Updated October 7, 2026. Quick answer: A Metro Nashville Division B employee who retires picks one payment option, and the guide says the choice is permanent once the Benefit Board approves it. The Normal Form pays the most and leaves a survivor nothing, while Option A continues the same amount and Option B one half for life. Retirees with at least 25 years of service on a normal pension can request a DROP lump sum of one, two or three years of pension, which permanently lowers the monthly check. Metro pays the whole cost, so employees make no contributions. This page covers Division B only.
What this page covers and what it does not
This page works from two documents published by the Metropolitan Government of Nashville and Davidson County: the Human Resources Retirement Guide for Division B (January 1, 2023 edition) and the Metro Employee Benefit Handbook (January 1, 2021 edition), both read on October 7, 2026. The documents describe a Division A and a Division B, not a Classic or Hybrid plan.
The retirement guide states: “The eligibility guidelines and calculations in this guide describe Division B, the Modified Metro Plan, in effect since January 1996.” The handbook adds that the plan covers “employees hired July 1995 and later and employees who made an election to transfer to Division B”. For anyone else the guide says: “If you are a member of Division A, please contact Metro Human Resources for answers to your specific questions.”
Inside Division B there are two plan groups. The guide places correctional officers and park rangers in the Police and Fire plan, and says “All other employees are in the General Government pension plan”. Teachers at Metro Nashville Public Schools are not covered here, and state tax questions are on Tennessee retirement taxes and does Tennessee tax pensions.
“If there is a difference between this overview and the official plan documents, the plan documents will govern.”
Who pays, and what vesting means
The guide says that “Metro pays 100% of the cost of the service pension plan”, and that “You make no contributions to the plan”. The pages read do not describe a refund process, so the refund question is left open below. The general trade-off is covered on pension refund versus leaving it.
The right to a benefit comes from vesting. The guide lists two rules: “10-year vesting for employees (and non-vested employees rehired) on/after January 1, 2013”, and “5-year vesting for employees employed on or between October 1, 2001 and December 31, 2012 who vest before leaving employment”. Confirm with Metro Human Resources which rule applies to a given hire date.
When a pension can start
The guide sets separate tests for the two plan groups. The table restates them as printed.
| Plan group | Eligibility |
|---|---|
| General Government, normal | Age 60 with age plus service equal to 85 points, or age 65 with 5 years of service |
| General Government, early | At least age 50 with 10 years of service, reduced |
| Police and Fire, normal | Age 53 with age plus service equal to 75 points, or age 60 with 5 years of service |
| Police and Fire, early | At least age 45 with 10 years of service, reduced |
The guide notes that a General Government member who is 58 with 27 years of service has 85 points but must also be at least 60 to avoid the early reduction.
Retiring early, and what the reduction does
An early pension is available at the ages above, and the guide states the price: “4% per year for each of the first 5 years and 8% per year for each year over 5 years that you retire early.” It does not reverse: “If you take early retirement, your pension will always be a reduced benefit.” “It does not go back up to the full amount once you reach your unreduced retirement age.”
A computed example from an assumed final average earnings of $40,000 and an assumed 20 years of credited service, not a Metro member’s figures: the General Government formula in the guide is 1.75 percent times final average earnings times years of credited service, which gives a computed $14,000 a year, or $1,167 a month, at normal retirement. Retiring 3 years before age 60 reduces that by 3 times 4 percent, a computed 12 percent, a cut of $1,680 and an annual benefit of $12,320. Retiring 7 years early would be 4 percent for each of the first 5 years and 8 percent for 2 more, a computed 36 percent.
