The Cash Balance Benefit Program is a hybrid retirement program that can be an alternative to the CalSTRS Defined Benefit Program, Social Security and other retirement plans. It accumulates funds based on dollars contributed by the employee and the employer plus interest, similar to a defined contribution program.
Eligibility is determined on the basis of employment, part-time or temporary, not on the actual hours worked. Generally, employees and employers each contribute 4 percent of the employee’s gross salary.
With the Cash Balance Benefit Program, your employer generally matches your contribution dollar for dollar. Typically, you contribute 4 percent of your salary and so does your district. This combined contribution usually will total 8 percent.
CalSTRS is required to withhold 20 percent federal income tax on all rollover-eligible payments distributed directly to you. If you choose to have state income tax withheld, CalSTRS will withhold at 10 percent of your federal withholding, or 2 percent.
You may apply for disability at any time. All creditable service subject to coverage by the Cash Balance Benefit Program and Defined Benefit Program must be terminated before receiving a disability benefit. A disability benefit will become payable only if you meet all disability benefit requirements and upon determination by CalSTRS that you have a total and permanent disability.
If you die before retirement, the balance of your contributions and your employers’ contributions plus any compounded interest and additional credits will be paid to your designated recipient. Normal distribution is a lump-sum benefit, or your beneficiary can choose an annuity if the balance is $3,500 or more. If you did not designate a recipient, a lump-sum payment will be paid to your estate.
If you end all CalSTRS creditable service subject to coverage by the Cash Balance Benefit Program and the Defined Benefit Program for any reason other than death, disability or retirement, you may apply for a lump-sum termination benefit.
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.