What the changes mean

To ensure that TRA is sustainable for future generations of retired educators, changes to the plan are sometimes necessary. Legislation passed in 2018 immediately reduced TRA liabilities by $2.0 billion, increased the funded ratio to 75 percent (from 70 percent), and put the plan on track to be 92 percent funded in 30 years.

Changes affecting retirees

Post-Retirement Increase
  • 1/1/2019 – 1/1/2023 = 1.0 percent
  • 1/1/2024 = 1.1 percent
  • 1/1/2025 = 1.2 percent
  • 1/1/2026 = 1.3 percent
  • 1/1/2027 = 1.4 percent
  • 1/1/28 and thereafter = 1.5 percent
Post-Retirement Increase Eligibility

For retirements on or after July 1, 2024, the post-retirement increase will be delayed until normal retirement age (age 65 if membership started before July 1, 1989, or age 66 if membership started on or after July 1, 1989). The increase delay does not apply to members retiring at age 62 or older with 30 years of service credit, members retiring under Rule of 90 (Step formula calculation), disability benefit recipients, or survivor benefit recipients.

Post-Retirement Increase Trigger

A trigger that would have increased the post-retirement increase if TRA were at least 90 percent funded for two consecutive years was eliminated.

Changes affecting active teachers

Contribution Rates
  • Beginning 7/1/2019: 7.5 percent employee, 7.92 percent employer
  • Beginning 7/1/2020: 7.5 percent employee, 8.13 percent employer
  • Beginning 7/1/2021: 7.5 percent employee, 8.34 percent employer
  • Beginning 7/1/2022: 7.5 percent employee, 8.55 percent employer
  • Beginning 7/1/2023 and after: 7.75 percent employee, 8.75 percent employer

The law provides state funding for the higher employer contribution through a pension adjustment in the school aid formula.

Early Retirement Benefits

Augmentation in the early retirement reduction factors will be phased out over a five-year period beginning 7/1/2019, completed by 6/30/2024. (This reduces early retirement benefits.) Exempt: members who retire at least age 62 with at least 30 years of service.

Deferred Benefits

Augmentation on deferred benefits will be reduced to zero percent beginning 7/1/2019. Interest payable on refunds to members was reduced from 4 percent to 3 percent effective 7/1/2018. Interest due on payments and purchases from members, employers was reduced from 8.5 percent to 7.5 percent effective 7/1/2018.

Changes affecting TRA finances

Investment Return Assumption

This key assumption was lowered from 8.5 percent to 7.5 percent. (No effect on benefits.)

Amortization Period

The amortization date for the unfunded liability was re-set to 6/30/2048. (No effect on benefits.)

Contribution Stabilizer

A mechanism that provided some authority for the TRA board to set contribution rates was eliminated.

All about early retirement

You might be considering retiring early. If you do, your benefit must be reduced because you will be receiving it for a longer period of time.

“Early retirement” is any age earlier than 66, and the younger you retire before age 66, the higher the reduction—similar to Social Security.

Learn more about early retirement

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