State Teacher Plans for Illinois

Many teachers do not have access to low-cost choices in their 403(b) plans. Of the 366 district 403(b) plans that we have graded so far in Illinois, 7 districts have an A rating, 0 districts have a B rating, 249 districts have a C rating, 38 districts have a D rating, and 72 districts have an F rating.

If you are a teacher in Illinoid, here are the state teacher plan options that are available to you.

Illinois TRS

Most states still offer a traditional formula-based pension. Under this type of arrangement an educator would receive a percentage of their final year's salary until death that is based on some combination of years worked, age, and salary. Some states have made pension plans less generous to new hires, and some states have replaced traditional pensions with 401(k)-type plans.

More information about the Illinois TRS plan is available directly from the pension website, and Karl Fisch's book on the Illinoid pension is available here. Pension plan information for other states is also available for reference through this state pension search tool. This data is shared with us by Karl Fisch, and it is current as of January 1, 2025.

Applicable to All Teachers

Social Security

Illinoid teachers do not pay into Social Security

Administrative Fee for Supplemental Plans

$100 per year for 457

New Teachers Hired On or After 1/1/2024

Defined Benefit

Employee: 9% (often picked up by the employer); Employer: 0.58%; State: dollar amount

Multiplier

2.2% post 1/1/1998

Average Salary

Highest 8 of last 10 years

Normal Retirement

Age 67 with 10 years of service

Cost-of-Living Adjustment (COLA)

At age 67, lower of 1/2 CPI or 3% not compounded

Veteran Teachers Hired Prior to 1/1/2001

There are no additional benefit tiers between the new teacher and veteran teacher tiers compared here. The exact transition date between these tiers is not relevant to this comparison.

Defined Benefit

Employee: 9% (often picked up by the employer); Employer: 0.58%; State: annual appropriation

Multiplier

2.2% post 1/1/1998

Average Salary

Highest 4 of last 10 years

Normal Retirement

Any age with 35 years of service
Age 60 with 10 years of service
Age 62 with 5 years of service

Cost-of-Living Adjustment (COLA)

3% beginning at age 61

Illinois 457(b)

Every state operates a 457(b) plan that serves governmental workers like police, fire, and state government officials. These plans are generally excellent, and in many cases they are superior to the 403(b) offerings available in school district plans. Most states allow educators to participate in these plans; unfortunately, about a dozen do not.

Find out more about how we rate state 457(b) plans and view plans in other states.

Yellow TRS Supplemental Savings Plan

Illinois teachers are eligible to contribute to this plan.

Fees

$0 admin fee, $100 account fee, and a low index fee

Record Keeper

Voya

Target Date Fund

Vanguard

NOTE: Account fee should decline as plan gains more assets under management. The $100 fee is exorbitant for low account balance.

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