Illinois Public Pensions: TRS, SERS, SURS, IMRF & More

• TRS (Teachers' Retirement System), public school teachers outside the City of Chicago. Chicago teachers are in CTPF (see the CPS Pensions guide).
• SERS (State Employees' Retirement System), most State of Illinois employees.
• SURS (State Universities Retirement System), University of Illinois, community colleges, and state universities. Members choose between a Traditional plan, Portable plan, or Retirement Savings Plan (RSP, defined-contribution).
• IMRF (Illinois Municipal Retirement Fund), most county, township, park district, library, and non-Chicago municipal workers.
• JRS / GARS, judges and General Assembly members.
• Downstate Police and Fire pension funds, separate local funds for police officers and firefighters outside Chicago (Chicago police and fire are in the CPS/city funds).

Each system has its own Tier 1 (hired before Jan 1, 2011) and Tier 2 rules, formulas, and retirement ages. Confirm your tier before you plan around a retirement date.

Most Illinois teachers and many state and university employees do not pay Social Security taxes on their pension-covered work. That triggers two federal rules that surprise families every year:

• Windfall Elimination Provision (WEP), reduces your own Social Security benefit if you also earned a pension from non-covered work. The reduction is capped and phases out with 30+ years of substantial Social Security earnings.
• Government Pension Offset (GPO), reduces (often eliminates) Social Security spousal or survivor benefits by two-thirds of your non-covered pension.

In January 2025, the Social Security Fairness Act repealed both WEP and GPO. If your benefits were previously reduced, contact Social Security, retroactive payments and higher ongoing checks are being issued. Verify the current rules before you file, because they have changed recently.

Every Illinois pension system offers some form of survivor protection, but the choices are usually irrevocable at retirement. Common pitfalls:

• Choosing a straight-life pension for a slightly higher monthly check, leaving a healthy spouse with nothing.
• Assuming the surviving spouse's own Social Security will cover the gap (see WEP/GPO above).
• Not coordinating pension survivor benefits with life insurance and long-term care planning.

Before signing retirement paperwork, run the numbers for at least three scenarios: single life, 50% joint-and-survivor, and 100% joint-and-survivor. Ask the system for a written estimate.

• Illinois income tax, Illinois does not tax qualified retirement income, including public pensions, IRA and 401(k) withdrawals, and Social Security. Use the retirement income subtraction on Schedule M.
• Federal income tax, Your pension is generally federally taxable.
• Retiree health insurance, TRS, SERS, SURS, and most systems offer a retiree health plan (TRIP, SEGIP, CIP). Coordination with Medicare at age 65 is required and mistakes are costly. See the Medicare guide.

A monthly pension is income for Medicaid purposes and cannot be given away. When one spouse needs nursing home Medicaid and the other stays home, Illinois uses spousal impoverishment rules to protect a portion of the pension for the community spouse. Aid & Attendance from the VA is needs-based and pension income counts against it. Long-term care insurance premiums may be partially deductible on your federal return. Coordinate all of these before, not after, a health event forces a rushed decision. See Medicaid, Aid & Attendance, and Tax Deductions.