Your Pension

Charter School Teachers and the Pension System

Did you know that as a charter school teacher you are enrolled in the Chicago Teachers Pension Fund? Do you know what that pension is worth to you?

Read on to learn about this valuable asset!

An Introduction to the CTPF

All charter teachers are automatically enrolled in the Chicago Teachers Pension Fund (CTPF) upon employment in a public charter school. Currently, your pension contributions are 9% of your base salary. Your employer may or may not pay a share of your contribution, as part of your compensation.

A pension is a type of retirement benefit that you will receive after a certain age and after having gained a certain amount of teaching service (see the chart below). Once you are “vested” (meeting the minimum years of service) you will be able to receive pension payments in retirement, even if you don’t teach your entire career. Additionally, in many cases, even if you take a leave of absence during your career, you can make contributions to your pension for that leave time so that, when you return to teaching, the leave time will be included in your years of service.

CTPF is a “defined benefit” retirement plan. The monthly pension you will receive in retirement will be a percentage of your final salary; the percentage is a formula that rewards longer service and higher age. Once your pension amount is determined, it will not run out, it will not stop, and it even increases over time in retirement.

It is important to note that there are two “tiers” in the CTPF. If you were hired before January 1, 2011 you are in Tier One for pension benefits. If you were hired on or after that date you are in Tier Two for pension benefits.

How old do I have to be and how long do I have to work to get a pension?

The two tiers have different requirements for pension eligibility. In both tiers there is an option for an “early retirement." However, you will receive a reduced pension if you retire early.

Benefit

Retirement age for
a full pension

Retirement age for
a reduced pension

Tier 1

62 with 5 years of service

60 with 20 years of service

55 with 33.95 years of service

55 with 20 years of service

Tier 2

67 with 10 years of service

62 with 10 years of service

How is my pension calculated?

Each tier has a different pension caluclation formula.  Each formula determines your yearly pension salary using an average of your highest salaries and a "pension calculation basis."  Follow the chart below for an explaniation of your pension salary.  

TEIR 1 

Pensionable Average Salary

Pension Calculation Basis 

 

Yearly Pension Salary 

Formula:

  • Average of four  highest yearly salaries in the last 10 years of teaching
  • Number of year taught x 2.2 (Result is considered a percentage)

 

  • Pensionable Average Salary x Pension Calculation Basis

Example:

  • Four Highest Salaries: $50,000, $55,000, $58,000, $60,000. 
  • Pensionable average salary: $55,750
  •  Taught 23.5 years
  • 23.5 x 2.2 = 51.7
  • Pension calculation basis: 51.7%
  •  $55,750 x 51.7% = $28,822.75
  • Yearly Pension Salary = $28,822.75

Details: 

  •  Pensionable Average Salary has no earnings cap.
  • Yearly Pension Salary increases every year after age 61

 

 

TIER 2

Pensionable Average Salary

Pension Calculation Basis 

Yearly Pension Salary

Formula:

  • Average of eight highest yearly salaries in the last 10 years of teaching
  • Number of years taught  x 2.2  (Result is considered a percentage)

 

  • Pensionable Average Salary x Pension Calculation Basis

Example:

  • Eight Highest Salaries: $47,000, $49,000, $50,000, $53,000, $55,000, $57,00, $58,000, $60,000 
  • Pensionable average salary: $53,625
  • Taught 23.5 years
  • 23.5 x 2.2 = 51.7
  • Pension calculation basis: 51.7%
  • $53,625 x 51.7% =
  • $27,724.16
  • Yearly Pension Salary= $27,724.16

Details:

  • Pensionable Average Salary has an earnings cap of $106,800.
  • Yearly Pension Salary increases every year after age 67.

 

 

 Chart applies to teachers who do not retire early.

Is Your Pension Safe?

An important benefit of a career in public education is a secure retirement. Public teacher pension plans are protected under Article XIII, Section 5 (i.e., the “Pension Clause”) of the Illinois Constitution. However, these pension plans will continue to be attacked by groups who would put the burden of our State’s fiscal problems on the backs of public employees.

The IFT and Chicago ACTS works tirelessly to stop these attacks and protect this valuable part of our members’ retirement plans. Pension benefits are part of the total compensation a teacher receives, and a major component of their retirement plans. They are not a “fat cat perk” as portrayed in the media. A pension is a draw for smart college graduates who could choose among many different careers.  A fair and valuable pension helps maintain a quality teacher workforce in Chicago and in Illinois. Be educated about your pension so that when friends and relatives need to understand this issue, you can educate them and they will support teacher pensions as well.

Be educated about your pension so that when friends and relatives need to understand this issue, you can educate them and they will support teacher pensions as well.

You can take action to defend your pension. Join the Chicago ACTS Policy Action Team today!

 

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