Teachers’ Retirement System Early Retirement Option Extended
On June 28, the Governor signed Senate Bill 1366 (now Public Act 98-042) into law, extending the TRS early retirement option (“ERO”) for public school teachers and school administrators for another three years. Public Act 98-042 also significantly increased the required employee and employer contributions necessary for ERO to be available. For employees participating in the “new” ERO, the employer’s contribution will be 29.3% of the employee’s highest annual salary rate for each year the employee is under age 60. Further, employees will be required to contribute 14.4% of their highest annual salary rate for each year that they are under age 60 or have less than 35 years of service (whichever is less). These amounts are increased from the previous amounts of 23.5% and 11.5%, respectively. In addition, PA 98-042 now only permits ERO to be elected by an employee if the employee’s last employer before retirement grants the employee’s application. Nothing in the law requires employers to grant the employee’s application, though employers who elect to do so must adopt criteria with the “mutual consent” of the teachers’ union for the school district.