Tier 1 vs. Tier 2 Pensions

On January 1, 2011, the Illinois legislature established two sets of pension eligibility requirements. Members who joined CTPF or a qualified reciprocal system prior to January 1, 2011, are Tier 1. Members who joined CTPF on or after January 1, 2011, are Tier 2.

The pension calculation for both tiers is the same, but the retirement age and method for calculating the final average salary are different. Additionally, the salary used in the calculation of a pension is capped for Tier 2. The Tier 2 salary cap does not limit how much can be earned; it limits the amount for which pension contributions are made.

The chart below summarizes the differences in calculating benefits for Tier 1 and Tier 2 employees.

                                                            Benefit                                                                                                                                                                                                                  Tier 1: Members who joined CTPF or a qualified reciprocal system before January 1, 2011                                                                                                                  Tier 2: Members who join CTPF on or after January 1, 2011             

Retirement age for a pension without a reduction

  • 62 with 5 years of service
  • 60 with at least 20 years of service
  • 55 with at least 33.91 years of service*

67 with 10 years of service

Retirement age for a reduced pension

55 with 20 years of service

62 with 10 years of service

Final Average Salary calculation

Average of 4 highest consecutive years in the 10 years preceding retirement

Average of 8 highest consecutive years in the 10 years preceding retirement

Pensionable Earnings Cap

The annual salaries used in the calculation of the final average salary are capped from year-to-year at 120% of previous year's salary.

Final average salary used to calculate pensions capped at $119,892.41 in 2022. The cap increases by 3% or one-half of the increase in Consumer Price Index (CPI) for the preceding year, whichever is lower.

Annual Pension Increase

3% of pension compounded annually, beginning 1 year after retirement, or at age 61, whichever occurs later.

3% or 1/2 of any increase in the CPI for the preceding year, beginning 1 year after retirement or at age 67, whichever occurs later.

Survivor Pensions

50% of the retired member's retirement annuity; surviving spouse must be age 50 or have surviving minor children.

66 2/3% of the retired member's pension at date of death.

66 2/3% of the earned annuity of the unretired member; no age reduction.

* Applies to members who began employment on or after September 1, 1983.

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