TN Code § 8-35-211 (2021)
2021 Tennessee Code|Title 8 - Public Officers and Employees|Chapter 35 - Retirement—membership|Part 2 - Local Governmental Units|§ 8-35-211. Withdrawal of Participating Employer From Retirement System

  Except for the provisions of this section and the provisions for voluntary withdrawal contained in § 8-35-218, the agreement of any employer participating under this chapter to contribute on account of its employees shall be irrevocable, but should an employer for any reason become financially unable to make the contributions payable on account of its employees, then such employer shall be deemed to be in default and may file with the board a resolution legally adopted by its legislative body requesting withdrawal from the retirement system. Any withdrawal resolution adopted by a political subdivision hereunder shall be deemed to include all departments; employees of such employers will no longer be deemed to be members of the retirement system and their rights shall be limited as hereinafter provided.   Upon the adoption by any employer of a withdrawal resolution, such employer shall at once notify all employees thereof who are members and all former employees who were members, or their beneficiaries, of such adoption.   In the event of a withdrawal from the retirement system:  If the employer withdrawing from the retirement system is either the Tennessee County Services Association or a development district, such employer shall be liable for the payment of retirement benefits to all vested members and beneficiaries thereof. The counties comprising the Tennessee County Services Association and the counties, cities or towns comprising a development district shall assume a pro rata share of this liability, if the assets of the employer are insufficient to satisfy this liability. In the event any county, city or town comprising the Tennessee County Services Association or a development district which is participating in the retirement system refuses to assume a pro rata share of such liability, such amounts may be withheld from state-shared taxes otherwise accruing to such county, city or town. Any amounts satisfied out of state-shared taxes shall be satisfied last from the two-cent gasoline tax; and   The liability of any other employer participating under this chapter shall be limited to the present value of assets on hand at the time of withdrawal, unless such amount is insufficient to guarantee a return of contributions as hereinafter provided, for which the employer shall be fully liable. In the event any employer refuses to satisfy this liability, such amounts shall become a lien on the property of the employer and may be withheld from state-shared taxes otherwise accruing as provided in subdivision (c)(1), or otherwise collected. The Tennessee County Services Association, the Tennessee County Highway Officials Association, the Tennessee County Commissioners' Association, the Tennessee Association of County Executives and the County Officials Association of Tennessee, or any or all of them, may, by resolution of their governing boards, enter into a mutual agreement whereby such entities may share accumulated assets proportionately to fund this liability on behalf of one another should the assets of any party to the agreement be insufficient to satisfy such liability. In the event of such an agreement, any optional provisions of the retirement plan desired by the contracting entities on and after the effective date of the agreement may only be authorized by the Board of Directors of the Tennessee County Services Association. It is the legislative intent that the state shall realize no increased cost as a result of such entities' participation in the retirement system. All costs associated with retirement coverage, including administrative costs, shall be the responsibility of such entities.     The actuary of the retirement system shall determine by actuarial valuation the share of the assets of the retirement system attributable to contributions of the employer and its employees which is allocable to each beneficiary and each member.    The allocation of such assets shall be in the following order:  First, each member and beneficiary shall be entitled to a share equal to the excess of such member's accumulated contributions less any benefits received; and   Second, each beneficiary and each member who is vested shall be entitled to a share equal to the reserve computed to be required for such person's benefit credits accrued to the date of adoption of the withdrawal resolution, reduced by such person's share under subdivision (e)(1)(A).     If the assets of any employer under subdivision (c)(2) are insufficient to provide in full for the shares under subdivision (e)(1)(B) after provision for all shares under subdivision (e)(1)(A), each share under subdivision (e)(1)(B) shall be reduced pro rata.   The amount of assets so allocated to each such member may be used to provide for the member a paid up annuity beginning at the member's service retirement date, or beginning immediately in the case of a member who has attained such service retirement date, and the amount of assets so allocated to each beneficiary shall be used in providing such part of the member's existing retirement allowance as the amount so allocated will provide. When the payments under this subsection (e) have equaled the amount so established as a paid up annuity, such payments shall cease.   The rights and privileges of both members, former members, and beneficiaries of such employers shall thereupon terminate, except as to the payment of the annuities so provided and the retirement allowances, or parts thereof, provided for the beneficiaries. Any contributions returned or service credit lost due to withdrawal by an employer may not be reestablished with the Tennessee consolidated retirement system pursuant to § 8-37-214 upon subsequent employment.   If any assets remain after providing in full for the shares under subdivision (e)(1), the excess assets shall be returned to the employer.   It is further provided that the retirement system shall not be liable for the payment of any retirement allowances or other benefits, accruing under Chapters 34 37, on account of employees or beneficiaries of the employers covered hereunder for which reserves have not been previously created from funds contributed by the employer or its employees for such benefits.     Should any employer participating under this chapter cease to exist as a separate legal entity, the benefits payable on account of service rendered as an employee of the entity shall be determined in accordance with this section.