PEN CD-TRS-SALARY INCREASES

104th Regular Session Introduced by Javier Cervantes and 8 co-sponsors

Excludes overload pay (eg, summer school) from trigger calculations for extra employer pension contributions, if certified and meeting conditions, effective July 1, 2025.

Sent to the Governor

Summary — HB 2564 (PEN CD-TRS-SALARY INCREASES)

Status: Rule 19(a) / Re‑referred to Rules Committee
Introduced: February 2025 (Rep. Dave Vella)
Statutory reference amended: 40 ILCS 5/16-158 (Downstate Teacher Article, Illinois Pension Code)
Effective date: Act text states “effective immediately”; the exclusion in the amendment applies to salary increases given on or after July 1, 2025.

Purpose

To clarify that certain pay increases for teachers that result from "overload" duties (for example, summer school or additional classes beyond a full‑time load) should be excluded from the salary‑increase calculation that can trigger an additional employer pension contribution when annual salary increases exceed 6%.

Key provisions

Amends 40 ILCS 5/16-158 (provisions governing employer contributions to the Teachers’ Retirement System (the “System”)) to add an exclusion for overload pay.

The System shall exclude salary increases given on or after July 1, 2025 that result from overload work (including summer school) from the calculation that could trigger additional employer contributions for salary increases greater than 6%, provided both of the following conditions are met and certified/approved:

The overload work is for the sole purpose of classroom instruction in excess of the standard number of classes for a full‑time teacher in that district during a school year.
The salary increases for that overload work are equal to or less than the rate of pay for classroom instruction computed on the teacher’s current salary and work schedule.

The exclusion applies only when the local school district has certified these facts to the System and the System has approved the certification.

Who is affected

School districts and other employing units that pay teachers for overload work (summer school, additional classes).

Teachers receiving overload pay (they can receive compensation without necessarily producing an employer pension surcharge if conditions are satisfied).

The Teachers’ Retirement System (TRS) — responsible for reviewing/approving district certifications and implementing the exclusion in its employer contribution calculations.

State and local pension funding/actuarial results may be indirectly affected.

Procedural / timeline notes

The exclusion is explicitly limited to salary increases granted on or after July 1, 2025.

The bill text indicates it is effective immediately; administrative implementation will require districts to submit certifications and TRS to adopt procedures for review and approval.

Exact fiscal impact (savings to employers or effect on TRS funding ratios) is not stated in the bill and would depend on the volume of overload payments and how many would otherwise have contributed to >6% increase triggers.

Potential impacts

Likely reduces the likelihood that overload/summer school pay will create additional employer pension contribution obligations, lowering short‑term employer cost in some districts.

Could modestly reduce reported pensionable salary growth used to compute employer surcharges, with a possible (but unspecified) impact on TRS contribution revenue and actuarial liabilities.

Adds administrative steps: district certification and System approval processes.

Statute amended: 40 ILCS 5/16-158 (Downstate Teacher Article, Illinois Pension Code).