Chapter 313, Statutes of 2003 (Assembly Bill 1207—Corbett)
reopens and makes permanent an existing retirement incentive
program (often referred to as the “Golden Handshake”
program) that provides an additional two years of service
credit to members of the Defined Benefit (DB) Program employed
by participating school districts able to demonstrate cost
savings. It also establishes a new retirement incentive program
effective January 3, 2004 that allows school districts to
add two years of service credit and two years of age to the
age factor calculation in determining a member’s benefit.
This has been referred to as the 2+2 retirement incentive.
Many CalSTRS retirees find that they wish or need to return to employment in the California public school
system while continuing to receive their retirement benefits. Others make the decision to forgo their
retirement allowance for the time being and return to active status. When they do so, they may not retire
again for at least a year. If they wait at least two years to re-retire, they may be eligible for certain
benefit enhancements, as described below.
The two years service credit incentive program is reopened
and becomes permanent effective January 1, 2004. The two year
service credit and two years of age incentive program is available
beginning January 3, 2004.
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To receive the two years additional service credit incentive,
you must retire during the “window period” of 60
to 120 days as specified in the formal action taken by your
employer’s governing board. The window period must begin
some time after the Board adopts the resolution.
To receive the two years additional service credit and two
years of age incentive, you must retire during the “window
period” as specified in the memorandum of understanding
(MOU) or formal action taken by your employer’s governing
board. A window period may be open for any specified length
of time, as long as it begins on or after the program’s
January 3, 2004 effective date and the MOU or board action
to establish the window occurs prior to the January 1, 2005
sunset date. An employer may establish multiple window periods
to provide the 2+2 retirement incentive in future school years,
as long as it meets these conditions.
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It is available to members of the CalSTRS Defined Benefit (DB)
Program employed by a school district, community college district
or county office of education, ONLY if the employer agrees to
offer the benefit AND the member is already eligible to retire
for service. To be eligible to retire, you must be:
- Age 55 with at least 5 years of service (excluding unused
sick leave or service credit granted under either retirement
incentive) or
- Age 50 with at least 30 years of service or (excluding
unused sick leave or service credit granted under either
retirement incentive) or
- Age 55 with fewer than five years of service credit but
eligible for concurrent retirement with another California
public retirement system such as the California Public Employees’
Retirement System (CalPERS).
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No, the retirement incentive programs are
only available to DB Program members.
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The two years service credit retirement incentive benefit is
provided to eligible members of the DB Program by participating
school districts, community college districts, and county offices
of education when the employer’s governing board takes
formal action to provide the benefit to ALL of its employees
eligible as members of the DB Program, AND the employer pays
the benefit’s costs and associated administrative fees
to CalSTRS.
The two years service credit and two years of age retirement
incentive may be provided to eligible members of the DB Program
by participating school districts, community college districts
and county offices of education pursuant to a MOU between
the employer and the representative employee organization,
AND the employer pays the benefit’s costs and associated
administrative fees to CalSTRS. The terms of the MOU may place
additional, more restrictive eligibility requirements on employees,
or may specify groups of employees eligible to receive the
2+2 benefit.
DB Program members who are not represented by an employee
organization may receive the two years service credit and
two years of age retirement incentive benefit if the governing
board of the school district, community college district,
or county office of education takes formal action to provide
the benefit to ALL of its employees eligible to retire
as members of the DB Program, AND the employer pays the benefit’s
costs and associated administrative fees to CalSTRS.
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No. A member must already be eligible to retire for service
in order to receive the benefit.
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No. The additional service credit does not count towards
the service credit necessary to qualify for other CalSTRS
benefit enhancements such as one-year final compensation,
the career factor bonus or longevity bonus.
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No. For those members ages 63 and older, or ages 61.5 and
older with 30 or more years of service, no additional years
will be added to their age factor calculation, and will not
be used to calculate employers’ costs for their benefit
because those members already exceed the maximum age factor
of 2.4 percent.
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The maximum age factor anyone can receive is 2.4 percent,
including the career factor and/or retirement incentive. For
members needing fewer than two additional years to reach the
maximum, the amount of the age factor that is less than 2.4
percent will be added to their age factor until they reach
the maximum. Employers are only required to pay for the actual
increase in the benefit amount.
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You may estimate your retirement benefit including either
Retirement Incentive increase by utilizing the CalSTRS Retirement
Benefits Calculator located on the CalSTRS Website. Upon accessing
the calculator you may begin entering your data. As you scroll
down you will see "Retirement Incentive" where you click on
the appropriate button for either 2 Year Service Credit Incentive
or the 2+2 Retirement Incentive. To access the Retirement
Benefits Calculator, click
here.
You may also schedule an appointment for a benefits counseling
pre-retirement interview with one of CalSTRS trained benefits
counselors. During your pre-retirement interview you will
receive an estimate of your retirement benefit including either
retirement incentive. Individual counseling interviews may
be done in person or by telephone. For a Directory of Benefits
Counseling Services, click
here.
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To be eligible, the school district, community college district
or county office of education is required to certify that its
participation in the CalSTRS retirement incentive program will
result in cost savings AND the employer pays the benefit’s
costs and associated administrative fees to CalSTRS.
(CalSTRS employers may no longer offer the existing retirement
incentive program as a result of declining enrollment, or
for the retention of credential employees or employees qualified
to teach in teacher shortage disciplines, unless the employer
adopted the resolution prior to January 1, 1999 pursuant to
a contractual obligation.)
