WEST SACRAMENTO, Calif. – The California State Teachers’ Retirement System (CalSTRS) today announced the opening of its fifth full-service member center in Riverside’s Citrus Tower. Other service centers are located in Santa Clara, Glendale, Irvine and at the CalSTRS headquarters in West Sacramento.
WEST SACRAMENTO, CALIF. – Investment returns at the California State Teachers’ Retirement System (CalSTRS) came in at 4.8 percent gross for the fiscal-year-end 2014-15, belying stronger long-term performance for the educator fund with $191.4 billion in assets as of June 30, 2015.
The actuarial valuation is a snapshot of the fund’s assets and liabilities. It projects the extent to which the current and future assets of the Defined Benefit Program are sufficient to pay the benefits promised for prior service.
Additional Earnings Credit
A percentage increase to the account balance of Defined Benefit Supplement Program members and Cash Balance Benefit Program participants that is granted by the Teachers’ Retirement Board when investment earnings exceed what is necessary to meet the liabilities of the programs.
The percentage of your final compensation that you will receive as a retirement benefit for every year you work.
The age factor is based on your age on the last day of the month in which your retirement is effective.
CalSTRS 2% at 60:
The age factor at age 60 is 2 percent. The maximum age factor is 2.4 percent. The age factor gradually decreases to 1.1 percent at age 55 if you retire before age 60, and increases to a maximum 2.4 percent at age 63 if you retire after age 60.
For example, if you retire at age 60 and have 20 years of service, you will receive 2 percent (your age factor at age 60) of your final compensation multiplied by the 20 years you worked, or 40 percent of your final compensation (2 percent x 20).
CalSTRS 2% at 62:
The age factor at age 62 is 2 percent. The age factor gradually decreases to 1.16 percent at age 55 if you retire before age 62 and increases to the maximum 2.4 percent at age 65 if you retire after age 62.
See nonqualified service credit.
Annual Benefit Adjustment
An automatic annual increase to your monthly benefit provided by state law.
The increase is effective on September 1 of each year after the first anniversary of your benefit effective date and appears on your October 1 payment. Annual benefit adjustments are calculated at 2 percent of your initial benefit (base allowance). The increase is not compounded or tied to changes in the cost of living.
For members who retired before January 1, 2014, the Legislature can reduce or eliminate the amount of the annual benefit adjustment if economic conditions dictate. However, the Legislature has yet to reduce the 2 percent annual benefit adjustment in the 42 years since providing this adjustment.
Under the CalSTRS 2014 Funding Plan, the 2 percent annual benefit adjustment cannot be reduced for members who retire on or after January 1, 2014.
Member-Only Defined Benefit Supplement or Participant-Only Cash Balance Annuity: A lifetime monthly payment. Any balance remaining upon your death will be paid to your one-time death benefit recipients.
100% Beneficiary Annuity: Provides an actuarially reduced monthly payment for your lifetime and the lifetime of your annuity beneficiary. One hundred percent of your monthly annuity will be paid to your option beneficiary upon your death.
75% Beneficiary Annuity: Provides an actuarially reduced monthly payment for your lifetime and the lifetime of your annuity beneficiary. Seventy-five percent of your monthly annuity will be paid to your option beneficiary upon your death.
50% Beneficiary Annuity: Provides an actuarially reduced monthly payment for your lifetime and the lifetime of your annuity beneficiary. Fifty percent of your monthly annuity will be paid to your option beneficiary upon your death.
For the 100%, 75% and 50% beneficiary annuities, if your beneficiary dies before you, your benefit will rise to the Member-Only amount.
Period-Certain Annuity: A monthly payment made for any number of years from three to 10. The amount you receive is based on the number of years over which the annuity is paid; the lower the number of years, the higher the annuity. If you die before the annuity period ends, the remaining payments are paid to your one-time death benefit recipients.
A retired member who receives funds from her or his Defined Benefit Supplement or Cash Balance account as an annuity payment.
