A consolidation of benefits is a process CalSTRS can use
when a person who has benefit coverage under both the Defined
Benefit Program and the Cash Balance Benefit Program, and
meets eligibility requirements, to merge benefit coverage
under the DB Program.
When a member’s benefits are consolidated, CalSTRS
transfers the member’s contributions and interest from
the CB Benefit Program to the DB Program and closes the member’s
CB account. CalSTRS adds service credit to the member’s
DB account based on the time covered under the CB Benefit
Program that is “eligible CB service.” The contributions
and interest in the CB account are applied to the cost of
consolidating benefit coverage. Please refer to FAQ #4 for
a definition of “eligible CB service.”
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A DB Program member who has funds in a CB account from eligible
CB service may consolidate benefits if he or she is currently
making contributions under the DB Program and is not contributing
to his or her CB account.
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By consolidating your benefit coverage, you may increase
the amount of service credit that will be used to determine
your retirement benefit. In addition to increasing your monthly
retirement allowance, credit for your eligible CB Benefit
Program service may be used toward eligibility for benefit
enhancements, such as one-year final compensation, career
factor and the longevity bonus.
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Eligible CB service is part-time employment that was covered
under the CB Benefit Program. For purposes of consolidating
benefit coverage, however, eligible CB service does not include
overtime that, prior to July 1, 2002, was covered under the
CB Benefit Program.
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No. If the only funds in your CB account are from overtime
service and/or rollover funds, you are not eligible to consolidate
benefits. You must have eligible CB service to be eligible
to consolidate benefits. Please refer to FAQ #4.
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When your benefits are consolidated, CalSTRS will determine
the service credit that can be added to your DB account, and
will apply the contributions and interest in your CB account
toward the cost of covering your eligible CB service under
the DB Program. In many cases, CB Benefit Program contributions
and interest will not cover the full cost of all eligible
CB service that you performed. However, if you have contributions
from overtime, or rollover funds in your CB account, those
funds may also be applied to the cost of covering your eligible
CB service. When there are more funds in your CB account than
are required to cover the cost of your eligible CB service,
then you have additional options to consider. In this case,
see FAQ #10.
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The current cost to convert CB service into DB service credit
is figured on a tiered rate formula based upon your age at
the time CalSTRS receives your request. Because the contribution
rate for CB Benefit Program participants and employers is
usually 8%, approximately half the contribution rate for the
DB Program, the contributions and interest available in the
participant’s CB Benefit Program account may not cover
the full cost of service credit under the DB Program.
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Yes. If the funds in your CB account do not cover the entire
cost of your eligible CB service under the DB Program, the
service credit to be added to your DB account can be prorated
based on the funds available in your CB account.
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You may contribute personal funds toward covering the remaining
cost of your eligible CB service. To do so, you must request
a separate billing for the cost of covering the remaining
CB time. You may choose from several payment alternatives,
including a lump-sum payment, payroll deduction, monthly installments
over a specified period or a rollover from a qualified plan.
For additional information, refer to the Purchase
Additional Service Credit brochure.
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CalSTRS must transfer all funds from your CB account when
your benefits are consolidated and your account must be closed.
All of your CB funds must first be applied to the consolidation
of your eligible CB service under the DB Program. After your
CB funds have been applied to the cost of covering your eligible
CB service, you may have CalSTRS:
- apply any remaining funds to any outstanding
debt you might have to CalSTRS that is not being paid through
a tax-deferred payroll deduction; and/or
- apply any remaining funds to the cost of
other service credit that you are eligible to purchase;
and/or
- transfer the remaining funds to your DBS
account.
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Any remaining funds can be applied toward the cost of the
following types of service credit:
- Nonqualified service (also known as “air
time”)
- Time from sabbatical, maternity, paternity
or family care and medical leave
- Certain military service
- Service credit for activities such as out-of-state
teaching
- Redeposit of previously withdrawn contributions
For more information and a full explanation of the types
of service credit that may be purchased, refer to the Purchase
Additional Service Credit brochure.
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The funds in your CB account must first be applied to cover
the cost of all eligible CB service that you have performed.
If additional funds remain in your CB account after all of
your eligible CB service has been consolidated, then you may
specify how you wish the remaining funds to be applied, toward
the cost of other service credit, a redeposit, or transferred
to your DBS account.
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There could be. The cost to purchase DB service credit depends
on your highest earnable salary and the DB Program contribution
rate. If the contribution rate and/or your earnable salary
increases, the cost to purchase additional service credit
could be substantially higher later in your career.
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No. In order to be eligible to consolidate benefit coverage,
you cannot be contributing to a CB Benefit Program account.
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Yes. You may participate in the CB Benefit Program in the
future. However, in most cases, it would be in your best interest
to continue to accrue service credit under the DB Program
to further increase your DB benefits.
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No. The service that was covered under the CB Benefit Program
while you were employed full-time under the DB Program was
considered overtime service, which cannot be consolidated.
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No. CB funds cannot be consolidated with your DBS account
if there has not been any application of CB funds to the cost
of covering eligible CB service under the DB Program.
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Under certain circumstances, yes. After your CB funds have
been applied to the consolidation of your benefits, you may
have CalSTRS apply any remaining CB funds to a purchase of
service credit that is already in process, as long as you
are not making payments on the service credit purchase through
a tax-deferred payroll deduction.
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In this case, your benefits have already been consolidated.
If you previously purchased your eligible CB service and the
funds in your CB account were not used for that purpose, CalSTRS
must re-allocate your CB funds. The law prohibits the same
service from being covered under more than one plan, or more
than one program within a plan. Contact CalSTRS Customer Service
at 800-228-5453 for additional information.
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No. Since you do not have any funds in your CB account, there
are no benefits to consolidate. However, you may purchase
credit under the DB Program for any eligible CB service you
performed.
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No. Because you never performed any eligible CB service,
there is no service to convert. However, as a DB Program member,
there may be other service you are eligible to purchase. Refer
to the Purchase
Additional Service Credit brochure for more information
about the types of service credit you may be eligible to purchase.
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Yes, if you are currently contributing to the DB Program
and not to the CB Benefit Program, you may elect to consolidate
your benefits.
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Yes, if you are currently contributing to the DB Program
and not to the CB Benefit Program, you could elect to consolidate
your benefits.
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No, a consolidation of benefits is different from a distribution
of benefits and does not require a 12-month waiting period.
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You must complete and submit a Request to Consolidate Benefits
form. You can download the Request
to Consolidate Benefits form, together with an information
sheet on the process and form instructions for completing
the request here. You must also complete and have each of
your former CB employers sign a CB
Employment Certification form; and complete and have your
current employer sign the DB
Employment Certification form. The entire package of necessary
forms can be downloaded here.
Completed forms should be mailed directly to:
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