How the benefit is calculated
The guide defines the earnings input this way: “Final Average Earnings is your earnings for the highest 60 consecutive months worked at Metro, divided by five years.” The table restates the formulas as printed.
| Plan group | Annual normal retirement benefit |
|---|---|
| General Government | 1.75% x final average earnings x years of credited service |
| Police and Fire, first 25 years | 2.0% x final average earnings x years of credited service up to 25 |
| Police and Fire, beyond 25 years | 1.75% x final average earnings x years of credited service over 25 |
Unused sick leave counts toward credited service: “For every 20 days of unused sick leave you have, it is equal to one month of credited service.” For service that was interrupted, “After being reemployed with Metro for one continuous year (working at least 20 or more hours a week), you may be allowed to connect your prior service.” Reconnecting has a cost: “you will need to make arrangements to pay back any pension contributions (plus interest) that you might have received when you quit Metro or any contributions owed for the time being connected”. Whether reconnecting pays is on the pension buyback calculator.
Leaving before you can retire: the deferred pension
A vested employee who leaves before a normal retirement date has a choice. The guide says that without an immediate early pension, “your pension will be postponed until you reach your normal retirement age”. The catch is one-way: “you elect to defer your pension until your unreduced retirement date, you will not be able to later take an early pension”. The handbook puts a duty on the member: “it is your responsibility to contact Metro Human Resources in advance of your retirement age to begin this process”. It gives the window as “as early as age 60 and no later than age 65” for General Government, or “as early as age 53 and no later than age 60” for Police and Fire, depending on total credited service.
The election: payment options and one permanent choice
The retirement choice with the largest long-term effect is the payment option. The guide says “At retirement, you have the option to elect a survivor benefit for your spouse or someone else you select”, and warns “Remember that electing a survivor benefit will reduce the amount of pension that you draw during your lifetime”. “That reduction is based on your age and the age of the beneficiary you select, and is a permanent election.” “The payment option you choose at retirement cannot be changed once the Benefit Board approves your benefit payment option.”
| Option | What the retiree receives | What a survivor receives |
|---|---|---|
| Normal Form | The greatest monthly benefit, since there is no survivor option | No pension benefits for a surviving beneficiary |
| Option A | Reduced for a survivor, with the amount depending on the ages | The same amount paid to the retiree, for life |
| Option B | Reduced for a survivor, with the amount depending on the ages | One half of the amount paid to the retiree, for life |
| Option C | A monthly benefit higher than the Normal Form until an age between 62 and 65, then a reduced benefit for life | No survivor benefit |
| Option D | A benefit for life | The same amount only if the retiree dies before 120 months have been paid, up to 120 months |
| Option E | As Option A, with a pop-up if the survivor dies first | The same amount the retiree received at death |
| Option F | As Option B, with a pop-up if the survivor dies first | One half of the amount paid at death |
The documents read do not print the percentage by which any option reduces the retiree’s check; the guide says only that the reduction is based on the ages of the retiree and the beneficiary. The trade-off between a single check and a survivor check is covered on single-life versus joint-and-survivor pension.
What each option does for a survivor
The Normal Form leaves a survivor nothing: “a surviving beneficiary will not receive any pension benefits”. Option C is a bridge to Social Security. “This option allows for a monthly benefit higher than the Normal Form, payable to you during your lifetime until an age between 62 and 65, and a reduced optional benefit payable thereafter for life.” The same section says “There is no survivor benefit with this option”, and the document list for the application meeting includes a “Social Security estimate of earnings, if considering Option C”.
Option D is a guarantee period, and “If you die after Metro has paid you a pension for 10 years (or 120 months), your beneficiary will not receive a pension”. Options E and F add a pop-up to A and B: “should your surviving beneficiary predecease you, your benefit would pop up to the non-option normal form benefit”.
A computed example from an assumed $1,500 monthly benefit under the chosen option, not a Metro figure: under Option B, one half of $1,500 is a computed $750 a month for the survivor for life. The $1,500 is an assumption, since the reduction for the option is not published in the documents read; a real quote must come from Metro Human Resources. Spouse consent rules for a retirement election are not described in the documents read; see survivor benefit with a government pension for the general survivor mechanics.
