Pension Basics Every Illinois School Employee Should Know

If you are employed in an Illinois public school, your retirement benefits will likely be provided by either the Teachers’ Retirement System (TRS) or the Illinois Municipal Retirement Fund (IMRF). These pension systems serve as the foundation of financial security for school employees, regardless of their role, whether they are in the classroom, the front office, or responsible for maintaining school facilities. Here is essential information for every public school employee regarding their pension:

What Are TRS and IMRF?

TRS (Teachers’ Retirement System): This system covers licensed educators and certified staff employed in Illinois public schools outside of Chicago.

IMRF (Illinois Municipal Retirement Fund): This system covers a wide range of non-certified school employees, including paraprofessionals, custodians, clerical staff, and other support personnel.

Both TRS and IMRF are designed to provide lifelong retirement income, as well as disability and survivor benefits for you and your family.

Why Pensions Matter for School Employees

Most Illinois public school employees do not receive Social Security benefits for their school employment. Consequently, your TRS or IMRF pension may be your primary source of retirement income, making it crucial to comprehend its workings.

How Contributions Work

Both TRS and IMRF are funded by:

Your contributions (a fixed percentage of your paycheck)
Employer contributions (state or school district)
Investment earnings from the pension trust fund

In return, you will receive a monthly check for life upon retirement.

Vesting: When You Earn Benefits

To qualify for a pension, you must work for a sufficient period to “vest.”

TRS: 5 years of service if you started before 2011 (Tier 1), or 10 years if hired in 2011 or later (Tier 2).

IMRF: You become vested after 10 years of service credit.

How Pensions Are Calculated

While details differ between TRS and IMRF, the general formula is similar:

Years of Service × Final Average Salary × Multiplier = Annual Pension
Final Average Salary is usually based on your highest consecutive years of earnings.
Multiplier determines how much credit you earn per year of service (for TRS, generally 2.2%; IMRF ranges by plan).

Example (TRS):

30 years × $60,000 final average salary × 2.2% = $39,600/year pension.

Retirement Age

TRS Tier 1: Full retirement at age 60 with 10 years of service, or age 62 with 5 years.
TRS Tier 2: Full retirement at age 67 with 10 years of service.
IMRF Regular Tier 1: Full retirement at age 60 with 8 years of service, or age 55 with reduced benefits.
IMRF Regular Tier 2: Full retirement at age 67 with 10 years of service.

Cost-of-Living Adjustments (COLA)

TRS Tier 1: 3% compounded annually.
TRS Tier 2: 3% or half of inflation (whichever is less), simple interest.
IMRF Tier 1: 3% annually, simple interest.
IMRF Tier 2: Lesser of 3% or half of inflation, simple interest.

Survivor and Disability Benefits

Both TRS and IMRF provide:

Survivor benefits to spouses or dependents if you pass away.
Disability benefits if illness or injury prevents you from working.

Why This Matters for All School Employees

Regardless of your role, whether you are a teacher, bus driver, office worker, or cafeteria attendant, your pension serves as the cornerstone of your financial future. Understanding the fundamental aspects of your pension plan empowers you to:

Estimate your retirement income accurately.
Determine whether to acquire additional service credit.
Coordinate with other retirement savings plans, such as 403(b), 457(b), and IRAs.
Plan your retirement with confidence and certainty.

For Illinois school employees, pensions are not merely a benefit; they are your retirement plan. By acquiring a comprehensive understanding of TRS or IMRF today, you gain control over your financial future, irrespective of your position within the school system.

We eagerly anticipate our forthcoming post titled “TRS and IMRF Tier Differences: Implications for Your Retirement.”

Illinois school employees, pensions aren’t just a benefit—they’re your retirement plan. Learning the basics of TRS or IMRF today will put you in control of your financial future, no matter your role in the school system.