Teachers' Retirement System reviews Tier 2 pension rules, disability and survivor benefits, and post-retirement limits

Sandy Benhart, an outreach coordinator at the Teachers' Retirement System, told a Tier 2 member information session that TRS administers a defined-benefit pension for Illinois public educators and explained the rules that determine eligibility, benefit size and post-retirement limits.

Benhart said Tier 2 membership is determined by whether a member's first public-pension contribution date was on or after Jan. 1, 2011. Members contribute 9% of gross earnings to TRS; that contribution funds retiree benefits, survivor benefits and disability coverage. A regular (unreduced) Tier 2 retirement is age 67 with at least 10 years of service credit. Members may retire as early as age 62 with at least 10 years of service, but retiring before 67 carries an age reduction that Benhart described as roughly 6% per year under age 67 (calculated daily).

TRS calculates an initial monthly pension by multiplying years of service credit by a formula factor (2.2%) and applying that percentage to a member’s final average salary, defined as the average of the eight highest consecutive salary years within the member's last 10 years. Benhart gave an example: a member with 30 years of service and a final average salary of $85,000 would have a starting pension equal to 66% of that salary ($56,100 per year, about $4,675 per month). She said the statutory maximum pension is roughly 75% of final average salary, reached at about 34…