Pensions and Retirement Benefits - As introduced, requires the board of trustees of the Tennessee consolidated retirement system to convert a person's participation in the retirement system, for service as a member of the general assembly and as a participant in the hybrid plan, from the hybrid plan to the legacy plan upon the person completing 10 years of service as a member of the general assembly if the person became a member of the general assembly on or after July 1, 2014; requires retiree health benefit coverage be made available to retired members of the general assembly with 10 or more years of service. - Amends TCA Title 3; Title 8, Chapter 27, Part 2; Title 8, Chapter 34; Title 8, Chapter 35 and Title 8, Chapter 36.

114th Regular Session (2025-2026) Introduced by Ron Travis

Bill converts Tennessee legislators hired after 2014 to more generous legacy pension plan after 10 years service and adds retiree health coverage, increasing state pension costs.

Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/14/2025

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Legislative bill overview

HB 463 modifies Tennessee's state retirement system for legislators by automatically converting lawmakers who began service after July 1, 2014 from the hybrid retirement plan to the more generous legacy plan after 10 years of service. The bill also requires that retiree health benefit coverage be made available to retired legislators with 10 or more years of service.

Why is this important

This bill directly affects the retirement security and healthcare benefits of state legislators, potentially increasing long-term pension liabilities for the state. Since retirement benefits represent a significant fixed cost in state budgets, changes to legislator pensions can impact overall fiscal planning and set precedent for other public employee retirement discussions.

Potential points of contention

Fiscal impact: Converting participants to the legacy plan (typically offering higher benefits) increases state pension obligations and unfunded liabilities, raising questions about cost to taxpayers

Equity concerns: The automatic conversion only applies to legislators hired after 2014, creating different benefit tiers based on hire date for doing identical work

Self-dealing perception: Legislators voting to improve their own retirement benefits raises ethical concerns about conflicts of interest and public trust in government