Tennessee Senate Bill SB2397

Tennessee 2025-2026 Regular Session

• Introduced: 2/2/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 4; Title 8; Title 9 and Title 50, relative to retirement.

Summary

SB2397 creates the Tennessee Retirement Savings Plan Act and establishes a new Tennessee retirement savings board to design and oversee a state-facilitated defined contribution retirement program for workers in Tennessee. The board would be housed administratively in the Department of Treasury and include the state treasurer, gubernatorial appointees representing employers, employees, investments, and retirees, plus nonvoting legislative members. The board is directed to study the market and legal landscape, adopt rules, and develop a retirement savings plan that uses payroll deductions, automatic enrollment with opt-out, default contribution rates, and professionally managed pooled investments. The bill phases in eligibility for private-sector workers by employer size, beginning in 2029 for employers with more than 100 employees, then expanding in 2030 to employers with 25 to 100 employees, and in 2031 to employers with 5 to 24 employees. Employers that already offer a qualified retirement plan are exempt, and the bill states that employers would not be required to make matching contributions or take on ERISA duties. The legislation also sets confidentiality rules for participant information, protects plan assets from most creditor claims, creates an administrative fund, and requires annual reporting to the governor and legislative committees. It further restricts local governments from offering retirement plans to non-governmental workers, with a limited exception for existing plans for independent contractors.

Impact

If enacted, the bill would add a new part to Title 8 of the Tennessee Code and create a state-run framework for a retirement savings program for private-sector workers, while also amending the state public bodies statute to formally recognize the new board. It would authorize rulemaking, fee collection, contracting with private financial and administrative vendors, and the use of state treasury staff and funds to support implementation. The bill would also affect employers by requiring certain businesses to offer payroll-deduction access to the plan unless they already sponsor a qualified retirement plan, while expressly limiting employer liability and avoiding employer contribution mandates.

Sentiment

The available voting history suggests support in committee, with the Senate State & Local Government Committee recommending passage with amendments by a unanimous 9-0 vote. No committee transcript excerpts are provided, so there is no recorded floor or committee debate to indicate broader public or legislative sentiment beyond that favorable committee action. Overall, the bill appears to have been treated as a policy proposal aimed at expanding retirement savings access rather than as a highly divisive measure in the recorded vote.

Contention

The main points of contention are likely to be the scope of state involvement in retirement savings, the employer participation requirements, and the legal risk surrounding ERISA. The bill anticipates these concerns by requiring a legal analysis before implementation and by directing the board not to establish the plan if it would qualify as an ERISA employee benefit plan. Employers may also object to the administrative burden of payroll deductions and reporting, although the bill tries to reduce that burden by exempting employers with qualified plans and by stating that no employer contributions are required. Another notable issue is the bill’s restriction on local governments offering retirement plans to non-governmental workers, which could draw concern from local entities and independent contractors.