The reduction applied to your benefit if you change or cancel your preretirement election of an option, or if your option beneficiary dies before you do. The amount is the actuarial equivalent of the coverage you received as a result of the preretirement election. (Assessments of $0 do not result in a benefit reduction.)
Assets and Liabilities
An asset is the amount of money identified as being currently in the pension fund. A liability is money owed.
Any person or entity receiving or entitled to receive payments after your death.
Only a person (not an estate, trust or corporation) may be designated to receive an option benefit because of your death.
A monthly or lump-sum amount payable to a retired member, disabled member, retired participant, disabled participant or beneficiary.
Benefit Formula (Service Retirement)
For the Member-Only Benefit, the formula is:
Service Credit x Age Factor x Final Compensation
If choosing an option, multiply the Member-Only Benefit by the appropriate option factor.
Benefit Formula (Disability Coverage A or B)
For the Member-Only disability benefit, the formula is generally 50 percent of your final compensation.
A person or entity that receives a one-time death benefit payment or an ongoing CalSTRS benefit payment.
The introduction of more females, minorities and nontraditionally trained business leaders to the board of directors.
California Public Employees’ Retirement System
California State Teachers’ Retirement System
CalSTRS 2% at 60
CalSTRS 2% at 62
The California Public Employees’ Pension Reform Act of 2013 made significant changes to the benefit structure for Defined Benefit members and Cash Balance participants first hired to perform CalSTRS creditable activities on or after January 1, 2013. As a result, CalSTRS now has two benefit structures:
Members and participants first hired on or before December 31, 2012, are under CalSTRS 2% at 60.
Members and participants first hired on or after January 1, 2013, are under CalSTRS 2% at 62.
In addition, educators who were members of a concurrent retirement system on or before December 31, 2012, and performed service in that system within six months of becoming a CalSTRS member are under the CalSTRS 2% at 60 benefit structure, as are those who performed CalSTRS creditable activities that were subject to coverage under a different retirement system, including Social Security, on or before December 31, 2012.
The 2 percent refers to the age factor, or percentage of final compensation that Defined Benefit members will receive as a retirement benefit for every year of service credit. To receive an age factor of 2 percent, you must work until age 62 if you’re under CalSTRS 2% at 62. The basic age factor for members under CalSTRS 2% at 60 is 2 percent at age 60.
Other benefit differences for CalSTRS 2% at 62 include a 36-month final compensation period (based on the highest annual compensation earnable for 36 consecutive months regardless of years of service credit), lower compensation cap, no career factor, and a higher retirement age (you are not eligible to retire as early as age 50 with 30 years of service credit).
CalSTRS’ voluntary defined contribution plan offers 403(b), Roth 403(b) and 457 plans for additional income for retirement. Select from a variety of investment options with low fees and expenses.
An increase in the percentage of final compensation on which your Defined Benefit service retirement is based.
If you retire with at least 30 years of earned service credit, 0.2 percent is added to the age factor up to a maximum age factor of 2.4 percent, which is reached at age 61½ with the career factor. The career factor doesn’t apply if you die before retirement unless you filed a preretirement option election with CalSTRS.
CalSTRS 2% at 62:
There is no career factor enhancement to the age factor.
Cash Balance Benefit Program
An alternative CalSTRS retirement plan for educators hired to work part time.
The Cash Balance Benefit Program is an alternative to Social Security, private plans and the CalSTRS Defined Benefit Program.
Cash Balance Plan
A retirement plan in which your contributions and your employer’s contributions earn a guaranteed annual interest rate.
At retirement, you receive all the funds in your account. The Defined Benefit Supplement and the Cash Balance Benefit programs are cash balance plans.
A CalSTRS randomly generated number used to identify members.
CalSTRS uses it instead of your Social Security number to secure your identity. Your Client ID is on your Retirement Progress Report.
Comparable Level Position
Any job in which you can earn 66 2⁄3 percent or more of indexed final compensation.
Compensation you could earn in a school year for creditable service performed full time not including service for which contributions are credited to your Defined Benefit Supplement account.
