Teaching is one of the few professions where defined benefit pensions still dominate, but the systems that fund those pensions vary dramatically by state. California teachers have CalSTRS. Texas teachers have TRS. New York teachers have NYSTRS. Each works differently, funds differently, and offers different options at retirement. What they share: most do not allow lump sums, and most do not pay into Social Security, which until January 2025 meant WEP and GPO reduced whatever Social Security teachers had earned from other jobs.
The major TRS systems
CalSTRS (California). The second-largest public pension in the country. Formula: 2.0% per year under the 2% at 60 benefit structure for pre-2013 members, or 2.0% at 62 for PEPRA members. A teacher with 30 years earns 60% of final average salary. No lump sum option. Five-year vesting.
Texas TRS. Formula: 2.3% times years of service times average of 5 highest annual salaries. A 30-year teacher earns 69% of final average salary. Texas TRS offers a Partial Lump Sum Option (PLSO) at retirement, allowing members to elect 12, 24, or 36 months of benefit as a one-time payment in exchange for a permanently reduced monthly annuity. Five-year vesting.
Illinois TRS. Formula: 2.2% for first 10 years, 2.66% for years 11-20, 3.11% for years 21-30, 3.55% for years above 30. Strongly rewards long-career teachers. No lump sum. Ten-year vesting for Tier 2 members hired after January 1, 2011.
NYSTRS (New York). Formula varies by tier. Tier 6 members hired after April 1, 2012: 1.75% per year for 20 years, then 2.0% per year above 20. Ten-year vesting. No lump sum option, but service credit purchase options are available.
Georgia TRS. Formula: 2.0% times years of service times average of highest 2 consecutive years. Ten-year vesting. No lump sum. One of the better-funded teacher systems in the Southeast.
The WEP repeal and what it means for teachers
About 15 states have teacher pension systems where teachers do not pay Social Security taxes during their teaching career. Before January 2025, these teachers faced the Windfall Elimination Provision (WEP) if they had Social Security credits from other work, and the Government Pension Offset (GPO) if they had spousal or survivor SS benefits.
The Social Security Fairness Act, signed January 5, 2025, repealed both. Teachers who worked in SS-covered jobs before or after their teaching career now receive their full earned SS benefit. Spouses of teachers who lost spousal SS benefits to GPO now receive those benefits. If you have not seen your SS amount updated, check your my Social Security account and contact SSA if the reduction is still showing.
Survivor benefit options
Most TRS systems offer joint and survivor annuity options at retirement. The reduction varies but is typically 5 to 15% of the monthly benefit to add a 100% survivor benefit for a spouse. Teachers in states without Social Security should pay particular attention to survivor benefit elections. Their spouse may have limited SS income from the teacher's career. The survivor benefit election at pension retirement may be the primary guaranteed income source the surviving spouse has.