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Either immediately or annually over an eight year period.
An additional fee is associated with the payment plan, and
regular interest (currently 6 percent annually) is charged
on the balance.
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No. Your employer must pay the cost of the benefit. However,
members currently are able to purchase up to five years of
CalSTRS credit not related to actual service, called nonqualified
service.
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Yes.
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No, employers may offer one or both of the retirement incentives,
but may not combine or use a portion of either incentive.
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Any DB Program member who retires on or after January 1,
2004 with a two year additional service credit retirement
incentive is subject to the rules enacted in Chapter 313,
even if the employer had previously adopted a resolution under
the old program.
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A CalSTRS member who retires from a K-12 school district,
Community College or County Office of Education with either
retirement incentive program may return to post-retirement
employment in any CalSTRS-covered position immediately after retirement,
subject to the post-retirement earnings limitations.
However, any CalSTRS member who receives either retirement incentive will
forfeit the retirement incentive if the member returns to post-retirement
employment within five years of the member's retirement date for the same
employer (school district, community college district, or county office of
education) that provided the incentive to that member.
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Yes, any member will forfeit the retirement incentive benefit if he or she:
- Reinstates to active service, or
- Receives unemployment compensation within one year of the retirement date.
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Any member who forfeits the benefit increase would thereafter
begin to receive a retirement benefit based on the age (if
applicable) and the level of service credit he or she had
earned prior to retirement and being granted the retirement incentive.
If your retirement allowance is overpaid as a result of losing
the benefit increase, a receivable will be established and
CalSTRS will collect the overpayment at a rate of five percent
of your monthly benefit until the entire balance is paid.
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Request termination of your retirement allowance using form SR 857 (Reinstatement After Retirement),
which is available on our web site under Forms.
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A previously retired member who has reinstated, performed an additional two or more years of
credited service* after the most recent reinstatement, and accumulated the total service credit
shown below, may qualify for the following enhanced benefits when he or she again retires from service:
| Service Credit |
Enhancements |
| 25 or more years |
One-year final compensation |
| 30 years |
One-year final compensation, career factor (additional 0.2 percent added to age factor),
and $200 longevity bonus |
| 31 years |
One-year final compensation, career factor, and $300 longevity bonus |
| 32 years |
One-year final compensation, career factor, and $400 longevity bonus |
*Important note: Credited service excludes unused sick leave service credit, Golden Handshake or nonqualified service credit.
Members who do not reinstate for at least two years before retiring again and, therefore, do not qualify for the benefit
enhancements may nevertheless be eligible for an increased age factor, career bonus and/or higher final compensation upon retirement.
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The one-year waiting period may not be waived.
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Yes. If you elected an option, upon your reinstatement your selection will become a pre-retirement election
of an option. This means that if you die while an active member, your wishes for an ongoing allowance for your
survivor will be carried out. Alternatively, you may choose to cancel the option following reinstatement or elect
a different option after one calendar year has elapsed following your reinstatement and before your subsequent
retirement. Remember, if you choose to change or cancel an option, normal assessment rules will apply.
For more information on assessments, please refer to topic 371 under Quick Topics.
Also, if you retired with an unmodified allowance, you may elect a pre-retirement election of an option after
one calendar year has elapsed following reinstatement and before your subsequent date of retirement.
You may also choose to wait and elect an option at retirement.
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Once you reinstate to active status, CalSTRS will not continue to pay your Medicare Part A premium as this
benefit is only available only for retired members. Once you re-retire, CalSTRS will resume payment of the
Medicare Part A premium as long as you meet the eligibility criteria based on your prior retirement history.
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The law requires that you wait at least one calendar year following reinstatement before you can start
receiving a retirement benefit again. It is important to note that the benefit enhancements described above
will not be included in your new retirement calculation if you did not earn the minimum two years of credited
service required for these benefits.
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The following illustrations will help you understand how your retirement allowance will be calculated if you
reinstate and work at least two additional years as required to receive the benefit enhancements.
This illustration shows what your retirement would be at the age of 63, with the 2.4 percent age factor,
if you reinstate and earn an additional two years of credited service:
Prior service credit 29.000
Current age factor * 2.4%
Current final compensation $5,000
Current service credit 2.000
Prior
Service
Credit |
|
Current
Age
Factor |
|
Current
Final
Compensation |
|
Prior
Unmodified
Benefit |
| 29.000 |
x |
0.0240 |
x |
$5,000 |
= |
$3,480 |
Current
Service
Credit |
|
Current
Age
Factor |
|
Current
Final
Compensation |
|
Current
Unmodified
Benefit |
| 2.000 |
x |
0.0240 |
x |
$5,000 |
= |
$240 |
| |
Subtotal Unmodified Allowance |
= |
$3,720 |
| |
Longevity Bonus for
31.000 years |
+ |
$300 |
| |
Total
Benefit |
= |
$4,020 |
* Please note that the age factor used in to calculate your prior retirement will be based
on your current age minus the amount of time spent in retirement.
(For example, if your current age is 65, and you were retired for two years, the age factor will be based on age 63.)
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You may submit a request for an estimate either by writing to CalSTRS or by calling CalSTRS at 1-800-228-5453.
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In order to reinstate to active member status you must complete and submit form SR857
(Reinstatement After Retirement), which can be found on www.calstrs.com.
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