8-35-404 - Contributions. [Amendment effective June 30, 2011. See the Compiler's Notes.]

8-35-404. Contributions. [Amendment effective June 30, 2011. See the Compiler's Notes.]

(a)  The employee contributions to Title II of the federal Social Security Act (42 U.S.C. §§ 401-425) shall be the same each payroll period as if such eligible employee were a member of the retirement system and shall be matched with an equal amount by the institution by which the eligible employee is employed.

(b)  (1)  Notwithstanding the foregoing, after June 30, 1981, employee contributions to an optional retirement program as defined by this part and by former § 49-3333 [repealed] will be discontinued. In lieu of the discontinued employee contributions, the employer shall make increased employer contributions at the rate of ten percent (10%) of each eligible employee's earnable compensation, plus one percent (1%) of the part of the eligible employee's earnable compensation in excess of the employee's covered compensation.

     (2)  The amount of salary taken into account in determining such contributions shall not exceed the maximum dollar limitation imposed by § 401(a)(17) of the Internal Revenue Code, as amended. For any person becoming a participant in an optional retirement program before July 1, 1996, the dollar limitation under § 401(a)(17) of the Internal Revenue Code as amended shall not apply to the extent the amount of compensation which is allowed to be taken into account under the plan would be reduced below the amount which was allowed to be taken into account under the plan as in effect on July 1, 1993. [Effective until June 30, 2011. See the Compiler's Notes.]

     (3)  In the event the regularly scheduled hours of work per month for any full-time employee participating in the optional retirement program established pursuant to this part are reduced on a non-permanent basis by no more than thirty percent (30%) pursuant to a statute, executive order or action of the employee's appointing authority done by reason of reductions in funding levels, the amount of earnable compensation that the employee would have otherwise received had the scheduled hours not been reduced shall be taken into account in determining the employer contributions pursuant to subdivision (b)(1), subject to the limitations contained in subdivision (b)(2). This subdivision (b)(3) shall have retroactive application to January 1, 2009, and shall cease to be effective on June 30, 2011.

(c)  Employer contributions shall be credited to the optional retirement fund to provide retirement and death benefits for members and are not refundable in a lump sum for any reason, except death or as provided in subsection (d).

(d)  (1)  If a participant has separated from service and has an aggregate total of less than five thousand dollars ($5,000) credited to such participant's retirement accounts, the contributions shall be distributed to the participant, upon the participant's written request therefor, if permitted by the relevant optional retirement company. The distribution shall be made in any manner permitted by the companies holding the accounts. This aggregate total shall be increased by one thousand dollars ($1,000) on January 1, 2002, and on each January 1 thereafter until the aggregate total distribution equals fifteen thousand dollars ($15,000).

     (2)  (A)  If a participant has separated from service and suffers from a total and permanent disability, the participant may file a written request with the participant's employer for a limited lump sum distribution from the participant's accounts each year if permitted by the relevant optional retirement company.

          (B)  To be eligible for the distribution described in this subdivision (d)(2), the request must be accompanied with evidence showing that the participant is receiving social security disability benefits from the social security administration on account of a total and permanent disability suffered by the participant, unless such participant has met the age requirement for receipt of old age and survivors benefits under Title II of the federal Social Security Act. If the participant has met such age requirement, the request must be accompanied with a letter from two (2) physicians that conclusively state that the participant is totally and permanently disabled and that such disability is expected to last for a continuous period of not less than twelve (12) months.

          (C)  For the calendar year 2004, the aggregate total of each annual distribution from all of the participant's accounts shall not exceed eighteen thousand dollars ($18,000). This aggregate total shall be increased by one thousand dollars ($1,000) each calendar year thereafter until the aggregate total annual distribution equals twenty-five thousand dollars ($25,000). Each annual distribution shall be made in any manner permitted by the companies holding the accounts but only upon receipt by the employer of the applicable documentation described in subdivision (d)(2)(B) that confirms the participant's continued eligibility for the distribution.

[Acts 1972, ch. 814, § 12; T.C.A., § 8-3936(d); Acts 1981, ch. 508, § 7; 1990, ch. 1027, § 4; 1993, ch. 345, § 4; 1994, ch. 710, §§ 2, 3; 2000, ch. 871, § 1; 2001, ch. 58, § 7; 2004, ch. 631, §§ 8, 9; 2009, ch. 142, § 17.]