Ask Jack is an online communication channel offered by CalSTRS CEO, Jack Ehnes. This Web forum solicits questions about the sustainability and administration of the CalSTRS Defined Benefit Program. Not all will be posted directly, but Jack’s responses will be inclusive of views and perspectives.
How to choose the 403(b) investment vehicle that is right for you? CalSTRS members have access to up to 59 separate 403(b) supplemental tax sheltered investment vendors, offering 220 individual products, and a staggering 5,000 plus choices within those products. The vendors and products vary depending on where you work. That’s vexing.
Under both Coverage A & B Survivor Benefits, if you die before retirement and have not listed a one-time beneficiary, CalSTRS will make the payment to your estate. However, your survivors, including your spouse or registered domestic partner and dependent children, may still be eligible for a monthly survivor benefit.
Yes, according to a recent study, Are California Teachers Better off with a Pension or a 401(k)?, conducted by Nari Rhee, PhD, of the UC Berkeley Center for Labor Research and Education and William Fornia, FSA, of Pension Trustee Advisors, the CalSTRS defined benefit pension provides a better, more secure retirement income when compared to an account-based cash balance or 401(k)-style plan.
Yes, there are certain restrictions for working after retirement in a public school setting. If you return to work after service retirement in a CalSTRS-covered position, including substitute teaching, as an employee of a public school system, an independent contractor or an employee of a third party, there are restrictions under state and federal law that apply to you.
If you are a CalSTRS 2% at 60 member, which generally means you were first hired before 2013, you could retire as early as age 50 if you have at least 30 years of service. Otherwise, you cannot retire before age 55, and you must have at least five years of service. In either case, your benefit will be reduced for retiring at an earlier age.
No, you cannot transfer your service credit to CalPERS, but one option that you have when accruing benefits from more than one California public retirement system is concurrent retirement. You can retire concurrently if:
You are at least age 55 and a member of certain other California public retirement systems, including CalPERS, and
You retire from both systems either on the same day or on different dates as long as you do not perform service creditable to either system between those dates.
Final compensation is the highest average annual compensation earnable during a specified period of CalSTRS-covered paid employment.
If you have fewer than 25 years of service credit, your final compensation is based on your highest average compensation earnable during any period of 36 consecutive months of paid employment covered by CalSTRS under the CalSTRS 2% at 60 benefit structure.
In June of 2014, legislation was enacted to address a projected shortfall in the CalSTRS Defined Benefit Program. The CalSTRS 2014 Funding Plan enacted in Assembly Bill 1469 sets the Defined Benefit Program on a sustainable course to eliminate the unfunded liability in roughly 30 years. This historic legislation calls for gradual, shared contribution increases from members, employers and the State of California over the next several years beginning July 1, 2014.
Under federal law, if you are not a California resident, you are not subject to California state tax. However, your CalSTRS benefits may be subject to taxes in the state where you live. CalSTRS cannot withhold taxes for another state.
As a substitute teacher, you become a member of CalSTRS as early as the first day following the pay period in which you have performed 100 or more days of creditable service during the school year for a single employer (Education Code section 22503). Until passing that threshold, you can only become a member of the CalSTRS Defined Benefit Program by making a voluntary election in writing.
Participation in the CalSTRS Defined Benefit Program for California public school preK-12 teachers, community college instructors and public school administrators is mandatory; part-time educators can choose to become members.
If you were hired prior to 2013 but leave teaching for a period of time and return to the California public school system, the current CalSTRS 2% at 60 benefit plan will continue to apply to you.
The new CalSTRS 2% at 62 member benefit plan applies to those who are first hired to perform service that could be creditable to CalSTRS on or after January 1, 2013. The service you performed before 2013 was creditable to CalSTRS.
If you are a CalSTRS retired member looking to work in retirement within the California public school system, including the community college system, you are subject to the annual earnings limitation. The limitation for fiscal year 2014-15 is $40,173.
In addition to the increase in your contribution rates over the next three fiscal years ending July 1, 2016, Assembly Bill 1469 provides those members who pay the higher contribution rate a guarantee of the 2 percent annual benefit adjustment or improvement factor upon retirement.
Your retirement benefit is still otherwise based on a formula set by law that uses your years of service credit, your age at retirement and your final compensation to calculate your benefit.
When you are eligible to retire, you may make a preretirement election of an option to provide a monthly lifetime income for another person or persons if you should die before retirement.
When you elect an option, your monthly retirement benefit will be reduced from the Member-Only Benefit. The percentage of the reduction is based on the option you elect, your age and your beneficiary’s age at the time you elect an option.
Although CalSTRS is not subject to the anti-assignment rules of ERISA or Internal Revenue Code Section 401 (a)(13), the Teachers’ Retirement Law does provide protection from creditor attachments, or what is referred to as an anti-assignment provision under Section 22006. This section of the law offers an exemption from creditors attempting to seek payment for debt by using a member’s pension benefit as payment.
Electronic privacy is crucial for the ongoing success of the Internet as a convenient means to provide customer service. Your personal information will be used only to conduct CalSTRS-related business.
The California State Teachers’ Retirement System website has been developed in compliance with California Government Code §11135, which requires that all electronic and information technology developed or purchased by the State of California is accessible to people with disabilities. There are various types of physical disabilities that impact user interaction on the web. Vision loss, hearing loss, limited manual dexterity, and cognitive disabilities are examples, with each having different means by which to access electronic information effectively.