April 14, 2010 (PLANSPONSOR.com) – Illinois Governor Pat Quinn has signed pension reform legislation into law that creates a two-tier pension system for educators covered by the state’s Teachers’ Retirement System (TRS).
A TRS news release said Senate Bill 1946 will change the pension and benefit structure for teachers and administrators who are initially hired to a TRS-covered position on or after January 1, 2011. The new law will not affect the current pension and benefit structure of TRS members who were TRS members prior to January.
Major provisions of the new law extend the age at which TRS members can retire with full benefits from 62 to 67; place a $106,800 cap on a member’s pensionable salary when that salary is used to determine retirement benefits; tie the annual cost-of-living adjustment in pension benefits to the consumer price index; and tighten restrictions on retired TRS members who go to work full time for an employer covered by a pension system with reciprocal rights to TRS.
“These changes in the State of Illinois’ pension law are the most extensive amendments that we’ve ever seen,” said Stan Rupnik, acting executive director of TRS, in the news release. “Our current members will see no changes in the structure of their pensions or eligibility forretirement. But we anticipate there will be plenty of questions from potential and future members about the new structure during the next eight months as teachers try to determine what benefits they will receive.”
The current pension structure also will remain in place for any person who has service credits with a pension system that has reciprocal rights with TRS, even if that person starts accumulating TRS service credit after January 1, 2011. For example, a former state worker with credits in State Employees’ Retirement System who becomes a teacher in 2011 will be covered by the current pension structure.
The Teachers’ Retirement System currently has more than 365,000 members.
More information is at http://trs.illinois.gov.