Age Retirement Annuity

A member is eligible to receive a monthly retirement annuity when he or she terminates active service covered by TRS and meets the following age and service requirements:

• age 62 with 5 years of service, or
• age 60 with 10 years of service, or
• age 55 with 20 years of service (discounted annuity), or
• age 55 with 35 years of service.*

* If the member is eligible to receive a retirement benefit of at least 74.6 percent of the final average salary and will reach age 55 between July 1 and December 31, he or she will be considered to have attained age 55 on the preceding June 1.

The retirement benefit is calculated by applying a statutory formula based on average salary and years of service. The salary used in the calculation is the average of the creditable earnings in the highest four consecutive years within the last 10 years of creditable service. For post-June 1998 service, this average salary is multiplied by 2.2 percent for each year of service.

For service earned before July 1998 that is not upgraded (see below), the average salary is multiplied by the applicable percentage according to the following formula:

• 1.67% for each of the first 10 years, plus
• 1.90% for each of the second 10 years, plus
• 2.10% for each of the third 10 years, plus
• 2.30% for each year over 30.

2.2 Upgrade

The member’s retirement benefit is determined by multiplying the final average salary times an accrual percentage times the total years of service. This accrual percentage is 2.2 percent per year for all service earned after June 30, 1998. For service earned before July 1998, the percentage varies based on a four-step formula, unless the member upgrades that service to the higher 2.2 percent accrual rate. However, if the member had at least 24 years of service on July 1, 1998, he/she will continue to receive 2.3 percent per year for years of service beyond 30 unless the member upgrades pre-July 1998 service to the 2.2 formula.

Maximum Benefit

The member’s age retirement annuity will not be more than 75 percent of the final average salary used in the calculation.

However, for members who began teaching before July 1, 2005, a higher benefit may be payable. If the sum of the retirement contributions made to TRS by the member with an additional assumed employer contribution plus the application of statutory interest would provide a greater monthly benefit, the greater benefit will be paid.

Early Retirement Option

A qualifying member may retire before age 60 with a nondiscounted annuity by making a contribution based on the member’s age or years of service and highest salary. The participating TRS-covered employer is also required to make a one-time contribution that cannot be passed on to the member.

Members who are age 55 or older and have more than 20 but fewer than 35 years of service can choose the Early Retirement Option (ERO) to avoid a discounted annuity. Under ERO, both the member and the employer have to make a one-time contribution.

The member contribution is 11.5 percent for each year under the age of 60 or number of years under 35 years of service, whichever is less. The employer (school district) contribution is 23.5 percent for each year the member is under age of 60.

Post-retirement Increases

Annuitants annually receive 3 percent increases in their annuities. The first annuity increase occurs on January 1 following the first anniversary in retirement or the attainment of age 61, whichever is later. The first monthly increase includes 3 percent for each year the member has been in retirement.

Disability Benefits

TRS offers occupational and nonoccupational temporary disability benefits to eligible members. TRS also offers a disability retirement annuity to eligible members.

A member, regardless of length of service, is eligible for an occupational disability benefit if the disability is the direct result of an injury that occurred while performing duties during TRS-covered employment. The benefit is equal to 60 percent of the annual salary minus any amount received from workers’ compensation.

A member with three years of creditable service is eligible for a nonoccupational disability benefit if the member becomes disabled while in active service or within 90 days of employment and is not receiving regular pay or sick leave pay. Part-time and substitute teachers must have worked at least 340 hours during the current or preceding school year to qualify. The benefit is equal to 40 percent of the annual salary.

When nonoccupational disability benefits expire, a member may be eligible for a disability retirement annuity or, if eligible based on years of service and age, an age retirement annuity. The disability retirement annuity is equal to 35 percent of the salary used in calculating disability benefits or the amount computed by the age retirement annuity formula, whichever is larger.

Individuals who have received any type of TRS disability benefits for one year or more may return to teaching, as defined in the Pension Code, if their medical conditions improve, allowing part-time work. The member is allowed on a limited basis to tutor, substitute, or part-time teach for a TRS-covered employer without loss of a disability benefit as long as the combined earnings from the teaching and disability benefit do not exceed 100 percent of the salary rate upon which the benefit was based. Individuals may continue to teach under this arrangement provided their disability precludes full-time employment.

Death Benefits

The designated beneficiaries of a member or an eligible annuitant will receive a survivor benefit upon the death of the member or annuitant. A lump-sum benefit is payable to nondependent beneficiaries. If all of the named beneficiaries are dependent beneficiaries, they may elect to receive a lump-sum benefit or a monthly benefit. A dependent beneficiary is a current spouse; an unmarried child who is a minor or full-time student between ages 18 and 22; an unmarried child of any age who is dependent by reason of a physical or mental disability and who is not receiving benefits under the Illinois Public Aid Code, Article III; or a dependent parent.

Benefit Forfeiture Due to Felony Conviction

Under state law, a TRS member or annuitant convicted of a felony in connection with his or her TRS-covered service forfeits all TRS benefits. A refund of member contributions (except contributions for survivor benefits) at the time of the forfeiture may be obtained by filing a request for refund. (See “Refunds.”)

