(a) The general assembly finds and declares that the public policy of this state is that no public official or employee shall have multiple memberships in any retirement program or programs financed from public funds, whereby such official or employee obtains or accrues pensions or retirement benefits based upon the same period of service to the state, or any branch, department, agency or institution thereof, or to any of its political subdivisions. This section shall be construed to implement this policy.

(b) “Public employee retirement system,” as used in this section, includes any political subdivision retirement system, but does not include the following:

(1) The Social Security Act (42 U.S.C. §§ 301-1397f) or any other federal retirement program;

(2) A local retirement system as provided for in part 3 of this chapter; or

(3)

(A) Any tax deferred retirement plan wherein total combined employer contributions to such plans, other than those made pursuant to a salary reduction agreement, do not exceed three percent (3%) of the employee's salary. Notwithstanding any other law to the contrary, an employer maintaining a tax deferred retirement plan shall not permit contributions to that plan which would exceed the limitations of the Internal Revenue Code (26 U.S.C.)

(B) All tax deferred retirement plans established by public employers participating in the state retirement system, wherein employer contributions are made, must be approved by the director of the state retirement system.

(c) Except as provided in part 3 of this chapter, no person shall be eligible for membership in the consolidated retirement system if such person holds membership in any other public employee retirement system into which such person is making a contribution or accumulating creditable service based upon the same service that would entitle such person to membership in the consolidated retirement system; provided, that if such person receives compensation from two (2) or more governmental entities because of the statutory provisions of such person's office, such person is eligible for membership in this system, with benefits based upon the proportion of such person's compensation upon which contributions are not made to the other retirement system.

(d) If any person is eligible for membership in more than one (1) state, county or municipal retirement program for the same service, such person shall, within sixty (60) days from June 30, 1975, select the retirement program in which the person will participate or be excluded from the state retirement system. When such person has made contributions into an additional retirement system from which the person elects to withdraw the person's membership under this section, such person may, upon request, be reimbursed any contributions made by such person into the additional system, plus interest compounded annually in an amount to be determined by the board of trustees; provided, that if such person has received benefit payments in excess of such contributions, no reimbursement shall be made.

(e)

(1) Any member of more than one (1) superseded system shall be eligible for benefits in each such system, so long as such member's benefits in each system are based upon the proportionate part of such member's compensation received from the sources which qualified such member for such membership because of the statutory provisions of such member's office, even though the services may have been simultaneous.

(2) Such person shall be entitled to any unimpaired vested rights and benefits existing under such other system, but no period of time of such vested rights under another public employee retirement system shall be considered creditable service in the consolidated retirement system or any superseded system, except as provided in this section.

(f) The total retirement allowances received by any person from multiple public employee retirement systems shall not exceed one hundred percent (100%) of the person's average final compensation. This section shall not be construed to prevent any increase in such retirement allowance when such increase is in accordance with § 8-36-701.

(g) The total retirement allowances of any teacher under part 3 of this chapter received from the local teachers' retirement system and the state annuity received from the Tennessee consolidated retirement system shall not exceed one hundred percent (100%) of the teacher's final average compensation. This section shall not be construed to prevent any increase in such retirement allowance when such increase is in accordance with § 8-36-701.