As a CalSTRS member, you may add to your service credit,
which is used to calculate your retirement benefit. The
more service credit you have, the larger your monthly retirement
benefit. The following explains how you may increase your
service credit.
Retirement formula
To better understand the importance of service credit, it
is helpful to know how the retirement benefit is determined.
The retirement benefit calculation formula is set by law
and multiplies three elements: your years, or parts of years,
of service credit; a percentage based on your age at retirement,
called the age factor; and your highest average earnable salary,
generally for any period of three consecutive years, called
final compensation.
Benefit Enhancements
Benefit changes enacted over the past few years provide incentives
for CalSTRS members who retire with over 25 and 30 years of
service credit. These benefit enhancements include the following:
Career Factor - If you retire with 30 or more years
of service credit, 0.2 percent will be added to the age
factor, up to a maximum combined age factor and career factor
of 2.4 percent.
One-Year Final Compensation - If you retire with
25 or more years of service credit, your highest one year
of earnable compensation will be used in your retirement
benefit calculation, rather than the average of your three
highest consecutive years of earnable compensation.
Longevity Bonus - If you retire and have accumulated at
least 30 years of service credit by January 1, 2011, a longevity
bonus will be added to your monthly Member-Only retirement
benefit. The longevity bonus amount ranges from $200 to $400,
depending on the years of service credit at retirement.
NOTE: Any redeposit or purchase of permissive service credit
must be paid in full by December 31, 2010, if it is to be used
for Longevity Bonus eligibility.
Permissive Service Credit
Additional, or permissive, service credit can be purchased
for performing non-CalSTRS work activities; or, for service
credit you would have earned while on an employer-approved
leave. These activities include:
Nonqualified Service Credit
is not related to any prior employment. If you have at least five years of
CalSTRS service credit, you can buy up to five years of Nonqualified
Service credit. Although this credit is included in the retirement
calculation, this service credit cannot be used
for meeting eligibility requirements for any CalSTRS benefit enhancements.
Redeposit
or buy back of CalSTRS retirement funds
you previously withdrew when you terminated your CalSTRS-covered
employment. You can redeposit your funds if you return to
CalSTRS membership or are a member of certain other California
public retirement systems. You can also redeposit an amount
equal to the contributions withdrawn by your former spouse
or registered domestic partner as part of a community property
settlement.
How to Read Your Monthly Cash Installment Invoice
|