Reciprocity

TRS is one of 13 Illinois public pension systems covered by the Illinois Retirement Systems Reciprocal Act [40 ILCS 5/20]. The Reciprocal Act allows one or more years of service credit earned through any reciprocal retirement system to be counted toward retirement. Each system pays a portion of the retirement benefits. The member generally receives a higher total retirement benefit by retiring under the Reciprocal Act than by retiring independently through each system. The reciprocal systems are:

• Teachers’ Retirement System of the State of Illinois
• County Employees’ Annuity and Benefit Fund of Cook County
• Forest Preserve District Employees’ Annuity and Benefit Fund of Cook County
• General Assembly Retirement System
• Illinois Municipal Retirement Fund
• Judges’ Retirement System
• Laborers’ Annuity and Benefit Fund of Chicago
• Municipal Employees’ Annuity and Benefit Fund of Chicago
• Park Employees’ Annuity and Benefit Fund of Chicago
• Public School Teachers’ Pension and Retirement Fund of Chicago
• Metropolitan Water Reclamation District Retirement Fund
• State Employees’ Retirement System of Illinois
• State Universities Retirement System

Benefit Payments

The following table shows average TRS monthly benefits and the number of individuals receiving TRS benefits as of June 30, 2007. TRS annuity payroll in June 2007 was $266 million.

Social Security and Medicare

TRS members do not contribute to Social Security on earnings from TRS-covered employment. Active members who began employment or changed employers after March 31, 1986 contribute 1.45 percent of salary to Medicare. During an election in spring 2004, eligible TRS members not currently contributing to Medicare received a one-time opportunity to begin contributing to Medicare with salary earned on or after July 1, 2004.

Some Social Security benefits may be reduced or eliminated due to receipt of TRS benefits, but TRS benefits are never reduced because of Social Security. Members should contact the Social Security Administration for more information.

Health Insurance

The Teachers’ Retirement Insurance Program (TRIP) administered by the Illinois Department of Central Management Services offers major medical and managed care coverage.

Enrollment in TRIP is open to:

• any TRS annuitant who has eight or more years of service credit and is receiving a monthly retirement benefit.
• any beneficiary who is receiving a survivor benefit on account of a deceased TRS member who had eight or more years of service credit.
• any TRS member who is receiving a disability benefit, regardless of the years of service credit.

The Teachers’ Choice Health Plan (TCHP) is the major medical plan in which annuitants may enroll regardless of locale. Some annuitants may choose enrollment in a health maintenance organization (HMO). HMOs are located throughout Illinois and in neighboring counties in some surrounding states. The annuitant’s place of residence determines HMO availability.

The subsidy payment is based on HMO availability. Annuitants enrolling in an HMO or residing in areas with no HMO accessibility receive a 75 percent premium subsidy. Annuitants who choose to enroll in the major medical plan that live in an HMO-accessible area receive a 50 percent premium subsidy.

Refunds

After a four-month waiting period, a member who terminates TRS-covered employment for any reason other than death or retirement may apply for a refund of retirement contributions. The refund does not include interest or contributions for survivor benefits. A member who receives a refund forfeits all rights to benefits from TRS. Receipt of the refund also cancels all service credit with TRS.

A member who has no dependent beneficiaries may apply for a refund of survivor benefit contributions without interest when he or she applies for a retirement annuity or while receiving a retirement annuity. A member who receives a refund of survivor benefit contributions waives all rights to beneficiaries receiving survivor benefits. However, any remaining accumulated retirement contributions still remain payable to the beneficiaries upon the member’s death.

A member who retires without using the Early Retirement Option and who has made contributions of 0.4 percent of pay after June 30, 2005 will receive a refund of those ERO contributions without interest.

Repayment of Refunds

After completing one year of teaching in a TRS-covered position or two years in a reciprocal system, a member may reinstate previously earned and refunded service credit by repaying the retirement contribution refund he or she received plus interest from the date of the refund to the date of repayment. The survivor benefit refund may be repaid only if the annuitant returns to active TRS service and earns at least one year of service credit.

Service Credit

A member is granted one year of service credit for 170 paid days but not more than one year of credit during any fiscal year ending June 30.

Optional Service Credit

Members may purchase optional service credit by meeting certain requirements and making the required contribution to TRS. Optional service credit is available for:

• out-of-system teaching
• part-time teaching
• military service
• leave of absence and layoff
• substitute and homebound teaching
• service canceled by a refund
• absence prior to July 1, 1983, due to pregnancy or adoption

Sick Leave

A member may receive up to two years of service credit at retirement for 340 or more unused and uncompensated sick leave days.

Member Services

Various methods are available for obtaining information about TRS benefits. A member may write, visit, e-mail, or call TRS. TRS also provides individual conferences, group meetings, exhibits at conferences and institutes, and telephone conferences. A 24-hour Forms Order Line is also available to take requests for forms and publications; call Member Services at (800) 877-7896 and press “2” when prompted. The TRS Web site, trs.illinois.gov, is continuously being updated and expanded.

Confidentiality

TRS member information is confidential. Disclosure is limited to the member, to a third party (including attorneys) only with the member’s written authorization, in response to a subpoena, for purposes connected with TRS’s official responsibility, to other reciprocal systems, to CMS for annuitant health insurance purposes, and to the Social Security Administration for Government Pension Offset determination and Windfall Elimination Provision purposes. Information requests related to the divorce of a TRS member or annuitant should be directed to the TRS Counseling Services Department. Subpoenas should be directed to the TRS General Counsel’s Office.

Administrative Review

Any member, beneficiary, annuitant, or employer may appeal a TRS staff disposition of a claim or interpretation of the Illinois Pension Code to the TRS Board of Trustees Claims Hearing Committee within six months of the staff disposition or interpretation. An appeal is initiated by sending a written request for an administrative review to the TRS executive director. Contact the TRS General Counsel’s Office for further information about administrative reviews.

TRS Benefits Report

Each December, TRS members are mailed a TRS Benefits Report. The report details retirement contributions; beneficiary information; estimated retirement benefits for members close to retirement; sick leave days reported from former employers; 2.2 upgrade information; reciprocal, refunded and optional service; and a comprehensive earnings history.

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