Retiring at the same time from CalSTRS and any of the following systems (or those established under the County Employees’ Retirement Law of 1937):
Legislators’ Retirement System
California Public Employees’ Retirement System
San Francisco Employees’ Retirement System
University of California Retirement System
Retiring on different dates as long as you perform no service creditable to either system listed above between those dates.
CalSTRS may use the salaries for service performed under the other retirement system to calculate the CalSTRS retirement benefit if the service was not performed during the same pay period as the CalSTRS service.
Core benefits are the retirement, disability and survivor benefits. These benefits are guaranteed by the U.S. and California constitutions. The 2 percent benefit improvement factor, or annual adjustment, is not a core benefit and, therefore, is not guaranteed.
The way rights and responsibilities are shared between management and shareholders in a corporation.
County Employees’ Retirement Law of 1937
The following counties provide retirement benefits under this law:
The disability and survivor benefit programs available to those who became members on or before October 15, 1992.
Coverage A is mandatory for all members of the Defined Benefit Program who were receiving a disability benefit or a service retirement benefit with an effective date on or before October 15, 1992. Members who were not receiving a benefit on or before that date could choose to retain this coverage or elect Coverage B.
Coverage A Disability Benefit (Disability Allowance)
A feature of the Defined Benefit Program elected by and offered to individuals who became members on or before October 15, 1992, that provides income replacement for disabled members. The benefit is paid as long as you are disabled up to normal retirement age.
Coverage A Survivor Benefit (Family Allowance)
A monthly amount paid to your surviving spouse or registered domestic partner with eligible dependent children after your death. The maximum amount is 90 percent of your final compensation—40 percent for your spouse or partner plus 10 percent for each eligible dependent child up to an additional 50 percent.
The disability and survivor benefit programs for new members after October 15, 1992, or who previously had Coverage A and elected Coverage B.
Coverage B Disability Benefit (Disability Retirement)
A feature of the Defined Benefit Program for individuals who became members after October 15, 1992, or elected Coverage B during the special election held October 1992 to April 1993. Those receiving payments under Coverage B are “retired” and will be paid as long as they are disabled, without respect to age, until eligible to transition to service retirement.
Coverage B Survivor Benefit
If you die before retirement and had a preretirement election of an option on file with CalSTRS, a lifetime benefit will be payable to your elected option beneficiary. If you do not have a preretirement election of an option, a survivor benefit may be payable to your surviving spouse or registered domestic partner and eligible dependent children.
Salary and other remuneration payable by an employer to everyone in the same class of employees and paid to an employee for performing creditable service.
CalSTRS 2% at 62:
Only compensation paid in cash each pay period in which creditable service is performed under a publicly available written contractual agreements is considered creditable compensation.
Creditable compensation for service in excess of one year in a school year will continue to be credited to the member’s Defined Benefit Supplement account, up to the compensation cap. Compensation, such as allowances, bonuses, cash in lieu of fringe benefits, limited-period compensation or compensation determined to have been paid for the purposes of enhancing a benefit, is not be creditable to any CalSTRS benefit program.
Specific employment activities such as:
Vocational or guidance counseling.
Services related to school curriculum.
A variety of administrative duties performed for an employer in a position requiring either:
A credential, certificate or permit.
Under minimum standards adopted by either:
The Board of Governors of the California Community Colleges.
Under the provisions of an approved charter for a charter school eligible to receive a state apportionment.
Includes service performed by school health professionals, school librarian, superintendent and others as defined in California Education Code section 22119.5.
At the end of each fiscal year, interest is credited to the accumulated Defined Benefit contributions and interest in each active and inactive member’s account at the interest rate adopted by the Teachers’ Retirement Board. It is currently set at a rate that approximates the yield on two-year Treasury notes.
See service credit.
Defined Benefit Plan
A retirement plan in which your retirement benefit is based on a formula not on how much you contribute or how well investments perform.
