On June 5, the Governor signed Public Act 101-0010 which, among other things, deleted the TRS 3% excess salary cap and revived the 6% cap.  (See our email alert that same day reporting on the history of the 3% legislation.)

As a result of the change in law, educational employers will once again be responsible for excess salary payments to TRS only if they provide a TRS member with a year-over-year increase of more than 6% in any of the years used to calculate the member’s pension.

The change was part of the budget implementation bill which went into effect when the Governor signed the bill.  This means that the cap for the 2018–2019 school year is 6%, effectively and completely negating the 3% limitation which went into effect July 1, 2018.  For all practical purposes going forward, the 3% limitation never existed. The change will likely trigger a re-examination of collective bargaining agreements, employment contracts and policies which are based on the 3% limitation.