Pensions and Retirement Benefits - As enacted, requires the TCRS board of trustees to divest the retirement system from investment activity it has in a company known to be majority-owned by China; requires a local governing body to divest its political subdivision pension plan from investment activity it has in a company known to be majority-owned by China. - Amends TCA Title 9, Chapter 4, Part 15.

SB 542 requires Tennessee's state retirement system (TCRS) and local government pension plans to sell investments in companies majority-owned by China (as defined by publicly available information), including entities tied to the Chinese government or military. It mandates annual reviews by January 15 to identify such "restricted investments" and requires full divestment by December 31 each year, or a written plan if immediate divestment isn't feasible. The law applies specifically to direct holdings (securities held directly by pension funds) and includes protections against civil liability for officials following the policy. This affects TCRS and all local political subdivision pension plans under Tennessee law.