conversion prospective: service and balances accrued under the hybrid plan would remain, and service after conversion would be calculated at legacy rates. The department placed a fiscal note on the bill that included an estimated $5,560,000 for insurance continuation and $65,000 annually for the retirement system. After discussion, a motion for a negative recommendation carried; the chair recorded "8 ayes and 1 no." The committee recommended against passage to its respective standing committee.

House Bill 0462 / Senate Bill 1416 — retirement participation change (negative recommendation) Representative Travis said House Bill 0462 (Senate Bill 1416) would affect participation in the retirement plan for General Assembly members (the bill omits the health‑insurance provision present in a related measure). Department testimony summarized the bill as "the same as the last bill except it's taken out the part that talks about health insurance" and placed a fiscal note of $65,000. The council voted to recommend against the bill; the chair recorded the vote as "7 ayes, 1 no and 1 pass."

House Bill 1296 / Senate Bill 1157 — remove 3% COLA cap when funding allows (negative recommendation) Representative Powell described House Bill 1296 (Senate Bill 1157) as a proposal to remove the statutory 3% cap on cost‑of‑living adjustments (COLA) for TCRS retirees when sufficient funding exists, so that in strong fiscal years the system and General Assembly could grant COLAs above 3%. Department testimony reviewed the current COLA formula and presented actuarial and fiscal estimates: an increase in pension liability of approximately $1,600,000,000 and first‑year state costs of about $72,500,000; teachers' share $25,800,000; and permissive local government exposure approximately $47,300,000. After no further discussion, the council voted and the chair announced "you have 9 ayes;" the committee recommended against passage to its standing committee.

House Bill 756 / Senate Bill 966 — roll one week Members agreed, "Without objection, rolled 1 week," so House Bill 756 / Senate Bill 966 was postponed for one week at the request on the record.

Senate Bill 756 / House Bill 774 — taken off notice At the start of the meeting the chair removed item number 6 (Senate Bill 756, House Bill 774) from the notice "without objection"; the item was not considered in committee during this session.

Discussion, departmental clarifications and member concerns Department staff repeatedly clarified technical points: conversions from hybrid to legacy would be prospective (balances and 401(k) accruals earned under the hybrid plan remain tied to the hybrid accruals), hybrid‑plan members also participate in defined‑contribution accounts, and the legacy/hybrid monthly multipliers differ depending on years of service. Members asked whether conversion would be automatic; the sponsor confirmed the bill makes the conversion automatic on reaching the 10‑year threshold. The department also distinguished the retirement‑only measure from the related bill that included health‑insurance continuation.

What happens next Each bill will be forwarded to its respective standing committee with the recommendation recorded above. The council adjourned after finishing its calendar.