Planchoice

Gain Sharing Update

Gain Sharing (see definition below) began in 1998 as a way to share "extraordinary investment gains." The 2007 Legislature passed a law to end gain sharing after January 1, 2008. One final gain sharing distribution was made on January 1, 2008 for members hired before July 1, 2007. Under the new law, plan 2 and 3 members of PERS, SERS and TRS will receive an early retirement benefit. New members of SERS and TRS will receive the choice of plan 2 or 3.

If a court of law decides the repeal of gain sharing is invalid, the reductions for early retirement that were in place before passage of the new law will apply. Additionally, if the court decides the repeal of gain sharing is invalid any new SERS or TRS members hired after that action would no longer have a choice between Plan 2 and Plan 3 and would be mandated into Plan 3.

Gain Sharing Definition

Gain sharing is the payment made to a Defined Contribution account if the earnings on the WSIB retirement system assets average more than 10 percent over a four-year period. Half of the amount over 10 percent will be passed on to TRS Plan 3 members' Defined Contribution accounts based on each member's number of service credit years. If gain sharing payments occur, they are made in January of even-numbered years.

To be eligible for an ongoing gain sharing payment, you must meet one of the following criteria:

  • You must have earned service credit during the 12-month window from September 1 to August 31 of the year immediately preceding the distribution, and had a balance of at least $1,000 in your member account on August 31 of the year immediately preceding the distribution, -or-
  • Be in receipt of the Defined Benefit component of TRS Plan 3, -or-
  • Be in receipt of the Defined Contribution component of TRS Plan 3, and you must have completed 10 service credit years, -or- have completed five service credit years, including 12 service months after attaining age 54, -or-
  • You must have had a balance of at least $1,000 in your member account on August 31 of the year immediately preceding the distribution, -and- have completed 10 service credit years, -or- have completed 5 service credit years, including 12 service credit months after age 44.

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