Tennessee General Assembly makes historic $250 million contribution to TCRS
NASHVILLE - The 112th Tennessee General Assembly appropriated a historic one-time additional contribution of $250 million to the Tennessee Consolidated Retirement System (TCRS) State and Higher Education plan. The largest single contribution in the history of TCRS, this appropriation will further bolster the pension and help lower future recurring contributions.
TCRS has been consistently recognized as one of the best-funded public pensions in the nation, due largely to every Governor budgeting and every General Assembly appropriating sufficient money to fund the pension based on the requirements set by the actuary and TCRS Board of Trustees.
The Tennessee Consolidated Retirement System is under the administration of the Tennessee Department of Treasury, led by State Treasurer David H. Lillard, Jr. TCRS is the defined benefit pension plan serving over 369,000 active and retired state, higher education, and participating local government employees, as well as K–12 public teachers. The state pension provides a lifetime retirement, and survivor and disability benefits for employees and their beneficiaries.
“It is impossible to overemphasize the importance of this year’s $250 million appropriation to the state’s pension fund,” said Lt. Governor Randy McNally. “One of the linchpins of our state’s nearly immaculate Triple A credit rating is our fully funded retirement system. While other states face rising unfunded liabilities, shortfalls and debt, our past and present fiscal responsibility allow us to take this step to ensure the solvency of our pension system not just today, but for many years to come. The future of Tennessee Consolidated Retirement System continues to be protected thanks to the forward-thinking work of Treasurer Lillard.”
“Tennessee remains a low-debt, low-tax state and one of only seven in the entire nation to experience positive economic growth over the last year because of the fiscally responsible decisions we have made, as well as those we continue to make,” said Speaker Cameron Sexton. “This includes the $250 million investment into the state pension fund through the budget to honor our existing obligations and commitment to our citizens. I appreciate Treasurer Lillard and his staff for their effective, committed partnership, which has been critical to our financial success as a state; together, we will continue to ensure Tennessee remains a national economic leader for others to follow in the years ahead.”
Funding for TCRS comes from State and Employer contributions, employee contributions and investment earnings. Currently, 66.83% of the pension payments paid by TCRS were earned by investments. The Department of Treasury’s Investment Division, under the leadership of Michael Brakebill, CFA, Chief investment Officer, internally manages most of the TCRS portfolio working to obtain the highest available investment return while maintaining sufficient liquidity to pay retirees timely.
“Tennessee’s General Assembly has once again shown its commitment to fiscal responsibility and to Tennessee’s public employees,” said Treasurer Lillard. “By making this contribution in 2021, the General Assembly will save each year in contributions to the retirement system.”
Last fiscal year, TCRS paid $2.75 billion in benefits to 146,382 retirees across the state, over 92% of whom remain in Tennessee. The retirement benefits paid by TCRS have a significant economic impact in all 95 counties.
Information about TCRS, including investment reports, can be found at Treasury.Tn.gov.