Bottom line
Illinois TRS still compares an actuarial money-purchase benefit with the formula annuity for members who entered before July 1, 2005, paying the higher result under the applicable record.Key facts
- TRS eliminated the money-purchase actuarial benefit for teachers who became members on or after July 1, 2005
- Eligible earlier members receive the higher of the actuarial calculation or the average-salary/service-credit formula calculation
- The 75% formula cap does not apply to the actuarial money-purchase benefit
What Illinois TRS means by money purchase
Illinois TRS uses “money purchase” to describe the actuarial annuity calculation available to a limited group of older members. It is not a separate account that the member withdraws at retirement. TRS calculates an actuarial retirement benefit using interest and mortality factors, then compares that result with the regular average-salary/service-credit formula when the member is in the group still entitled to the actuarial comparison.
The key cutoff is membership timing. TRS states that the actuarial benefit was eliminated for teachers who became members on or after July 1, 2005. Members who joined before that date continue to receive the larger of the formula calculation or the actuarial calculation at retirement. Confirm the membership date on the TRS record before treating money purchase as an available alternative.
How the actuarial calculation differs from the formula annuity
The regular Tier 1 formula uses final average salary and years of creditable service, with 2.2% per year for post-June 1998 service and the applicable treatment of older service. The formula benefit is generally subject to a 75% maximum of average salary. By contrast, the money-purchase result is an actuarial calculation based on accumulated value and actuarial factors such as interest and mortality assumptions.
TRS explicitly says there is no 75% limit on the actuarial annuity benefit. That does not mean money purchase is usually larger. TRS notes that the formula calculation produces the higher benefit for most members with current or recent service, while the actuarial calculation can be more favorable for some members with exceptionally long careers or long inactive periods. The system performs the comparison from the actual record.
| Feature | Formula calculation | Money-purchase actuarial calculation |
|---|---|---|
| Primary inputs | Average salary and service credit | Interest and mortality factors plus account values |
| 75% maximum | Generally applies | Does not apply |
| Who can receive it | Tier 1 members meeting retirement rules | Only members retaining pre-July 1, 2005 actuarial eligibility |
| Which is paid | Compared by TRS | Higher result is paid to eligible member |
How to tell whether the comparison applies to your record
First confirm the date you initially became a TRS member, not merely the date of your current job or most recent return to teaching. The money-purchase cutoff concerns members who became members before July 1, 2005. Then review MyTRSIL for credited service, refundable contributions and retirement estimates. A later employment break does not by itself prove that the actuarial comparison has disappeared or remains available.
Next, request a personalized retirement estimate near your intended retirement date and ask whether TRS is comparing the actuarial and formula benefits. Actuarial factors are subject to change, so an old estimate should not be treated as a permanent quote. If reciprocal service, refunded service or a 2.2 upgrade affects the record, have those items reconciled before relying on the final comparison.
Why inactive periods can make the actuarial result more relevant
TRS says the actuarial calculation usually benefits members with exceptionally long careers or long periods of inactive status. The reason is structural: the money-purchase approach is not driven only by the final salary-and-service formula. A record with older contributions and long gaps can produce a different relationship between accumulated actuarial value and the formula pension than a conventional continuous teaching career.
That observation should not be turned into a rule of thumb that inactivity guarantees a higher money-purchase benefit. The actuarial result depends on factors and account values TRS calculates, and those factors can change. Use the system’s estimate as the source of the comparison. A member planning a return to teaching should also check how new salary and service change the formula side of the calculation.
| Record pattern | Possible effect | What to do |
|---|---|---|
| Current/recent service | Formula is larger for most members | Review current estimate |
| Exceptionally long career | Actuarial result may become more competitive | Ask for both calculations |
| Long inactive period | Actuarial result may be more favorable in some records | Update estimate before retirement |
| Post-2005 initial membership | Money purchase not available | Use applicable formula rules |
How the 2.2 upgrade can change the comparison indirectly
For a member with pre-July 1998 service, a 2.2 upgrade can increase the formula calculation by converting older service from the graduated rates to the 2.2 formula. Because TRS pays the higher of the formula and actuarial calculations to an eligible pre-July 2005 member, improving the formula side can change which result wins the comparison even if the actuarial calculation itself is unchanged.
That makes it important to evaluate a 2.2 upgrade using the final retirement estimate rather than viewing the upgrade and money-purchase benefit as unrelated topics. Ask TRS to incorporate paid or pending upgrade information into the estimate. The separate upgrade cost also matters when deciding whether the higher projected formula result justifies completing the upgrade.
Why old money-purchase estimates should be refreshed
TRS describes the actuarial calculation as depending on interest and mortality factors that are subject to change. A money-purchase estimate from years earlier may therefore differ from the calculation at retirement even if the member’s service history has barely changed. New contributions, refunds, service corrections and the retirement date can also alter the result used by the system.
Request a current personalized estimate when the retirement date becomes reasonably specific and again if major account items change. Confirm that the estimate reflects the correct membership date, service credit, 2.2 upgrade status and any reciprocal considerations. The final TRS calculation controls; a spreadsheet that recreates only the 2.2 formula cannot reliably reproduce the actuarial money-purchase benefit.
Before you make a decision
- Confirm your original Illinois TRS membership date and whether it is before July 1, 2005.
- Review MyTRSIL for service credit, refundable contributions and 2.2 upgrade information.
- Request a current personalized retirement estimate showing the applicable comparison.
- Resolve pending service corrections, refunds or reciprocal service before relying on the estimate.
- Check how any 2.2 upgrade changes the formula side of the comparison.
- Refresh the estimate if actuarial factors or your retirement date change materially.
Frequently asked questions
Who still gets the Illinois TRS money-purchase calculation?
TRS says members who became members before July 1, 2005 continue to receive the comparison between the actuarial money-purchase calculation and the regular formula calculation. The actuarial benefit was eliminated for teachers who became members on or after that date.
Does Illinois TRS let me choose money purchase instead of the 2.2 formula?
For an eligible older member, TRS performs both applicable calculations and pays the higher result; it is not described as a free-standing election between two investments. Confirm that your membership date preserves actuarial eligibility and review the current personalized estimate from TRS.
Is the Illinois TRS money-purchase benefit capped at 75% of salary?
TRS states that the 75% maximum applies to the average-salary/service-credit formula, while there is no limit on the actuarial annuity benefit. That does not guarantee the actuarial calculation is larger; TRS says the regular formula wins for most members.
Why might an inactive teacher have a larger money-purchase benefit?
TRS notes that the actuarial calculation can favor some members with long inactive periods or exceptionally long careers. The outcome is account-specific because the actuarial calculation uses interest and mortality factors and account values. Request a current TRS estimate rather than assuming inactivity creates a higher benefit.
Can the Illinois TRS money-purchase estimate change before retirement?
Yes. TRS says the actuarial calculation depends on interest and mortality factors that are subject to change, and account activity can also change the inputs. Refresh the estimate when your retirement date becomes specific or when service, refunds or upgrade information changes.
Official sources
Sources were reviewed on September 1, 2026. Rules and member records maintained by the retirement system control.
Illinois TRS — Chapter 9: Retirement BenefitsOfficial source ↗Illinois TRS — Retirement Benefits guideOfficial source ↗Illinois TRS — Accessing Your TRS Account OnlineOfficial source ↗This article provides general educational information. It is not a benefit determination or financial, tax, or legal advice. Confirm account-specific information with the retirement system.