Ask CalSTRS
Where can I get answers to questions about my Form 1099-R?
Answers to frequently asked questions about CalSTRS Form 1099-Rs are on our Web site. If you can't find your answer there or don't have Internet access, please call us toll-free at 800-228-5453 (TTY: 916-229-3541).
I have 403(b) and 457 accounts with CalSTRS. Am I required to withdraw funds from those accounts at any specific time?
Yes. Federal law requires that most of the benefits in your 403(b) or 457 retirement plan be paid to you during your lifetime rather than to your beneficiaries after your death. Consequently, you must begin to take certain distributions from your account after a specific date. If you don't take out the required minimum, you will owe additional federal income tax.
Your first required distribution must take place by April 1 of whichever comes later:
- The year following the calendar year in which you turn 70 ½
- The year following the calendar year in which you retire
The required amount of the distribution will vary depending on the specifics of your account and your age.
The federal tax on an unpaid minimum distribution is 50 percent. If you're turning age 70 before July 1, 2008, be sure to talk with your tax advisor about the required distributions so you don't face an unwelcome surprise at tax time next year.
Why is CalSTRS building a new headquarters instead of using the money for teacher pensions?
The formula for CalSTRS defined benefit pensions and annual benefit adjustment are set by the Legislature, not CalSTRS. As a result, CalSTRS cannot increase educators' benefits without a change in state law.
The income from CalSTRS investments, including income from real estate investments, provides about 70 cents of every benefit dollar. The new headquarters is part of our real estate investment portfolio — an investment in better service to our members and improvement to the West Sacramento community. Lease payments on the new building will provide a reasonable rate of return to the Teachers' Retirement Fund while its energy-efficient features will save over $145,000 a year in energy costs. Consolidating operations now located in three older buildings will create an efficient, productive work environment. And most important, we'll be able to serve you better with a member service center, workshop rooms and improved board meeting facility just a few short blocks from the State Capitol.
CalSTRS' smart choices in the construction process will save approximately $13.2 million and ensure the project is completed on schedule. The new headquarters is a good investment for California educators.
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