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SB 4010

PEN CD-TRS-SERVICE CREDIT

104th Regular Session Introduced by Terri Bryant and 23 co-sponsors

The bill tightens how TRS credits are earned and paid for, requiring specific up-front contributions (with interest) for military, non-member, or sick-leave service to obtain credi

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Bill Summary · SB 4010

Summary of SB 4010 (104th Illinois General Assembly)

Title: PEN CD-TRS-SERVICE CREDIT

Jurisdiction: Illinois

Bill Status: Engrossed; Passed Third Reading in Senate on 2026-04-16. Sponsors: Sen. Darby Hills, Sen. Terri Bryant, Sen. Erica Harriss, Sen. Dale Fowler, Sen. Don DeWitte, Sen. Sally Turner, Sen. Steve McClure.

Purpose
- The bill amends the Illinois Pension Code (Section 16-128) to govern creditable service, required contributions, and related procedures for obtaining service credit in the Teachers’ Retirement System (TRS). The changes primarily address the due contributions, interest, and specific scenarios for acquiring creditable service for certain types of prior service (e.g., military, non-member periods, and sick leave arrangements).

Key Provisions and Changes

1) General creditable service contributions (a)
- To receive creditable service under Section 16-127(b), a member must contribute:
- (i) The amount that would have been contributed if the service had been rendered as a TRS member.
- (ii) For military service not immediately following employment and for service under subdivision (b)(10) of Section 16-127, an amount equal to the employer’s normal cost of benefits for that service, as determined by the Board.
- (iii) Interest from when the contributions would have been due to the date of payment, with rates depending on time:
- Prior to July 1, 1965: regular interest
- July 1, 1965 to June 30, 1977: 4% annually
- On and after July 1, 1977: regular interest

2) Non-member periods (b)
- For those not members on June 30, 1963, the minimum required contribution to obtain creditable service under paragraph (2) of subsection (b) is:
- $420 per year of service, plus interest:
- 4% per year compounded annually from July 1 preceding membership until June 30, 1977
- Regular interest compounded annually thereafter to the date of payment

3) Military service credit (c)
- Calculations for contributions to receive creditable service for military service follow salary assumptions:
- For the initial period of service, assume the remainder of the school term’s salary rate equals the rate at entering military service.
- If military service is not immediately following employment, assume the salary rate on the last date as a participating teacher prior to service, or the first date after service, whichever is greater.
- For each subsequent school term, the assumed salary rate increases by 5% from the previous term.

4) Other creditable service calculations (d)
- For credit under paragraph (5) of Section 16-127, the member’s salary rate during the period being credited is assumed equal to the last salary rate immediately preceding that period.

5) Yearly service credit contributions (d-5)
- For each year of service credit established under subsection (b-1) of Section 16-127:
- The member must contribute (i) the employee and employer contributions that would have been required if the service were rendered as a member, based on the annual salary rate during the first year of full-time teaching after private/parochial service, plus
- (ii) regular interest on those contributions from the date of first full-time employment to the date of payment, compounded annually at a rate determined by the Board.

6) Sick leave and employer cost (d-10)
- For service credit established under paragraph (6) of subsection (b) of Section 16-127 (days of sick leave beyond the member’s normal annual allotment):
- The employer must pay the normal cost of benefits for such service credit.
- This subsection does not apply to sick leave granted under contracts or collective bargaining agreements in force as of June 1, 2005.
- Employer contributions under this subsection must be paid as a lump sum within 30 days after receipt of the bill, after the teacher begins receiving benefits.

7) General timing and payment
- Except for the d-10 provision, contributions may be made from the date the credit statement is issued until retirement, and all required contributions must be completed before a retirement annuity is granted.

Source Note
- The changes reference Public Act 96-546 (eff. 8-17-09) as the baseline authority for some provisions.

Potential Impact

  • Individuals seeking to establish or increase creditable service in TRS, including:
    • Military service credit
    • Service for periods not previously covered by membership (non-member periods)
    • Credit for years based on special salary assumptions
    • Credit for days of sick leave beyond normal allotment (with employer funding)
  • Financial implications for members:
    • Higher up-front contributions (including interest) to secure additional service credit.
    • Different interest rates and calculation methods depending on the period being credited.
  • Employer financial obligation:
    • When sick leave credit is sought under d-10, the employer must fund the normal cost of benefits in a lump-sum payment within 30 days of billing after benefits begin.

Procedural and Timeline Aspects

  • This bill was introduced, referred to committees, advanced through Second Reading, and moved to Third Reading in early 2026, with multiple co-sponsors added in April 2026.
  • If enacted, the provisions would apply prospectively to eligibility and calculation of creditable service for credits earned after the effective date, with transition rules as specified by the statute and Act cited (Public Act 96-546 for baseline terms).

Notes for Readers

  • The bill is technical and focused on the mechanics of service credit, contributions, and interest. Individuals considering applying for additional TRS credit should consult HR/benefits staff or pension consultants to understand exact contribution requirements based on their service type and dates.

Compiled from official sources — confirm details with the bill’s official record.

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