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Age Factor
A percentage determined by your age on the last day of the
month in which your retirement becomes effective. It equals
2 percent at age 60 and is reduced by 1/2 of 1 percent for
each month or fraction of a month in which the member is under
60 but at least 55. For members seeking early retirement who
are age 50, but under age 55, the factor is further reduced
by 1/4 of 1 percent for each month or partial month under
age 55. For members over age 60, the factor is increased by
0.033 for every quarter year of age to a maximum of 2.4 percent
at age 63 and over.
Allowance
A monthly benefit payable to a retired member, disabled member
or beneficiary.
Annual Benefit Adjustment (formerly COLA)
Automatic, annual increases to the monthly benefit, starting September 1 after the
first anniversary of the effective date of the benefit. Calculated at 2 percent of the
initial benefit.
Annual Statement of Account (see also Retirement Progress Report)
A statement mailed directly to active and inactive members each year that provides a
summary of Defined Benefit Program and Defined Benefit Supplement Program transactions
during the prior year, service credit, contribution and interest balances, key provisions
of the CalSTRS DB and DBS Programs and death benefit recipient information as of the
previous June 30. If you have purchased additional service credit or redeposited
contributions that were previously refunded, the changes will first appear on the
statement of account for the fiscal year during which the final payment was made.
Cash Balance Benefit Program participants are mailed a statement of their account's
contributions and accrued interest.
Annuity
A monthly payment made to members, participants or beneficiaries in the Defined Benefit Supplement
Program or the Cash Balance Benefit Program.
Please note: Several changes designed to enhance the choices of annuities
became effective January 1, 2007. A new 75% Beneficiary Annuity is available
for members retiring after that date. Under that choice, 75 percent of your monthly
annuity would be paid to your option beneficiary after your death.
Member-Only Annuity or Participant-Only Annuity for Cash Balance
Participants (Formerly Known As Single-Life Annuity with Cash Feature):
A lifetime monthly payment. Any balance remaining upon your death will be paid to your
one-time death benefit recipient or recipients.
100% Benficiary Annuity (Formerly Known As 100% Joint and Survivor Annuity):
Provides a monthly payment for your lifetime and the lifetime of your annuity beneficiary.
100 percent of your monthly annuity would be paid to your option beneficiary upon your death.
75% Beneficiary Annuity: Provides a monthly payment for your lifetime
and the lifetime of your annuity beneficiary. 75 percent of your monthly annuity would
be paid to your option beneficiary upon your death.
50% Beneficiary Annuity (Formerly Known As 50% Joint and
Survivor Annuity): Provides a monthly payment for your lifetime and the lifetime of your
annuity beneficiary. 50 percent of your monthly annuity would be paid to your option
beneficiary upon your death.
Period-Certain Annuity: A monthly payment made for any
number of years from three to 10. The amount you receive is based on the number of
years over which the annuity is paid; the lower the number of years, the higher the
annuity. If you die before the annuity period ends, the remaining payments are paid to
your one-time death benefit recipient or recipients.
Beneficiary
Any person or entity receiving or entitled to receive payments
because of the death of a member. Only a person (not an estate,
trust or corporation) may be designated to receive an option
benefit upon the death of a member.
Benefit
A monthly amount payable to a retired member, disabled member or beneficiary.
Benefit Formula (Service Retirement)
For the unmodified benefit, multiply service credit
by the age factor then by final compensation.
CalPERS
California Public Employees’ Retirement System.
CalSTRS
California State Teachers’ Retirement System
CalSTRS Home Loan Program
A program for active or retired members to apply for conventional,
fixed-rate, first mortgage loans for primary residences.
Career Bonus
For members who retire on or after January 1, 1999 with at
least 30 years of earned service credit, a bonus of 0.2 percent
(two-tenths of 1 percent) is added to the age factor up to
a maximum age factor of 2.4 percent, which is reached at age
61 and six months.
Cash Balance Benefit Program
Alternative CalSTRS retirement plan for educators hired to
work part time. Cash Balance Benefit Program is an alternative
to Social Security, private plans or the CalSTRS Defined Benefit
Program.
Certified Copy
The document issued by the Bureau of Vital Statistics or County
Recorder to record a birth, marriage or death.
Class of Employees
A number of employees considered as a group because they are
employed to perform similar duties, are employed in the same
type of program or share other similarities related to the
nature of the work being performed. For example, a "class
of employees" could be guidance counselors in a high
school district.
Client ID
A randomly generated identification number assigned by CalSTRS to protect members'
identity and privacy. The number is available on any correspondence from CalSTRS and on
your annual Retirement Progress Report. It may be used to communicate with us about
your account.
