Public Act 94-0004, signed into law in June 2005, requires employer contributions for salary increases in excess of 6 percent. When a member retires, the employer is required to pay TRS contributions equal to the actuarial value of a pension benefit that results from any salary increase over 6 percent that is used in a retiring member’s final average salary calculation.
Public Act 100-0587 lowers the 6 percent threshold to 3 percent after July 1, 2018. The threshold will remain at 6 percent for salary increases awarded under contracts or collective bargaining agreements (CBAs) entered into, amended, or renewed prior to June 4, 2018.
Read Chapter 8, Excess Costs to learn more about employer costs for salary increases in excess of the 3 or 6 percent thresholds.
To estimate an excess salary, use the Excess Salary Increase Calculator.