Pensions and Retirement Benefits - As introduced, allows a retirement allowance increase equal to the percentage increase in the consumer price index if there is an over-collection of state tax revenue; requires this allowance increase to be used instead of the allowance increase in present law, which cannot exceed 3 percent. - Amends TCA Section 8-36-701.

SB 1157 changes how retirement benefit increases are calculated for Tennessee pension recipients. It replaces the current 3% annual cap with a cost-of-living adjustment tied directly to the Consumer Price Index (CPI) increase, but only if state tax revenue exceeds budgeted amounts (over-collection) and the CPI rise is at least 0.5%. If the CPI increase is between 0.5% and 1%, it rounds up to 1%. This applies to retirees receiving benefits before July 1, 2025, though it excludes certain public employees unless their employer passes a resolution accepting the cost. The adjustment takes effect starting July 1, 2025, with annual determinations of over-collection made by November 1 each year.