Amends TCA Section 8-35-226.

Present law requires appointed or elected school board members of special school districts, and of city or county boards, commissions, committees, councils and the like, by whatever name known, who are elected by popular vote and whose duties are performed intermittently or periodically for the purposes of fixing rates, issuing permits or licenses, regulating trades or professions, or who serve in an advisory, study or planning capacity and the like, to be eligible for membership in the Tennessee consolidated retirement system at the option of the chief legislative body of the city, special school district or county. This bill authorizes a member who has been elected or appointed to or has assumed a position covered under the present law on or after January 1, 2012, and simultaneously holds that position and another position with a different employer as a retirement system member, to continue service in the elected or appointed board member position while receiving a retirement allowance, if otherwise eligible therefore, based on the member's salary and service credit in a position other than a position covered under the present law; so long as the following conditions are met: (1) The member's retirement benefits are based on service and salary rendered in a position other than a position covered by the present law; (2) The member is not drawing disability retirement benefits under existing law regarding retirement benefits of public officers and employees; (3) The member will continue to accrue salary and service credit while serving in a position covered under the present law until the member's retirement from that position. Upon the retirement system's receipt of a request from the member, the member will receive a second retirement allowance based on the member's salary and service credit accrued in a position covered under the present law; so long as the member has separated from the position and is otherwise eligible for the retirement allowance. The retirement payment plan and beneficiary selected by the member on the retirement application from the other employment position must be the same for the second retirement allowance and must not be changed or revoked, except as provided in the law regarding optional retirement allowances for public officers and employees; (4) The member must not return to work temporarily in a position covered by the retirement system pursuant to the law regarding reemployment after retirement until the member retires from all positions covered by the retirement system; and (5) Benefits paid under this bill that are based on service in a position other than a position covered under the present must be paid from the member's effective date of retirement, which may include retroactive payments.