Cash Balance Benefit Program - Frequently Asked Questions

	Cash Balance Benefit Program - Frequently Asked Questions

	ELIGIBILITY Who can participate in the CB Benefit Program? When are employees eligible to participate in the CB Benefit Program? Can an employee elect into both CB and Social Security? Is membership mandatory in the CB Benefit Program for all new employees hired to work less than 1/2 time after July 1, 1996? Can a DB member hired to work less than 1/2 time elect into the CB Benefit Program? Can a CB member work more hours than 50 percent or 1/2 time and remain in the CB Benefit Program? ROLLOVERS Can a CB participant rollover money from other retirement plans to their CB Benefit Program? Can a CB participant rollover money from their CB account to other retirement plans? Does the participant have to wait six months to rollover their CB account? PLAN DISCONTINUANCE If a district chooses to discontinue participation in the CB Benefit Program, what happens to the enrolled participants and their accounts? BENEFITS When can I retire? Can I receive a monthly benefit? TERMINATION What happens to my money if I quit working? MULTIPLE EMPLOYERS May an employee simultaneously contribute to the Defined Benefit Program and the CB Benefit Program? If a Cash Balance participant is working for three districts who offer the CB Benefit Program will this service be aggregated? If an employee works in three districts who have taken formal action to provide the CB Benefit Program and one district discontinues CB participation, is the employee still eligible to contribute to the remaining CB Benefit Program employers? If an employee is employed in three districts and elects to participate in the Defined Benefit Plan in one of those districts, is the employee still eligible to contribute to the CB Benefit Program? If an employee is employed in three districts and the basis of employment changes to greater than 50 percent of the full-time equivalent for the position in one of those districts, is the employee still eligible to contribute to the CB Benefit Program? May an employee working in three districts belong to three different retirement plans? ELIGIBILITY Who can participate in the CB Benefit Program? Any CalSTRS eligible employee whose basis of employment is less than 50 percent. Return to top When are employees eligible to participate in the CB Benefit Program? Employees are eligible to participate in the CB Benefit Program when their District or County Offices have elected participation into the CB Benefit Program through a formal action. Return to top Can an employee elect into both CB and Social Security? Yes, if for different districts. Return to top Is membership mandatory in the CB Benefit Program for all new employees hired to work less than 1/2 time after July 1, 1996? No, AB 2673 allows employers to offer whatever choice of plans they may wish to provide for employees. Return to top Can a DB member hired to work less than 1/2 time elect into the CB Benefit Program? Yes. As long as the basis of employment is less than 1/2 time a DB member can stop DB contribution and elect to enroll into the CB Benefit Program at the time the employer offers the CB Benefit Program. Return to top Can a CB member work more hours than 50 percent or 1/2 time and remain in the CB Benefit Program? Yes, as long as the employer does not change the employees time base from less than 1/2 time. Return to top ROLLOVERS Can a CB participant rollover money from other retirement plans to their CB Benefit Program? Yes. Provided such rollovers are from eligible retirement plans allowable under applicable federal statute law. Return to top Can a CB participant rollover money from their CB account to other retirement plans? Yes, but all CalSTRS creditable service must be terminated. Return to top Does the participant have to wait six months to rollover their CB account? Yes, if they are under 55 years of age. Return to top PLAN DISCONTINUANCE If a district chooses to discontinue participation in the CB Benefit Program, what happens to the enrolled participants and their accounts? Participants accounts will remain with the CalSTRS CB Benefit Program and their account will continue to receive compounded interest. If the CB participant terminates all eligible employment, then he or she may withdraw their funds. Return to top BENEFITS When can I retire? Normal retirement age under the plan is 60 years of age, although a participant may retire as early as the date on which he or she attains the age of 55 years. Return to top Can I receive a monthly benefit? The normal form of retirement benefit is a lump sum payment. A participant may elect to receive the benefit in the form of a monthly annuity, provided they have at least $3,500 in their account. Return to top TERMINATION What happens to my money if I quit working? Your contributions as well as your employers contributions may stay in your account and continue to draw compounded interest until distribution is required by federal law. Currently, federal law requires distribution of benefits at age 70 1/2. You may apply for a termination benefit. The termination benefit will be payable six months following the date of termination of creditable service subject to coverage by the plan. Any new creditable service will cancel an application for a termination benefit. A termination benefit can only be paid once in a 5 year period. Return to top MULTIPLE EMPLOYERS May an employee simultaneously contribute to the Defined Benefit Program and the CB Benefit Program? Yes, as long as the employee works 50% or less in each position. Return to top If a Cash Balance participant is working for three districts who offer the CB Benefit Program will this service be aggregated? No. Every employer will independently report each Cash Balance participant's service to CalSTRS as long as the time base for which the employee was hired is less than 50 percent in each district. The employee can remain a CB Benefit Program participant in all districts. Return to top If an employee works in three districts who have taken formal action to provide the CB Benefit Program and one district discontinues CB participation, is the employee still eligible to contribute to the remaining CB Benefit Program employers? Yes. As long as the employee does not elect or is mandated into the DB Program. Return to top If an employee is employed in three districts and elects to participate in the Defined Benefit Program in one of those districts, is the employee still eligible to contribute to the CB Benefit Program? Yes, the employee can continue to contribute to the CB Benefit Program as long as the basis of employment remains 50% or less in each district. Return to top If an employee is employed in three districts and the basis of employment changes to greater than 50 percent of the full-time equivalent for the position in one of those districts, is the employee still eligible to contribute to the CB Benefit Program? It depends, if the 50% or greater position is the Cash Balance district then the employee must contribute to DB for that district, however the employee can contribute to the CB Benefit Program in the other districts if the basis of employment remains less than 50%. If an employee takes a full-time position in one district than all service must be reported to the DB Program. Return to top May an employee working in three districts belong to three different retirement plans? Yes. For example, an employee employed in three different districts could have coverage under the CB Benefit Program, Social Security or an alternative plan. The availability of retirement plans coverage that the employee may select is dependent on which plans the employers are offering. Return to top

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