8-35-403 - Election by eligible employees to participate.
8-35-403. Election by eligible employees to participate.
(a) Election Authorized. Notwithstanding any other provisions to the contrary, any individual who is exempt from the Fair Labor Standards Act and who is employed in a state-supported institution of higher education hereafter establishing an optional retirement program hereunder may elect either membership in the retirement system or participation in the optional retirement program under the conditions provided herein. In all cases of doubt, the retirement system shall determine whether the employee is eligible to participate in the optional retirement program.
(b) Procedure. Each eligible employee who elects to participate in an optional retirement program rather than the retirement system shall so designate on election forms approved by the board of trustees and filed with it and with the institution where the employee is employed.
(c) Eligible Employee Not a Member of State or Local System. Any such eligible employee who is not a member of the retirement system and who has not accumulated creditable service thereunder as a member of a local retirement fund may make this election within thirty (30) days of employment with a state-supported institution of higher education having an optional retirement program under this chapter or thereafter as described in subsection (d).
(d) Present Member of State or Local System.
(1) Any member of the retirement system or any member of a local retirement fund having rights under the retirement system may elect to participate in such an optional retirement program in lieu of participating in the retirement system while employed in such an institution having an optional retirement program.
(2) Any such election shall become effective no later than the first day of the month following thirty (30) days' written notice to the retirement division and to the institution where the employee is employed. Such notification shall be made on the election forms prescribed in subsection (b).
(e) Any eligible employee who fails to make the election as prescribed in this section shall be a member of the retirement system until such employee makes the election as described in subsection (d).
(f) Notwithstanding any provision of this part or any other law to the contrary, any employee who, on or after January 1, 2005, attains either five (5) or more but less than six (6) years of creditable service in the optional retirement program, or five (5) or more but less than six (6) years of creditable service in the Tennessee consolidated retirement system and the optional retirement program combined, shall have the option of transferring membership from the optional retirement program to the Tennessee consolidated retirement system under the following terms and conditions:
(1) The employee is employed in a position covered by the Tennessee consolidated retirement system and has not received from the employee's account or accounts in the optional retirement program a cash withdrawal or other distribution that resulted from service rendered to a Tennessee state-supported institution of higher education. This provision shall not be construed to apply to limited lump sum cash distributions made pursuant to § 8-35-404(d)(1);
(2) The election must be made on election forms prescribed by the Tennessee consolidated retirement system and filed with it and with the institution where the employee is employed by no later than the end of the calendar year following the year the employee completes five (5) years of creditable service;
(3) Any such transfer shall include both past and prospective membership;
(4) The transfer shall be irrevocable;
(5) The employee must pay to the Tennessee consolidated retirement system the greater of:
(A) A sum equal to the employee's account balances in the optional retirement program that resulted from service rendered to a Tennessee state-supported institution of higher education; or
(B) A sum equal to twelve and sixty-five hundredths percent (12.65%) of the employee's earnable compensation during the period of the employee's membership in the optional retirement program, plus interest on the amount at the rate provided in § 8-37-214;
(6) Notwithstanding § 8-37-220, the payment required under this subsection (f) shall be made in a lump sum to the Tennessee consolidated retirement system by no later than the end of the calendar year following the year the employee completes five (5) years of creditable service, and may be funded in whole or in part from amounts transferred from the employee's accounts in the optional retirement program, from other eligible tax deferred retirement accounts or from other funds available to the employee. For the purposes of this subdivision (f)(6), amounts transferred from a tax deferred retirement account shall have the same meaning as that given in § 8-37-214(g)(1). Any difference between the payment required under this subsection (f) and the amount transferred from the optional retirement program or a tax deferred retirement account shall be paid to the Tennessee consolidated retirement system within sixty (60) days following the transfer, but in any event no later than the end of the calendar year following the year the employee completes five (5) years of creditable service. Notwithstanding § 8-35-111 or any other law to the contrary, if the payment is not funded in whole or in part from amounts transferred from the optional retirement program, the employee shall be permitted to retain ownership of the amounts without violating § 8-35-111;
(7) The employee shall have no rights, benefits or privileges in the Tennessee consolidated retirement system until the full amount of the payment required under this subsection (f) is received by the retirement system. In the event the employee fails to remit the full amount by the time specified in subsection (f)(6), the employee shall irrevocably lose the employee's right to transfer membership from the optional retirement program to the Tennessee consolidated retirement system under this chapter; and
(8) All payments made under this subsection (f) shall be credited to the state accumulation fund pursuant to § 8-37-301 and not to the individual accounts of members in the members' fund.
(g) Notwithstanding § 8-35-411 or any other law to the contrary, any employee who transfers membership from the optional retirement program to the Tennessee consolidated retirement system pursuant to this section may elect to receive a cash withdrawal of all or any portion of the employee's accumulated account or accounts if permitted by the relevant optional retirement company.
(h) [Deleted by 2007 amendment.]
(i) [Deleted by 2007 amendment.]
[Acts 1972, ch. 814, § 12; 1978, ch. 740, § 2; T.C.A., § 8-3936; Acts 1981, ch. 508, § 6; 1988, ch. 973, § 6; 1993, ch. 345, §§ 4, 5; 2001, ch. 58, § 6; 2004, ch. 631, § 7; 2004, ch. 738, §§ 1, 2; 2005, ch. 204, §§ 8, 9; 2006, ch. 870, § 16; 2007, ch. 184, § 8.]