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Pension and OPEB

Any political subdivision that does not participate in the Tennessee Consolidated Retirement System (TCRS), but provides defined benefit pension plans to its employees is subject to the requirements of The Public Employee Defined Benefit Financial Security Act of 2014 ("the Act").

The Act requires that a political subdivision include in its annual budget the funding of at least 100% of the Actuarially Determined Contribution (ADC) of its pension plan. The purpose of the law is to ensure financial stability and financial soundness of a political subdivision's pension plan or plans to provide pension benefits for future generations of employees. The following guidance was developed to provide an outline of a political subdivision's obligations under the law.

Pension Obligation Funding Policy Adoption and Filing Requirements

The first step for each political subdivision in meeting its obligation to fund its defined benefit pension plan or plans is to develop and legally adopt a funding policy. A political subdivision may use the policy template developed by the Tennessee Department of Treasury, or it may use the funding policy adopted by the TCRS Board of Trustees on September 26, 2014, as a template for the development of its own policy.

The funding policy and any amendments shall be submitted to the Comptroller of the Treasury, Division of State Government Finance, within thirty (30) days of its adoption. Electronic submission is preferred.

Submit your policy and any amendments to:

Sandi Thompson, Director
Tennessee Comptroller of the Treasury
Division of State Government Finance
Cordell Hull Building 
425 Rep. John Lewis Way N.
Nashville, TN 37243
615.747.5380 (phone)
615.741.5986 (fax)

Annual Budget Documentation and Appropriation for Pension Obligations

Officials of political subdivisions that do not participate in the TCRS, must provide documentation in their annual budgets filed or submitted to the Division of Local Government Finance (LGF) that they have budgeted the statutorily required payment to the pension plan. This documentation includes the ADC amount required in a local government's pension funding policy to meet the statutory requirements and identification of the accounts that represent the appropriated amounts for those payments. Please contact your financial analyst with LGF for additional assistance. 

Model Pension Funding Policies 

Guidance and Funding Policies 

Any political subdivision that plans to establish an investment trust for the purpose of funding OPEB obligations is subject to the requirements of the Other Post Employment Benefit (OPEB) Investment Trust Act of 2006, Tenn. Code Ann. §§ 8-50-1201 et seq. One of the conditions of the Act is that the proposed trust agreement be submitted to and approved by the State Funding Board.

Please submit your Investment Trust Document and any amendments to:

Sandi Thompson, Director
State Government Finance
Tennessee Comptroller of the Treasury
Cordell Hull Building
425 Rep. John Lewis Way N.
Nashville, TN 37243-3400
Office: (615) 747-5380


·         Requests for guidance from the State Funding Board should be sent to

·         Legal counsel should be utilized when preparing the investment trust document and related documents prior to submission to the State Funding Board.