Defined Benefit Program
A traditional defined benefit plan within the State Teachers’ Retirement Plan that provides a lifetime retirement benefit (based on a formula set by law: age factor x service credit x final compensation) and disability and survivor benefits.
Defined Benefit Supplement Program
The Defined Benefit Supplement is a cash balance plan for Defined Benefit members that provides an additional retirement benefit.
For every dollar you and your employer contribute to the program, your account is credited accordingly. In addition, your account earns guaranteed interest and additional earnings credits, if program assets exceed the amount needed to meet liabilities. Your benefits are paid as either a lump-sum or an annuity equal to the total balance of your account.
You and your employer make contributions on compensation earned from service in excess of one year of service credit and, for CalSTRS 2% at 60 members, limited-term payments and retirement incentives. From January 1, 2001, through December 31, 2010, 25 percent of your regular monthly Defined Benefit member contribution was also credited to your account.
CalSTRS 2% at 62:
You and your employer make contributions on compensation earned for service in excess of one year of service credit in a school year, up to the compensation cap.
Defined Contribution Plan
A retirement plan in which the benefit depends on your contributions, investment gains or losses, and expenses. Benefits under defined contribution plans are not guaranteed.
CalSTRS Pension2 is CalSTRS’ voluntary defined contribution plan.
Disability or Disabled
A medically determinable physical or mental impairment that is permanent or is expected to last continuously for at least 12 months.
The disability must prevent you from performing your usual duties with reasonable accommodations or the duties of a comparable level for which you are qualified or can become qualified by education, training or experience. You may apply for disability while still employed. Any impairment from a willful self-inflicted injury shall not constitute a disability.
See Service Retirement During Evaluation of a Disability Application.
The amount a disabled or retired Defined Benefit member or Cash Balance annuitant may earn from employment in a month or year without a reduction in the CalSTRS benefit. The earnings limits are different for disabled and retired members, and may be adjusted each year by the Teachers’ Retirement Board.
See Postretirement Earnings Limits.
Earnings Limits While Receiving a Coverage A Disability Benefit
Single-Month Earnings Limit: The amount a disabled member may earn in any month without a reduction in the disability benefit. Your disability benefit and employment earnings in a single month are added together and compared to the indexed final compensation for the month. Amounts in excess of the limit will be collected by CalSTRS dollar for dollar.
Six-Month Earnings Limit: Average earnings and disability benefit over any continuous six-month period are compared to two-thirds of the indexed final compensation. If you exceed this limit, your disability benefit can be terminated.
Eligible Dependent Children
Coverage A: Your unmarried children or children not in a registered domestic partnership, or adopted children or stepchildren under age 22 who are financially dependent on you on the effective date of your disability benefit or the date of your death.
Coverage B: Your children, adopted children or stepchildren, under age 21, if financially dependent on you on the effective date of your disability retirement or the date of your death.
The amount withheld from your salary by your employer.
The amount contributed by your employer to your Cash Balance Benefit Program if you are a participant of the program.
Employer Contribution Rate
The percentage of your salary your employer contributes to your Cash Balance Benefit Program if you are a participant of the program.
The pay and bonus packages offered by boards of directors to the executives they supervise.
The highest average annual earnable compensation during a specified period of CalSTRS-covered paid employment.
The period is 12 consecutive months if you have at least 25 years of service credit. Otherwise, the period is 36 consecutive months if you have fewer than 25 years of service credit.
CalSTRS 2% at 62:
Final compensation is based on the highest average annual compensation earnable during any consecutive 36 months.
The number of days or hours of creditable service the employer requires a class of employees to perform in a school year under a collective bargaining or employment agreement to receive the compensation earnable.
Full Time Equivalent (FTE)
The time that a member who is employed on a part-time basis would be required to work in one school year if he or she were employed full time in that position, as defined by Education Code Section 22138.5n.
A funding gap is the difference between the current assets of the fund and the amount needed to fulfill projected member benefits, which is also known as an unfunded actuarial obligation.
