Updated: December 13, 2019
Issue: An October 2011 article in the Chicago Tribune highlighted the fact that some TRS members who go to work for statewide or national education organizations, including organized labor unions, retain their memberships in TRS and when they retire are eligible to use their union salaries and service time in the pension calculations set by law.
In 2007, two employees of the Illinois Federation of Teachers established TRS membership by obtaining a license and teaching in a classroom for the one day minimum prescribed by state law. Another statute, since repealed, allowed them — after they established TRS membership — to claim and add their service time as IFT staff prior to becoming TRS members to any IFT service credit they earned after becoming TRS members.
Discussion: In January 2012, former Governor Pat Quinn signed House Bill 3813 to address concerns about private organization employees in TRS, especially those who had not been teachers previously but used a state law to claim past employment service toward their TRS pensions. The law is Public Act 97–0651.
The law forbids these members from including any service time with the IFT prior to joining TRS in the calculations to determine their TRS pensions. They will be able to receive a TRS pension based on IFT service and salary after they became members of the System.
It was not a TRS decision to open membership to the employees of education unions or organizations. For decades, state law has allowed certain people who are not currently working in a public school system to be TRS members. Employees of the Illinois Association of School Boards have been allowed to participate in TRS since the 1940s. Employees of organized labor unions have been allowed to participate in TRS since 1987.
In 2011 there were 56 active or inactive members and 60 retired members in TRS who fell into this category. Out of 362,000 members, 116 members did not and do not affect the cost of the System to members and taxpayers, even though the average pension for these particular retired members was $100,089. The average pension that year for all 90,967 retired TRS members was $46,000. Currently, the average pension for all 124,299 TRS beneficiaries is $54,321.
Also, under current state law, these members must adhere to the rules that apply to all other TRS members:
- They must be certified by the State Board of Education.
- They must have established creditable service with TRS prior to taking a job with a union.
- They must pay the teacher contribution of 9 percent.
- If they receive an annual raise of more than 6 percent, and that salary is used in the calculation of their average salary, the employing organization must pay the added cost of the pension, just like a school district.
Post-retirement employment in a TRS-covered position is restricted, just as it is for other TRS members.
The union or outside organization pays more in contributions to TRS than school districts pay. The union must pay the entire “employer’s normal cost” of the member’s pension, which is comprised of the organization’s share and the state’s share. For all members employed by a school district, the district pays 0.58 percent of the normal cost and the state pays the remainder.