On February 4, 2019, the Teachers’ Retirement System of Illinois (“TRS”) activated a CBA/Contract Collection “Portal” within the Employer Access Area of the TRS website. TRS explains that the Portal was implemented to assist TRS in administering Public Act 100-0587, which, effective June 4, 2018, reduced the salary increase threshold which would trigger an employer contribution to TRS from six (6) to three (3) percent for salaries paid after July 1, 2018 and which are used in the member’s final average salary calculation upon retirement.
The law, however, provided a “grandfathering” clause which exempted a contract or collective bargaining agreement (“CBA”) from the new three (3) percent threshold that was entered into, amended, or renewed before June 4, 2018. During this “exempt period,” the employer would be subject to the previous six (6) percent threshold, assuming an action was not taken that would cause the contract or CBA to lose its exemption.
TRS now requires employers to electronically submit the exempt CBA or employment contract information through the online portal. Copies of grandfathered CBA’s are also required to be uploaded. Access rights to the portal have been provided to any district employees who have access rights to complete and submit the district’s Annual Report to TRS. Finally, TRS requires this information to be submitted by March 29, 2019, and notes that if the required information is not submitted and received by that date, any salary increases in 2018-2019 and future years will be subject to the three (3) percent threshold.
TRS has created a number of resources for districts to reference when submitting the required information to their portal, specifically the Frequently Asked Questions webpage and the Completing the CBA Collection Process tutorial.
Districts who have been operating under grandfathered CBAs or contracts must submit the required information to TRS no later than March 29, 2019, or will risk losing the exemption. Additionally, submission of accurate information is essential to ensure TRS properly classifies the contract or CBA as exempt in order to avoid potential TRS penalties assessed for payments made under such contracts or CBA’s. Contact your Robbins Schwartz attorney to discuss this new requirement.