COLA
see Annual Benefit Adjustment
Concurrent Retirement
Retiring at the same time from CalSTRS and from certain other
California public retirement systems (Legislator’s Retirement
System, Public Employees’ Retirement System, San Francisco
City and County Retirement System, University of California
Retirement System or those systems established under the County
Employees’ Retirement Law of 1937). CalSTRS may use the
salaries for service performed under the other retirement
system to calculate the CalSTRS retirement benefit.
County Employees’ Retirement Law of 1937
The 1937 Act law includes retirement systems from the
following counties: Alameda, Contra Costa, Fresno, Imperial,
Kern, Los Angeles, Marin, Mendocino, Merced, Orange, Sacramento,
San Bernardino, San Diego, San Joaquin, San Mateo, Santa Barbara,
Sonoma, Stanislaus, Tulare and Ventura. Also known as ’37
Act counties.
Coverage A
Coverage A refers to the disability allowance and family allowance
programs that existed prior to October 16, 1992. Coverage
A is mandatory for all members of the DB Program who were
receiving a disability allowance or a service retirement benefit
with a benefit effective date prior to October 16, 1992. Members
who were not receiving a benefit on October 16, 1992, were
permitted to retain this coverage or elect coverage B.
Coverage B
Coverage B refers to the disability retirement and survivor
benefits programs that became effective on October 16, 1992.
Coverage B is mandatory for all new members and for members
who were not receiving a benefit, had membership effective
dates prior to October 16, 1992 and elected this coverage.
Creditable Compensation
Salary and other remuneration payable in cash by an employer to a member
for creditable service.
Creditable Service
Specific employment activities such as teaching, vocational
or guidance counseling, services related to school curriculum
and a variety of administrative duties performed for a school
district, community college district or county superintendent
of schools.
Credited Interest
At the end of each fiscal year, interest is credited to the
accumulated contributions and interest in each active and
inactive member’s account at the credited interest rate
adopted by the Teachers’ Retirement Board. It is currently
set at a rate that approximates the yield on two-year Treasury
notes.
Credited Service
Service credit for which required contributions have been paid.
Defined Benefit Program
Benefits are specified by the program and are not based upon
the accumulated contributions in the member’s account.
Defined Benefit Supplement Program
A supplemental benefit program with benefits based on contributions and interest
credited to individual member's accounts. Funds will come January 1, 2001,
through 2010, from 25 percent of each member's monthly CalSTRS contribution and
starting July 1, 2002, from compensation earned from service in one school year in
excess of one year of service credit.
Defined Contribution
A retirement benefit in which the benefit is based on the contributions plus interest
earnings and is not guaranteed for life.
Disability Allowance (Coverage A)
A program selected by and offered to individuals who became
CalSTRS members before October 16, 1992, that allows disabled
members to remain "active" and continue to accrue
service credit toward retirement while receiving a CalSTRS
disability allowance. The allowance is paid as long as the
individual is disabled or until the age of 60 when the member
becomes eligible for service retirement.
Disability Retirement (Coverage B)
A program for individuals who joined CalSTRS after October
15, 1992, or elected this benefit program during the special
election held between October 1992 to April 1993.Those receiving
payments under this benefit program are "retired"
and will be paid as long as they are disabled, without respect
to age.
Disability or Disabled
A medically determinable physical or mental impairment that
is permanent or that can be expected to last continuously
for at least 12 months. The disability must prevent a member
from performing the member’s usual duties with reasonable
modifications or the duties of a comparable level for which
the member is qualified or can become qualified by education,
training or experience. A member may apply for disability
while still employed. Any impairment from a willful self-inflicted
injury shall not constitute a disability.
Disabled Member
A member to whom a disability allowance is payable.
Early Retirement Limited Term Reduction Program (Alternative C)
A member must be at least age 55, but under age 60,and have at least
five years of credited service, for retirement under this benefit. The
member receives one-half the monthly benefit amount calculated as if
the member were age 60. The reduced benefit will continue for the same
number of months after age 60 that benefits were received before age 60.
After that, the normal service retirement benefit will be paid.
Earnings Limit
The amount a disabled or retired member may earn in a month without a reduction in the CalSTRS benefit.
Eligible Child
Coverage A: A member's unmarried (or unregistered domestic partner) offspring, adopted child
or stepchild under 22 years of age who is dependent upon the member on the effective date of
the disability allowance or the date of the member's death.
Coverage B: A member's child, adopted child or stepchild, under 21 years of age, if dependent
on the member on the effective date of disability retirement or the date of the member's death.
Employer Pick-Up
Under Internal Revenue Code Section 414(h)(2),a member’s contributions
may be "picked-up " by the employer for the sole purpose of
deferring income taxes on that portion of the member’s compensation.
Family Allowance (Coverage A)
An amount paid to the surviving spouse with eligible children after the
member’s death. The maximum amount is 90 percent of the member’s
final compensation (40 percent for spouse, ten percent for each eligible
child, to a maximum of five children. Also provides a former Option 3
beneficiary allowance to spouse at age 60).
