Pension Note (Government Forecasting & Accountability)
SB 4010 changes the interest rate applied to payments made to purchase optional service credit for years worked as a teacher or administrator in a private institution recognized by the Illinois State Board of Education. This legislation would apply regular interest rather than the actuarially assumed rate currently used by TRS. The precise fiscal impact of this legislation is unknown as of this writing because the number of teachers who may purchase this optional service credit during the current window period (which closes on June 30, 2028) is not known. However, lowering the interest rate from the actuarially assumed rate (currently 7.00% for TRS) to regular interest (set at 6% under current law) may result in member payments that are less than actuarially neutral. Therefore, SB 4010 could have a negative fiscal impact on TRS, commensurate with the number of teachers who elect to purchase this service credit and the difference between the two interest rates.