Survivor pensions before retirement
The guide treats death before retirement separately from the election. “The legal spouse, domestic partner (where a Declaration of Domestic Partnership already exists on file with Metro Human Resources) or dependent child of a vested, active employee is entitled to a monthly survivor pension at the time of the active employee’s death.” A vested former employee is covered too: “your legal spouse/domestic partner or dependent child is entitled to an immediate monthly survivor pension”. The handbook words the child as a “minor dependent child(ren)”, while the guide says dependent child, so the age cutoff and the amount are matters to confirm with Metro Human Resources.
The DROP lump sum: what it is and who can use it
Division B has a lump-sum feature called the Deferred Retirement Option Plan, or DROP. The guide says it is “available to employees who have at least 25 years of service and are retiring with a normal pension benefit”. “The DROP Plan is not available to those who retire early, are on a disability pension or are receiving a survivor benefit.”
Here is how the guide describes the amount: “you can request a DROP payment equal to one, two, or three year’s worth of your monthly pension payment (the actual calculation depends on your life expectancy and other factors)”. The cost: “Metro will subtract the amount of the lump sum payment from your normal pension benefit, which will permanently reduce your monthly pension benefit.” The guide says that “the total value of your pension benefit over your life expectancy remains the same, but your monthly benefit will be permanently reduced”. It also says the reduction reaches survivors: “Any monthly pension benefits available to you or your beneficiary will be reduced to reflect the amount of the DROP lump sum.”
Cost of living adjustments are affected too: “Your annual cost of living increases are based on your initial monthly benefit”, and so “the cost of living allowance will be based on a lower benefit and will be less”. The guide also warns that “once you spend the lump sum you receive, it’s gone”. The guide says that Metro’s pension plan uses an assumed interest rate of 8 percent, and that this “may help your financial advisor determine if taking the DROP, or leaving the money in, makes more sense”. The general comparison is covered on 20% withholding on a pension lump sum.
Taking the DROP: withholding, rollover and early withdrawal
The guide spells out the tax mechanics. “The IRS requires that Metro withhold 20% in Federal Income taxes from the amount of the lump sum.” Rolling over is possible: “it may be rolled over to your 457 Deferred Compensation Plan, IRA or other qualified plan”. “You may also elect to rollover all, or a portion, of the lump sum payment.” Anyone electing a rollover has a paperwork step, since “you must bring the Rollover Election Form completed by your Plan Administrator to this appointment”.
Early-withdrawal penalties depend on where the money goes. The guide says “If you retire in a year before you turn age 55, your payment may be subject to a 10% tax penalty for early withdrawal”. For rollovers it says “Money rolled over to your 457 plan will be subject to the 10% penalty if it is withdrawn as a single sum before the year in which you turn age 55”, while “money rolled over to an IRA will be subject to the 10% penalty if it is withdrawn as a single sum prior to the age of 59 ½”.
A computed example from an assumed $1,500 monthly benefit and a DROP payment of two years, not Metro’s calculation (the guide says the actual calculation depends on life expectancy and other factors): 24 months times $1,500 is a computed $36,000. Federal withholding of 20 percent of that would be a computed $7,200, leaving $28,800 paid directly to the retiree before any other tax. A direct rollover avoids the withholding. The monthly check afterward is lower by an amount the guide does not publish, so the example does not estimate it.
The last paycheck, COLA and working again
Several last-paycheck choices affect the pension. Unused vacation is paid as a lump sum or run out day by day; the guide says the lump sum “will not be included in your pension earnings”, and that it may be rolled over by “rolling over the vacation lump sum into your 457 Deferred Compensation plan”.
Timing is slow. The guide says “you will need to contact Metro Human Resources at least 6 weeks before your anticipated retirement date or your last day on the payroll”, and “you should plan for a period of 4-6 weeks before receiving your first pension check”. Planning for that gap belongs in the decision.