Final Compensation
The highest average annual compensation earnable by a member
during any period of three consecutive years of CalSTRS-covered
paid employment.(One-year final compensation is available
for classroom teachers provided it has been included in a
written collective bargaining agreement.)
Full-Time
The number of days or hours of creditable service the employer requires
a class of employees to perform in a school year under a collective bargaining
or employment agreement.
Golden Handshake
An early retirement incentive program that gives CalSTRS members, whose
employers elect to participate and who meet eligibility requirements,
two additional years of service credit upon retirement if
they file a CalSTRS retirement application with an effective
date within the window period.
Indexed Final Compensation Factors
Factors developed annually based on the change in the members’
statewide average earnable salary. These factors are used to calculate
indexed final compensation.
Indexed Final Compensation
The final compensation increased to reflect the average earnable salary
increase of all active members of the Defined Benefit Program to reflect
changes from the initial benefit date to the current date.
Longevity Bonus
An increase to the monthly unmodified retirement benefit of those who accumulate at least
30 years of service credit before January 1, 2011, regardless of when they retire.
Lump-Sum Death Payment
A one-time payment made to the designated beneficiary(ies)
upon the death of the member.
Member
Any person who has performed creditable service for an employer and has
earned compensation for that service and has not received a refund for
that service, unless specifically excluded by law.
Active Member: A member who earns creditable compensation
during the school year.
Inactive Member: A member who, by the pay period
ending June 30, has not earned creditable compensation during the school year.
Disabled Member: A member to whom a disability allowance is payable.
Retired Member: A member who has terminated employment
and has retired for service or has retired for disability and to whom
a retirement benefit is payable.
Vested Member: A member who has accrued five years
of credited service to be eligible for service retirement, disability retirement, or disability allowance.
Member-Only Benefit:
The highest monthly benefit payable to a member retired for service or disability. This was
previously known as an Unmodified Benefit or Unmodified Allowance prior to January 1, 2007.
Nonconsecutive Final Compensation
The highest average annual compensation earnable during any period
of three years of paid employment covered by CalSTRS. Available for those
members who received a salary reduction due to a reduction in school funds. Upon
certification from the employer, CalSTRS will use the highest three nonconsecutive
school years to determine final compensation.
Nonqualified Service Credit
Service not connected to any prior specific employment.
One-Time Death Benefit
A one-time benefit made to the recipient(s) after a member dies.
Option
Plan feature that allows a member to distribute the retirement benefit over the lifetime
of the member and another person or persons.
Note: Option choices changed on January 1, 2007.
100% Beneficiary Option:
Upon the member's death, the same reduced benefit will continue to be paid to the
option beneficiary for life. If the option beneficiary predeceases the retired member,
the retired member's benefit will be raised or "pop up" to the unmodified level.
75% Beneficiary Option:
Upon the member's death, three-fourths or 75 percent of the option benefit will
be paid to the option beneficiary for life. If the option beneficiary predeceases the retired
member, the retired member's benefit will be raised or "pop up" to the unmodified level.
50% Beneficiary Option:
Upon the member's death, one-half or 50 percent of the reduced benefit will continue to
be paid to the option beneficiary for life. If the option beneficiary predeceases the member,
the member's benefit will be raised or "pop up" to the unmodified level.
Compound Option:
Allows any member prior to the effective date of the member's retirement to designate
multiple option beneficiaries. For each beneficiary designated, the member selects an
option that would provide a reduced retirement benefit payable throughout the life of
the member and his or her option beneficiary.
Option Beneficiary
The person designated by a member to receive a monthly benefit after the member’s death.
Option Factor
An actuarially determined factor used to calculate the amount
of monthly benefit when an option is selected to provide
a lifetime monthly benefit to a designated option beneficiary
after the member’s death.
Parent
A natural parent or parent who adopted the member prior to
the member’s attainment of 18 years of age or marriage,
whichever occurs earlier.
Participant
A person who has performed creditable service subject to coverage by the Cash Balance
Benefit Program and who has contributions credited under the Cash Balance Benefit
Program or is receiving an annuity under the Cash Balance Benefit Program by reason of
creditable service.
Pension2 (formerly the Voluntary Investment Program)
An optional savings program that houses 403(b) and 457 plans,
which complements CalSTRS’ Defined Benefit, Defined Benefit Supplement,
and Cash Balance Benefit programs.
Post-Tax Contributions
Member contributions paid into the CalSTRS Defined Benefit
Program after federal and state income taxes have been withheld.
< Projected Final Compensation
The final compensation used to determine the
Disability Allowance or Family Allowance, under Coverage A,
increased by 2 percent, compounded annually, to the earlier
of age 60 or the date the Disability Allowance is terminated.
