NASHVILLE, Tenn. - The Tennessee Treasury Department officially proposed a change to the state pension plan on Monday. State Treasurer David Lillard said he's proposing legislation for the changes to ensure the program's longevity.
Lillard held a news conference on Monday to discuss the changes. The new retirement plan would apply only to new hires and would affect state employees, higher education employees and K-12 teacher hired after June 30th, 2014.
"The new plan does not apply to anyone who's currently on the payroll as a state employee, higher education employee, teacher, or to any retirees who are currently in the system of the TCRS; and it does not affect benefits to any retirees," said Lillard.
Lillard said the state's plan is currently performing better than those in most other states, but he said its earnings have fallen short of expectations over the last several years and he's concerned about its future.
The changes he's proposing would limit the state's future liability for pension costs by creating a type of hybrid benefit-defined contribution plan.
Currently, only teachers contribute 5 percent of their salary. The new proposal requires all employees to contribute that amount.
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