Governmental Accounting Standards Board (GASB)
The Governmental Accounting Standards Board is an independent organization that establishes standards of account and financial reporting for U.S., state and local governments.
Home Loan Program
The CalSTRS Home Loan Program is temporarily suspended.
Hybrid Retirement System
CalSTRS administers a hybrid retirement system consisting of a traditional defined benefit (Defined Benefit Program), cash balance (Defined Benefit Supplement and Cash Balance Benefit programs) and voluntary defined contribution (CalSTRS Pension2) plans. CalSTRS also provides survivor and disability benefits.
Indexed Final Compensation
The final compensation used to determine your disability benefits, multiplied by the indexed final compensation factor, based on the year of your initial benefit.
A benefit enhancement that increases your monthly benefit if you had at least 30 years of qualified service credit on or before December 31, 2010. The bonus will be reduced by an option factor if you choose an option.
Anyone who has performed service credit as a Defined Benefit Program member, has earned creditable compensation for that service, and has not received a refund for that service, unless specifically excluded by law.
Active Member: A member who is not retired or disabled and who earns creditable compensation during the school year.
Inactive Member: A member who is not retired or disabled and who has not earned creditable compensation during the current or preceding school year.
Disabled Member: A member who receives a CalSTRS disability benefit.
Retired Member: A member who has terminated employment and has retired from service or has retired for disability and receives a retirement benefit.
Vested Member: A member who has accrued five years of service credit to be eligible for service retirement or a disability benefit in the Defined Benefit Program.
The highest monthly benefit you can receive when you retire from service or disability before any reduction to provide for an option beneficiary.
Nonconsecutive Final Compensation
The highest average annual compensation earnable during any period of 36 months of CalSTRS-covered paid employment. Available if your employer certifies your salary was reduced due to a reduction in school funds.
Nonqualified Service Credit
Service not connected to any prior specific employment. The purchase of nonqualified service credit, or air time, is no longer permitted.
One-Time Death Benefit
A one-time benefit paid to your death benefit recipients after you die.
A plan feature that allows you to distribute your retirement benefit over your lifetime and the lifetime of one or more persons.
100% Beneficiary Option: Upon your death, the reduced benefit will be paid to your option beneficiary for life. If your option beneficiary dies before you, your benefit will be raised to the Member-Only Benefit level.
75% Beneficiary Option: Upon your death, three-quarters of the reduced benefit will be paid to your option beneficiary for life. If your option beneficiary predeceases you, your benefit will be raised to the Member-Only Benefit level.
50% Beneficiary Option: Upon your death, one-half of the reduced benefit will be paid to your option beneficiary for life. If your option beneficiary predeceases you, your benefit will be raised to the Member-Only Benefit level.
Compound Option: Upon your death, benefits will be paid to multiple option beneficiaries for life. The benefit paid to an individual beneficiary depends on which option was elected for that beneficiary, and what percentage of the total benefit was subject to the option and beneficiary elected.
The person you name to receive a lifetime monthly benefit after your death.
An actuarially determined factor used to calculate the amount of monthly benefit when an option is selected to provide a lifetime monthly benefit to a designated option beneficiary after your death.
A person who has performed creditable service subject to coverage by the Cash Balance Benefit Program and who has contributions credited or is receiving an annuity under the Cash Balance Benefit Program.
Pension2 is CalSTRS’ voluntary defined contribution plan which offers 403(b), 457 and Roth 403(b) investment plans.
Postretirement Earnings Limit
Separation-From-Service Requirement Zero-Dollar Earnings Limit: If you return to CalSTRS-covered employment during the first 180 calendar days after your most retirement date, your retirement benefit is reduced dollar for dollar by the amount you earn up to your benefit amount payable during that period. (All Cash Balance annuitants also have the 180-day separation-from-service requirement.) Following the 180-day period, you may return to work under the annual earnings limit.
