Automatic Enrollment Implementation
Is automatic enrollment permissible under law?
Yes
Explanation:
Automatic enrollment is permitted for all public employees participating in the state’s deferred or tax sheltered compensation programs, if implemented by the state retirement board.
Relevant State Laws – Tenn. Code Ann. § 8-25-104(d), § 8-25-111
“Notwithstanding any law to the contrary, the chair of the consolidated retirement board, with the concurrence of the commissioner of finance and administration, has the authority to implement an automatic deferred or tax-sheltered compensation plan. Such plan shall provide that any person who becomes a full-time state employee on or after the implementation date of the plan, including a full-time employee of an institution of higher education, who is eligible to participate in one of the deferred or tax sheltered compensation plans established pursuant to parts 1 or 3 of this chapter shall participate in at least one of the plans as a condition of employment, unless such employee files with that person’s employer a notice of that person’s election not to participate.” Tenn. Code Ann. § 8-25-104(d)
“Notwithstanding any law to the contrary, any [political subdivision] may elect to become a participating employer in any deferred compensation program established on behalf of state employees under this part or under part 3 of this chapter; provided, that such participation shall be subject to the approval of the chair of the Tennessee consolidated retirement system and in conformity with such terms and conditions as may be prescribed by the chair.” Tenn. Code Ann. § 8-25-111