TRS Illinois Final Average Salary — How Your Pension Formula Works

The Formula That Determines Your Pension

Your TRS pension is calculated as:

Years of Service × 2.2% × Final Average Salary = Annual Pension

The maximum is 75% of FAS, reached at 34 years of service. So a teacher with 30 years of service and a $90,000 FAS would receive 66% of that salary — $59,400 per year, or about $4,950 per month.

The multiplier (2.2%) and the cap (75%) are the same for both tiers. What differs is how FAS is calculated and what salary counts.

Tier 1: Highest 4 Consecutive Years

Tier 1 members' FAS uses the average of the highest 4 consecutive salary years within the last 10 years of creditable service. "Consecutive" means back-to-back school years with no gap.

If you took an unpaid leave of absence or had a year with significantly lower earnings, the consecutive requirement can be restrictive. You can't cherry-pick your four best years across a decade — they must run in sequence.

For most Tier 1 members whose salaries increased steadily, the highest 4 consecutive years are simply the last 4 years before retirement.

Tier 2: Highest 8 of Last 10 Years

Tier 2 members use the highest 8 years within the last 10 years of service. Public Act 102-0016 removed the requirement that these 8 years be consecutive for members retiring on or after June 1, 2021.

This change helps Tier 2 members who had a salary dip — perhaps from switching to a part-time role or moving districts — because the two lowest years in the final decade can be dropped.

The 6% Salary Cap

Illinois law (Public Act 94-0004) generally requires the district to pay TRS an employer contribution when salary increases over 6% are used in your FAS. Public Act 104-0544, effective July 10, 2026, excludes increases resulting from overload work, summer-school work, or stipend work when the district certifies, and TRS approves, that the work is solely classroom instruction beyond the standard number of classes for a full-time teacher during the school year.

Districts know this rule well, and many structure final-year contracts to stay under the 6% threshold. If your district is offering you a raise above 6%, ask whether an employer contribution applies or the increase qualifies for an exemption. Some districts will absorb the cost; others won't, and the raise may be restructured.

The salary increase is not automatically excluded from your FAS; the issue is whether your district owes an employer contribution or qualifies for an exemption.

Tier 2 Pensionable Earnings Caps

Tier 2 members face an additional constraint: a statutory cap on pensionable compensation under 40 ILCS 5/16-106.14.

• FY 2024–25: $125,773.73
• FY 2025–26: $127,283.01
• FY 2026–27: $129,192.26

Earnings above these caps are not subject to TRS contributions and cannot be included in the FAS calculation. For veteran Tier 2 teachers and administrators earning above the threshold, this permanently compresses their pension.

A Tier 2 teacher earning $145,000 in their final years has their FAS calculated as if they earned the cap amount. The difference between what they actually earn and what counts toward their pension grows every year that inflation pushes salaries faster than the cap adjustment.

Running Your Own Numbers

Your MyTRSIL Benefit Estimate shows the FAS TRS projects for you based on current salary data. Compare it against your actual salary history — if TRS has an error in any year (especially an early career year that might affect a Tier 2 average), catching it now is far easier than correcting it after you've filed your retirement application.

The TRS Illinois Retirement Guide includes a FAS worksheet that walks through both tier calculations with your actual salary history, so you can verify TRS's numbers before you commit.

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