Humphrey on the Hill
Tom Humphrey's blog on politics and legislative news in Tennessee
NASHVILLE -- Legislators leading a panel that oversees
Tennessee's retirement system say they want to review laws that are
allowing 14 nonprofit organizations -- 11 of them employing
lobbyists -- to participate in the state pension system for state
employees and teachers.
Tennessee is one of 20 states that now collectively allow
"hundreds of lobbyists" to get public pensions because they
represent associations of local government officials, according to
an Associated Press report last week. Some states, including New
Jersey and Illinois, are considering legislation that would remove
such groups from state pension plans, the AP reports.
In response to a News Sentinel inquiry, state Treasurer David
Lillard's office provided a list of 14 such groups participating as
"quasi-governmental organizations" in the Tennessee Consolidated
Retirement System. Overall, TCRS has 210,000 currently employed
people as participants and is paying benefits to 115,000 retirees.
Most of those covered by TCRS are state employees, higher
education employees, teachers in K-12 public schools or employees of
city and county governments. City and county governments have the
option of being part of TCRS and many have elected to participate.
The 14 "quasi-governmental" groups combined have 147 current
employees as TCRS members and benefits are being paid to 123 of
their retired employees, according to the treasurer's summary. Of
those 147 current employees, 21 were registered lobbyists this year,
according to the Tennessee Ethics Commission.
Lillard stressed that the groups "pay their own freight" in that
no taxpayer dollars go into covering their benefits, a contrast to
governmental subsidies of payments into the pensions of those
employed directly by government.
"Each quasi-governmental entity pays each year the full amount of
the costs attributable to all of its current employees and retirees,
including its share of the administration expense and investment
expense of the pension plan," says a memo prepared by TCRS
Still, House Finance Committee Chairman Charles Sargent, R-
Franklin, and Senate Finance Committee Chairman Randy McNally, R-
Oak Ridge, say they believe the General Assembly needs to revisit
the laws that allow people who are not government employees to be
part of a government retirement system -- especially when some are
lobbying state government on behalf of the groups they represent.
Sargent and McNally are chairman and vice chairman, respectively,
of the Council on Pensions and Insurance, which oversees TCRS and
reviews any changes to the system. In this year's legislative
session, they backed passage of legislation that repealed authority
for three "nongovernmental" groups to participate in TCRS -- though
those entities had never exercised their right to join.
Five other organizations have been approved by past legislation
to participate in TCRS, but have not joined. The laws authorizing
nongovernment groups to be part of TCRS date back to as early as
1961, with several approved in 1973.
"It would be a public policy decision," said McNally of the
impending review of whether nongovernmental groups should be part of
TCRS, a status that gives such organizations a financial advantage
over private pension plans with much smaller membership. "You
wouldn't want to be supplementing an individual who actually
Both McNally and Sargent cited the Tennessee Education
Association, known as the state's teachers union and with a
membership of about 46,000 educators statewide, as a potential
target for removal from TCRS participation.
TEA is the largest of the nongovernmental groups now in TCRS,
with 36 current employees enrolled and 78 former employees drawing
benefits. Last year, TEA provided $374,908 in payments to the
pension fund and its retirees drew $2,247,833 in benefits, according
to TCRS. …