State Treasurer David Lillard Proposes Fiscally Responsible Pension Reform

Changes would only affect new employees hired by the State of Tennessee

State Treasurer David Lillard this week outlined his proposal to reform the state’s pension plan, the Tennessee Consolidated Retirement System (TCRS), to ensure future generations will receive the benefits promised to them during their time as state employees.

The proposed changes, which would only affect new employees hired on or after July 1 of 2014, would change the current defined-benefits system to a hybrid plan that includes elements of defined-benefits and defined-contribution programs. A defined-benefit plan guarantee retirees a fixed pension benefit based on their years of service and earnings, while defined-contribution plans do not have guaranteed payment levels but rather specified contribution levels by the employer.

The new changes proposed by Lillard represent a proactive approach by the Treasurer’s office to ensure the security of pension benefits for current employees, retirees, as well as future employees that will be hired in years to come. These changes also reflect the track record of House Republicans to enact fiscally responsible, commonsense legislative reforms.

The pension changes, when passed by the legislature, will not affect anyone that is currently a state employee, a teacher, a higher education employee, or an employee of a local government participating in the Tennessee Consolidated Retirement System.

For more information, visit the TCRS website at and select the tab titled “Proposed State & Teacher Plans”.