Postretirement Earnings Limit: If you return to work in a CalSTRS-covered position as an employee of a public school system, an independent contractor, or an employee of a third party, you can earn up to the annual postretirement earnings limit without affecting your benefit. If you earn more than the limit, your CalSTRS benefit will be reduced dollar for dollar by the amount of creditable earnings in excess of the limit up to your annual retirement benefit minus any reduction due to the zero-dollar earnings limit. The Teachers’ Retirement Board adjusts the earnings limit annually. The earnings limit for the 2015–16 fiscal year is $40,321.
Member contributions paid into the CalSTRS Defined Benefit Program based on creditable compensation from which federal and state income taxes have been withheld.
Projected Final Compensation
The final compensation used to determine your disability or survivor benefit under Coverage A, increased by 2 percent, compounded annually, to the earlier of age 60 or the date the disability benefit is terminated.
Service credit plus the service you would have earned to age 60 (or termination of the disability benefit, whichever comes first) had you continued to work and receive service credit at the same rate as the highest of any one of the three school years immediately preceding death or the date your disability benefit began to accrue under Coverage A.
The right of shareholders to put candidates to the board of directors or bylaw proposals on the corporate proxy ballot.
The mechanism by which management and shareholders propose changes to the company’s bylaws, promote candidates to the board of directors, and decide how to compensate executives.
Purchasing Power Protection
Your retirement benefit has additional purchasing power protection. Purchasing power is a measurement of how your retirement benefit keeps pace with inflation. For example, if your benefit stays the same but prices double, your purchasing power is only 50 percent of what it originally was.
Two benefit enhancements support your retirement benefit’s purchasing power:
One-year supplemental benefit payments, paid in quarterly installments. CalSTRS makes these payments to retired members and beneficiaries whose benefits have fallen below a certain level of purchasing power. Purchasing power protection level is currently set at 85 percent of your initial benefit (base allowance).
Ad hoc, or one-time, permanent increases to your monthly benefit, which occasionally have been granted by the Legislature.
Federal and state laws give you the right to request accommodation that would allow you to continue working and obligates employers to make a good faith effort to accommodate these requests. Before making a final decision on your application for disability benefits, CalSTRS may require you to pursue a request for reasonable accommodation. This would enable you to continue employment in your same position, or in one with comparable responsibilities.
Reasonable accommodation could be accomplished by changing the duties of your position or reassigning you to alternate duties you are qualified to perform through modification of your work site or other measures.
The beneficiary you name to receive your one-time death benefit.
The purchase of service credit represented by previously refunded member’s contributions and interest. Redeposit costs include the interest the refunded amount would have earned had the funds remained in the CalSTRS account. If repaid over time, a financing charge is added.
Reduced Benefit Election
A retirement alternative for Defined Benefit members.
To retire under this alternative, you must:
Be at least age 55, but less than age 60.
Have at least five years of service credit.
You receive one-half your monthly benefit amount calculated as if you were age 60.
The reduced benefit will continue for the same number of months after age 60 that you received benefits before age 60. After that, you will receive your normal service retirement benefit. You’re not eligible if you previously received a CalSTRS service retirement or disability benefit, or if you are applying for a service retirement while your disability application is being evaluated.
CalSTRS 2% at 62: Members under CalSTRS 2% at 62 are not eligible for the Reduced Benefit Election.
Reduced Workload Program
Under this CalSTRS program, you may reduce your workload from full time to part time (a minimum of at least 50 percent of full time) and still receive a full year of service credit. You may participate in this program for up to 10 years before retirement. The opportunity to participate is available only if your employer offers the program.
A distribution of all your post-tax contributions, tax-deferred contributions and interest credited on those contributions after you terminated employment with the California public school system.
A registered domestic partner has many of the same rights and responsibilities as a spouse under California law, including:
Laws concerning community property, child custody and support.
Access to family court for the dissolution of a partnership.
To register a domestic partnership with the California Secretary of State’s office, you and your partner must be of the same sex, or if you and your partner are opposite sexes, one of you must be at least 62 years old.
Returning to employment in a position requiring CalSTRS membership and terminating a CalSTRS benefit, such as a retired educator returning as an active member to the classroom in a credentialed position.
