The Proposed Increases of the TRS Contribution Rate

The Proposed Increases of the Contribution Rate to 11.4 Percent Would Give Illinois the Notorious Distinction of #1 Rank in the Nation for Teachers’ Pension Contributions.

To shift the employer’s cost to school districts would add ironical insult as well. “NEA has taken the position that employee contributions should not ‘exceed the amount contributed by employers’ although the ‘employer may pay part or all of the employee contribution’” (NationalEducation Association Collective Bargaining and Member Advocacy, 2010).

A sample of some of the highest rates in the nation for teachers (2010):

Ohio/STRS-DB Plan: 10%

Kentucky/TRS: 9.85
Illinois/TRS: 9.4%
Louisiana/TRS-Plan A: 9.1%
Alaska/TRS-DB Plan: 8.65%
California/STRS: 8%
Louisiana/TRS-Regular Plan: 8%
Montana/TRS: 7.15%
Oklahoma/TRS: 7%
Maryland/TRS: 7 or 5%

A sample of some of the Lowest rates in the nation for teachers (2010):

New York/STRS-Tiers 1 & 2: None

New York/New York City/TRS: None, 1.85%, or 3%
New York/STRS-Tiers 3 & 4: 3%
Indiana/TRF: 3%
Washington/TRS-Plan 3: 5 to 15%
Vermont/STRS-Group C: 3.54%
Washington/TRS-Plan 2: 4.26%
Alabama/TRS: 5%
Louisiana/TRS-Plan B: 5%
Massachusetts/TRS: 5 to 11%
Georgia/TRS: 5.25%
Minnesota/TRA: 5.5%
Vermont/STRS-Group A: 5.5%
Connecticut/TRS: 6%
Washington/TRS-Plan 1: 6%
West Virginia/TRS: 6%
Texas/TRS: 6.4%

The complete table of contribution rates includes 126 state plans.
Out of the 126 state plans charted, Illinois would be ranked 1^st among state-sponsored teacher plans at 11.4% and ranked in the top five among all plans:

Illinois/TRS: 11.4% (proposed by current pension reform)

Massachusetts/SERS: 5 to 12% (varies by group and hire date)
Missouri/PSRS: 13%
Washington/PERS-Plan 3: 5 to 15%
Washington/SERS-Plan 3: 5 to 15%

The History of the Teachers’ Retirement System of Illinois – Contributions Rates:

1939: 4%
1947: 5%
1953: 6%
1959: 7%
1969: 7.5%
1971: 8%
1998: 9%
2005: 9.4% (7.5% for retirement annuities, 1% for death benefits, 0.5% for COLA, and 0.4% for Early Retirement Option (ERO))

Every past contribution increase was considered a benefit enhancement.

Additional notes:
Most of the 126 state plans also provide Social Security for public employees. Only teachers in Alaska, California, Connecticut, Illinois, Kentucky, Louisiana, Massachusetts, and Ohio are without full Social Security benefits.

A retirement age of 67 in Illinois would be the highest in the country. The majority of states use the entry-age normal actuarial method. Illinois uses the projected-unit credit actuarial method. The entry-age normal actuarial method is considered the better choice for ensuring fiscal integrity of a pension system.