WEST SACRAMENTO, Calif. – Consistent with its commitment to ensuring a financially sound retirement system, the California State Teachers’ Retirement Board today voted to adopt a new set of actuarial assumptions that reflect members’ increasing life expectancies and current economic trends. Today’s decisions were based on the multi-year CalSTRS Experience Analysis, commonly referred to as the experience study, spanning July 1, 2010, through June 30, 2015.
With the passage of the CalSTRS 2014 Full Funding Plan, enacted in AB 1469, contribution rates for the Defined Benefit Program are now greater than contribution rates for the Defined Benefit Supplement Program. As a result, when contributions on compensation that is earned for service in excess of one school year (excess service credit) are transferred to the Defined Benefit Supplement Program, the contributions that exceed the required amount are deemed to be excess contributions and by law must be returned.
Excess contributions for both members and employers will be returned to the employer that remitted the contributions associated with the excess service credit. It is the responsibility of employers to return excess member contributions to employees. Returned pre-tax contributions will be considered taxable income in the year employees receive them regardless of when the contributions were initially paid.
Any excess contributions accumulated for members who refund, retire, receive a disability benefit or die will be returned to the employer following the end of each quarter. Excess contributions for active members will be returned annually in October. Interest is not paid on excess contributions as CalSTRS has no legal requirement or authority to pay interest on the return of excess contributions.
If there is an adjustment to reduce a member’s excess service credit from a prior year, employer or member contributions may be due back to CalSTRS.
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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.