“All of Metro’s service pension plans have a built-in cost of living adjustment (COLA) to help protect your income from the effects of inflation.” The pages read do not state a cap or a percentage. Working again for Metro matters too: “If you work fewer than 20 hours per week, it will not affect your pension benefits or status for other Metro insurance benefits.” On the other side, “Your pension will stop and you will become an active employee again.”
“Service pensions are considered taxable income.”
What the IRS adds on tax
A refund or lump sum from a public pension is a distribution, so the IRS rules apply on top of Metro’s own. On withholding, the IRS says that a taxable eligible rollover distribution paid to you “is subject to mandatory income tax withholding (generally at a rate of 20%), even if you intend to roll it over later”, and that if you roll it over yourself “you’ll have to add funds from other sources equal to the amount withheld”. The guide itself describes the DROP lump sum as eligible for rollover and as subject to 20% withholding when paid to the member. The rollover clock, if the money is paid to you: “you have 60 days from the date you receive it to roll it over to another eligible retirement plan”.
On early distributions the IRS says “the law imposes a 10% additional tax on certain early distributions from certain retirement plans”. Its list of exceptions includes “Distributions made to you after you separated from service with your employer after attainment of age 55” and “Distributions made to a qualified public safety employee from a governmental plan” if the employee separated from service during or after the year they attained age 50 or 25 years of service under the plan, whichever is earlier. Whether an exception fits a particular refund depends on your own plan and facts, so confirm it with a tax preparer before you take one.
What this page could not settle
- The documents read do not state how much Option A, B, C, D, E or F reduces the monthly benefit; the guide says only that the reduction is based on the ages of the retiree and the beneficiary.
- The pages read do not describe a refund or withdrawal process, and they state that members make no contributions to the plan. Whether a contribution refund exists for any group was not settled.
- Division A was not described in either document, and neither uses the names Classic Plan or Hybrid Plan.
- The pages read do not give a COLA percentage, cap or formula, and do not state the age at which a survivor child stops being eligible.
- The pages read do not state whether a spouse must consent to the payment option chosen.
- The Metro Code provisions, the disability pension rules and retiree health insurance were not read for this page.
Common mistakes
- Treating the payment option as changeable later; the guide says it cannot be changed once the Benefit Board approves it.
- Taking the DROP lump sum without weighing that the monthly pension is permanently reduced, along with any survivor benefit and later cost of living adjustments.
- Assuming a refund of contributions is available; the guide says members make no contributions to the service pension plan.
- Deferring a pension when early retirement was available, then expecting to take it early later; the guide says that choice cannot be reversed.
Related on this site: Tennessee retirement taxes, does Tennessee tax pensions, Tennessee TCRS retirement decisions, pension refund versus leaving it, single-life versus joint-and-survivor pension, pension buyback calculator, 20% withholding on a pension lump sum, survivor benefit with a government pension and public pension retirement decisions by system.
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Answer againSources
- Metropolitan Government of Nashville and Davidson County Human Resources, Retirement Guide Division B (January 1, 2023): https://nashville.gov/sites/default/files/2022-10/RetirementGuide_DivB2023.pdf
- Metropolitan Government of Nashville and Davidson County, Metro Employee Benefit Handbook (January 1, 2021): https://filetransfer.nashville.gov/portals/0/sitecontent/HumanResources/docs/EmployeeBenefits/Employee%20Handbook%20v2021-0101.pdf
- IRS, Topic no. 413, Rollovers from retirement plans (irs.gov): https://www.irs.gov/taxtopics/tc413
- IRS, Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs (irs.gov): https://www.irs.gov/taxtopics/tc558
Sources: the primary documents linked above, read on October 7, 2026. General information from each system’s own published materials, not legal, tax or financial advice. Your own member statement and the system’s current rules decide your benefit, and a pension counsellor at the system or a fee-only adviser is the right place to confirm anything consequential.