Chapter 3: TRS Service Credit & Contributions

Summary

This section contains information about service credit for members of the Teachers' Retirement System (TRS). The information in this section applies to members reported on the transmittal and to substitute teachers who may apply for service credit.

Rules that govern service credit are contained in state retirement law. This handbook summarizes those rules in less legalistic terms. It is not a complete description of the law. If there are any conflicts between what is written here and state retirement law, the law will govern.

TRS Service Credit Rules

Plan 1-All Periods

TRS Plan 1 members earn service credit annually. A member earns a full year or a fraction of a year of service credit based on the number of days of employment.

  • If employed for 144 full time days or more, the member earns one year of service credit for the fiscal year (July-June).
  • If employed for at least 20 but less than 144 full time days during the year, the member earns a fraction of a year of service credit. The amount of service credit is based on the number of days of employment. For example, if a member has 120 days of employment, the member earns .67 of a year of service credit (120 divided by 180 days = .67).

Plan 2 or Plan 3-September 1, 2008, and After

A member employed in an eligible position earns service credit as follows:

If compensated in at least five months of a six month period and compensated for at least 630 hours = 6 months of service credit.

Plan 2 or Plan 3-September 1, 1991, and After

A TRS Plan 2 or Plan 3 member earns 12 months of service credit if the member is:

  • employed in an eligible position;
  • compensated in nine months of the school year;
  • compensated for 810 hours or more in the year; and
  • employed during the month of September.

A member cannot earn service credit for months before employment in an eligible position. For example, a member who meets the criteria for a full year of service credit but is not employed in an eligible position until October can receive only eleven months of service credit that year.

If the member works as a substitute, refer to the New Hire Pyramid for key information about Substitutes.

A TRS Plan 2 or Plan 3 member earns six months of service credit if the member is:

  • employed in an eligible position;
  • compensated in nine months of the school year; and
  • compensated for at least 630 hours but less than 810 hours in the year.

A member cannot earn service credit for months before employment in an eligible position. For example, a member who meets the criteria for a full year of service credit but is not employed in an eligible position until October can receive only eleven months of service credit that year.

Beginning with the 2008/2009 school year, a member earns six months of service credit if the member is:

  • employed in an eligible position;
  • compensated in at least five months of a six-month period; and
  • compensated for at least 630 hours.

If the member works as a substitute, refer to the New Hire Pyramid for key information about Substitutes and Chapter 5 of the Handbook.

A TRS Plan 2 or Plan 3 member who does not meet the criteria for earning a full year or 1/2 year of service credit earns service credit for each month of employment as follows.

  • A member compensated for 90 hours or more in a month earns one month of service credit.
  • A member compensated for at least 70 hours but less than 90 hours earns 1/2 month of service credit.
  • A member receiving some compensation but for less than 70 hours in a month earns 1/4 month of service credit.

A member cannot earn service credit for months before employment in an eligible position. For example, a member who meets the criteria for a full year of service credit but is not employed in an eligible position until October can receive only eleven months of service credit that year.

If the member works as a substitute, refer to the New Hire Pyramid for key information about Substitutes and Chapter 5 of the Handbook.

Plan 2 or Plan 3-Prior to September 1, 1991

Before September 1991, a TRS Plan 2 or Plan 3 member earned a full year of service credit if the member was:

  • employed in an eligible position;
  • compensated in nine months of the school year; and
  • compensated for 810 hours or more in the school year.

A TRS Plan 2 or Plan 3 member who did not meet the criteria to earn a full year of service credit earned service credit on a monthly basis. A member compensated for 90 hours or more in a month earned one month of service credit.

  • A member compensated for less than 90 hours in a month did not receive service credit for that month.

A member cannot earn service credit for months before employment in an eligible position. For example, a member who meets the criteria for a full year of service credit but is not employed in an eligible position until October can receive only eleven months of service credit that year.

Note: Legislation passed in 1991 granted retroactive partial service credit to certain TRS Plan 2 members for the period from October 1977 through December 1986. Six months of service credit was granted for any school year in which a TRS Plan 2 member worked on a half time contract, if the member paid contributions.

Service Credit & Contributions

Plan 1 - All Earning Periods

A TRS Plan 1 member earns a full year or a fraction of a year of service credit for each year in which the member earns compensation for at least 20 full time days (or the equivalent). Contributions are due on any reportable compensation.

A member compensated for less than 20 days should receive a refund of contributions for that year. Contact TRS Retirement Services for more information.

Plan 2 and Plan 3

September 1, 1991, forward

Because a Plan 2 or Plan 3 member earns at least partial service credit in any month in which he or she earns compensation, an employer should always take contributions on any amount of reportable compensation earned on or after September 1, 1991.

January 1, 1987, through August 31, 1991

For a TRS Plan 2 or Plan 3 member for earning periods from January 1987 through August 1991, employee and employer contributions were taken only when a member earned service credit. During that period, when a member did not earn service credit, no contributions were due. To determine whether a member was earning service credit during that period, consult the service credit rules described on the preceding pages.

Prior to January 1, 1987

For a TRS Plan 2 or Plan 3 member for earning periods before January 1987, employee and employer contributions were due on all compensation earned, whether or not service credit was earned.

Optional Service Credit

Members of TRS may be eligible to acquire service credit under other circumstances, including substitute teaching, out-of-state teaching service, authorized military service, and other authorized unpaid leave of absence.

For information on how to apply for substitute teaching service credit, see the New Hire Pyramid Substitutes.

Refer members who need more information to the TRS Retirement Services.

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