Projected Service
Credited service plus the service that would have been earned to age 60
(or termination of the Disability Allowance, whichever comes first) had
the member continued to work and receive service credit at the same rate
as the highest of any one of the three school years immediately preceding
death or the date the Disability Allowance began to accrue under Coverage A.
Redeposit
The buying back of service credit represented by previously withdrawn contributions
after terminating CalSTRS-covered employment. Redeposit costs include the interest
the refunded amount would have earned had the funds remained in the CalSTRS account.
Reduced Workload Program
Allows eligible members to reduce their workload from full
time to part time (a minimum of 50 percent of full time) for
up to 10 years before retirement.
Refund
A member who has terminated employment with the California
public school system may withdraw all member contributions,
tax-deferred contributions and interest credited on those
contributions.
Registered Domestic Partner (Partner)
A registered domestic partner has many of the same rights and responsibilities
as spouses under California law - including, but not limited to, laws concerning
community property, child custody and support, and access to family court for
the dissolution of a partnership. To register a domestic partnership with the
California Secretary of State's office you and your partner must be of the same sex,
or if you and your partner are opposite sexes one of you must be at least 62 years old.
Reinstatement
Returning to employment in a position requiring CalSTRS membership, such as a retired
educator returning to the classroom in a credentialed position and terminating of a CalSTRS benefit.
Retirement Benefit
The amount a member will receive each month after retirement.
Retirement Benefit Calculation
The formula used to calculate the amount CalSTRS members will
receive each month after retiring for service. The formula
is: service credit x age factor (2 percent at age 60) x final
compensation.
Retirement Incentive Program
A program that would increase either one of the elements used in calculating the CalSTRS
service retirement benefit. This program allows DB members who are eligible to retire to
receive two years of service credit often called golden handshake.
Retirement Progress Report (see also Annual Statement)
A document mailed each year to active and inactive members. It contains annual statements for
Defined Benefit and Defined Benefit Supplement accounts, pension estimates (for members over 45),
information on disability and survivor benefit coverage, a listing of option beneficiaries and more.
Return of Member Contributions
A one-time payment of all accumulated member contributions.
Payment equals the member’s total contributions and interest
at time of retirement, disability or death, less the sum of
all monthly benefit payments received. This is payable when
there are no longer any beneficiaries or survivors who qualify
for a continuing monthly benefit from the program.
Service Credit
Accumulated period of time in years or partial years, for
which a person earned compensation subject to contributions
to CalSTRS.
Single-Month Earnings Limit
The member’s disability benefit and employment earnings
in a single month are added together and compared to the indexed
final compensation for the month. Amounts in excess of the
limit must be offset by CalSTRS.
Six-Month Earnings Limit
The member’s employment earnings and disability benefit
over any continuous six-month period are compared to 66 2/3
of the indexed final compensation. If they exceed this
limit, the disability can be terminated unless the member on
disability is enrolled in a CalSTRS-approved rehabilitation
plan.
Source Tax
Law where some states had the legal right to tax retirement payments regardless
of where the benefit recipient lived. Recent federal legislation repealed
the right of individual states to tax retirement payments of recipients
who are not residents of the state from which they are receiving benefits.
Standard Early Retirement (Alternative A)
At least 55 years old but under age 60 and a minimum of five years of
service credit.
Subrogation
A process that permits CalSTRS to participate in an action to recoup expenses
and legal costs when a third party causes the injury or death of a CalSTRS
member before retirement and the member or family pursues civil litigation.
Supplemental Benefit Maintenance Account
The account from which payments are made to members and
beneficiaries whose current allowance is worth less than 80
percent of the original benefit when adjusted for increases
in the California Consumer Price Index.
Surviving Spouse
A person who was married to the member for at least 12 months prior to
the member's death. They may be married less than 12 months if a child
was born during the marriage or if the surviving spouse is carrying the
member's unborn child.
"Surviving spouse" also means a person who was married to
the member for less than 12 months, if the member's death
was accidental or due to illness and the marriage occurred
prior to the occurrence of the injury or diagnosis of the
illness that resulted in death.
Teletalk
General information about a variety of CalSTRS subjects is
available by touch-tone telephone from the CalSTRS Teletalk
information system. Teletalk calls are answered electronically.
When a call is answered, the caller is asked to enter a three-digit
message code to designate the recorded message desired. The
caller can also request forms, duplicate 1099R’s, Statements
of Account, and brochures.
30 and Out (Alternative B)
At least 50 years old but under age 55 with a minimum of 30 years of credited
service.
Unmodified Benefit
See Member-Only Benefit
Vested Member
A member of the CalSTRS Defined Benefit Program with five years of credited service.
Voluntary Investment Program
For more information regarding this program see Pension2 definition.
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