By Adam Dauksas
February 19, 2019
On June 4, 2018, then-Governor Bruce Rauner signed into law Public Act 100-0587, which reduces the 6% soft cap on end-of-career TRS creditable earnings increases to 3% for any individual employment contracts and collective bargaining agreements entered into on or after that date. “Grandfathered” contracts and collective bargaining agreements entered into before June 4th are still subject to the old 6% limit. Also, for employees not covered by a bargaining agreement or an employment contract, TRS will accept employment policies for grandfathering if notice was provided as required by the employment policy prior to June 4, 2018 and payments are made pursuant to the term of the policy prior to June 30, 2022.
Now, in order to help it administer the new law, TRS has launched a CBA/Contract Collection Portal and is requiring school districts to submit all grandfathered employment contracts and collective bargaining agreements to TRS via this online portal by March 29, 2019. Employees covered by grandfathered retirement policies also need to be identified through the portal. According to TRS, “[i]f the required information is not received by TRS, any year-over-year salary increases in the 2018-19 and future years will be subject to the 3 percent threshold.” Districts can access the portal here.
To avoid any unforeseen TRS excess cost penalties, we recommend that your district comply with this mandate. Should you have any questions regarding these new TRS obligations, your attorneys at Scariano, Himes and Petrarca, Chtd. stand ready to assist.
Tags Personnel; Pensions