Main Content

Chapter Three: Earnings

Your earnings help to determine the amount of your future pension benefit and are the basis upon which TRS retirement contributions are determined.

Creditable earnings

We recognize the following forms of compensation as creditable earnings:

  • salary you earn for:

    • regular contractual teaching duties;

    • extra-duty earnings:

    • contractual teachers: extra duties related to teaching or the academic program, or involving supervision of students
    • noncontractual teachers: only extra duties requiring teacher licensure

    • substitute teaching;

    • teaching that is completed after school hours, such as night school or driver education; and

    • homebound teaching.

  • stipends paid to administrators for serving as a school board officer or clerk.
  • longevity stipends.
  • bonuses.
  • wages while using vacation, sick leave, and personal leave.
  • employer-paid TRS contributions for members.
  • contributions to tax-sheltered annuities under the Internal Revenue Code, Section 403(b) or to a qualified tax-deferred compensation plan under the Internal Revenue Code, Sections 457(b) or 401(a).
  • contributions to a flexible benefit plan. A “flexible benefit plan” is an option offered by an employer to employees who are covered under TRS to receive cash or contributions to a 403(b) tax-sheltered annuity or 457(b) deferred compensation plan in lieu of employer-provided insurance.
  • payments made by your employer for the purchase of optional service credit. To be reportable as creditable earnings, the payments must be paid or due and payable along with or prior to your final paycheck for regular earnings.
  • payments made by your employer for your 2.2 upgrade. To be reportable as creditable earnings, the payments must be paid or due and payable along with or prior to your final paycheck for regular earnings.
  • salary or backwage payments resulting from contract buyouts, labor litigation, and settlement agreements.
  • retirement incentives and severance payments, including payments for accumulated vacation and sick leave, that are paid or due and payable along with or prior to your final paycheck for regular earnings.
  • regional superintendent stipends paid from county funds.
  • stipend paid for becoming National Board Certified.
  • honorariums paid to union officers.
  • gift cards given in lieu of payments that qualify as salary.

Summer earnings

Summer earnings are reportable to TRS on the same basis as employment during the regular school term.

Summer-school teaching and summer extra duties that require teacher licensure are reportable as creditable earnings. For full-time and part-time contractual teachers, summer extra duties involving supervising students and summer duties related to the academic program are also reportable as creditable earnings.

Active military duty

Since the 2000-2001 school year, members called to active military duty receive full earnings and TRS service credit while on active duty without paying any contributions.

Limitations

Individuals who become TRS members on or after July 1, 1996, receive credit for earnings up to the annual amount allowed by federal law.

Noncreditable earnings

Noncreditable earnings include compensation earned for duties that are unrelated to the academic program.

The following compensation items do not qualify as creditable earnings and cannot be reported to TRS:

  • severance payments that are due and payable and paid after your final paycheck for regular earnings or last day of work,
  • payment at termination for services that you will perform while you are retired,
  • lump-sum payments made after your death,
  • previously nonreportable or nonreported earnings or benefits that are converted to reportable earnings in the last years of service for the purpose of increasing final average salary. TRS presumes any decrease in noncreditable compensation in the last seven creditable school years is to increase final average salary,
  • workers’ compensation payments,
  • jury duty payments,
  • options to take salary in lieu of employment-related expense allowances or reimbursements,
  • payments to substitute and part-time noncontractual (hourly) teachers for extra duties that do not require licensure,
  • member THIS Fund contributions paid as a benefit,
  • employer TRS and THIS Fund contributions,
  • employer payment of Medicare tax, and
  • contributions to or distributions from nonqualified deferred compensation plans.

Fringe benefits

Employer-paid fringe benefits are not creditable earnings unless they are included in a reportable flexible benefit plan. A “flexible benefit plan” is an option offered by an employer to employees who are covered under TRS to receive cash or contributions to a 403(b) tax-sheltered annuity or 457(b) deferred compensation plan in lieu of employer-provided insurance. Examples of noncreditable, employer-paid fringe benefits include:

  • dental insurance,
  • disability insurance,
  • health insurance, and
  • life insurance (including insurance in excess of $50,000 and split-dollar life insurance).

Expense reimbursements and allowances

Expense reimbursements or allowances are not creditable earnings, whether they are paid to you or to the provider of the service or product. Examples of noncreditable expense reimbursements and allowances include:

  • cellular phone reimbursements,
  • contributions to medical savings accounts,
  • dependent care reimbursements,
  • employer-provided automobiles,
  • legal fee reimbursements,
  • living or mortgage allowances,
  • medical care reimbursements,
  • membership dues,
  • moving expenses,
  • publication subscriptions,
  • travel reimbursements and allowances, and
  • tuition reimbursements.