A monthly benefit paid to a member each month after retirement for reasons other than disability.
Retirement Benefit Calculation
The formula used to calculate the Member-Only amount CalSTRS members will receive each month after retiring from service. The formula is:
Service Credit x Age Factor x Final Compensation = Member-Only Benefit
CalSTRS 2% at 60:
Age factor is 2 percent at age 60.
CalSTRS 2% at 62:
Age factor is 2 percent at age 62.
Retirement Incentive Program
A program provided by employers that would increase the service credit used in calculating the CalSTRS service retirement benefit.
This program allows Defined Benefit members who are eligible to retire to receive two additional years of service credit. If you return to work for the same employer within five years of retirement, or if you reinstate, you will lose the ongoing increase in your benefit.
Retirement Progress Report
An annual report for active and inactive members that includes:
A summary of Defined Benefit and Defined Benefit Supplement program transactions during the prior year.
Accumulated service credit.
Contribution and interest balances.
Death benefit recipient and beneficiary information.
Two projections of your retirement benefit if you are at least age 45.
CalSTRS also provides a Retirement Progress Report for Cash Balance Benefit Program participants.
Return of Member Contributions
A one-time payment of all your accumulated contributions.
The payment equals your total contributions and interest at time of retirement, disability or death, less the sum of all monthly benefit payments received. This is payable when there are no longer any option beneficiaries or survivors who qualify for a continuing monthly benefit.
Say on Pay
The right of a shareholder to vote on the pay package offered by a board of directors to the executives.
Accumulated period in years, including partial years, for which you earned creditable compensation and made contributions under the Defined Benefit Program.
Service credit is one of the factors used to determine your eligibility for benefits under the Defined Benefit Program. Service credit cannot exceed 1.000 in any given school year.
Service Retirement During Evaluation of a Disability Application
If you are applying for a disability benefit, you may be eligible to receive a service retirement benefit while CalSTRS evaluates your application for disability benefits. This will enable you to receive monthly retirement income while awaiting the determination; however, you will not be eligible for the Reduced Benefit Election.
Smoothing is an averaging process that spreads gains and losses over period of time, which for the Defined Benefit Program is three years. It is used in calculating CalSTRS actuarial valuation and allows CalSTRS to determine the long-term ability to cover benefits already earned by members. Smoothing is a standard practice that meets the Government Accounting Standards Board’s rules governing public pension funds.
Spiking is a situation where a one-time pay or salary increase enacted shortly before retirement is used to elevate a member’s final compensation – and his or her pension amount – to a level that does not reflect the compensation that member has earned over the course of their career. CalSTRS has mechanisms in place to prevent spiking.
A process that permits CalSTRS to participate in an action to recoup benefits paid, expenses and legal costs when a third party causes the injury or death of a CalSTRS member before retirement and the member or family pursues civil litigation.
Supplemental Benefit Maintenance Account
The account from which payments are made to members and beneficiaries whose current benefit is worth less than a specified percent of the original benefit when adjusted for increases in the California Consumer Price Index.
The percentage is currently set at 85 percent.
Surviving Spouse or Registered Domestic Partner
A person who was one of the following:
Married to you or registered as your domestic partner for at least 12 months before your death.
Married to you or registered as your domestic partner fewer than 12 months if either:
A child was born during the marriage or partnership.
Your surviving spouse or partner is pregnant with your child.
Continuously married to you or registered as your domestic partner for either:
Fewer than 12 months before your accidental death.
The period beginning before the occurrence of the injury or diagnosis of the illness that resulted in your death.
Unfunded Actuarial Obligation (UAO)
The unfunded actuarial obligation refers to the amount of additional actuarial assets needed on the valuation date to meet the expected liabilities of the plan incurred from members’ past service. The term “shortfall” is also used to describe an unfunded actuarial obligation, which is also known as a funding gap.
A member of the CalSTRS Defined Benefit Program who has at least five years of service credit or is eligible to retire concurrently with another public retirement system.
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.