| |
General Questions
- What is Foreign School Service Credit?
Effective January 1, 2008, members can purchase service credit performed as an employee of a public educational institution, located outside of the United States and its territories, that receives a portion of its funding from any foreign or domestic public source and provides a level of education comparable to kindergarten through 12th grade.
- How do I start the process to buy foreign school service credit and what needs to be verified so I can make this purchase?
To purchase foreign school service credit, submit a completed Out-of -State or Foreign School Service Credit Certification form for each former foreign retirement system or foreign school employer.
You must certify that you agree to forfeit all rights to the benefits under your former retirement system before you can purchase the service credit with CalSTRS. Service credit cannot be purchased if you are receiving, or are eligible to receive a benefit for this service in another public retirement system. The completed forms must include the proper certification from your former retirement system(s), former employer(s) or both, where applicable.
- Is there a maximum amount of foreign school service credit that I can purchase?
No, you may purchase all or a portion of your available service credit at any time prior to retirement.
- I am retiring next month. Can I request to buy this service credit prior to my retirement date and then obtain the verification after my retirement date?
Yes. You must request to purchase service credit prior to your retirement date by notifying CalSTRS in writing
by sending a copy of the Out-of-State or Foreign School Service Credit Certification form.
We recommend you remain in contact with CalSTRS Service Credit Support staff if you have difficulty obtaining verification. This will ensure your eligibility to complete the purchase after you have retired.
- What happens after I return my completed Out-of-State or Foreign School Service Credit Certification (OSSC304)?
CalSTRS will:
- Review your certification
- Verify your eligibility
- Determine how much service you may purchase
- Calculate your cost
- Send you a billing statement
The billing statement includes information regarding how you may pay for your purchase.
- Can I pay for my Foreign Service credit through a rollover?
Yes, CalSTRS can accept rollovers from most qualified U.S. retirement plans.
However, CalSTRS cannot accept rollovers from:
- Roth IRAs
- SEP
- SIMPLE
- Coverdell Education Savings Accounts
- Directly transferred, post-tax funds
Information and instructions for rollovers will be on the back of your billing statement.
You cannot have monies from foreign plans directly transferred to CalSTRS (per Internal Revenue Code sections
402(c)(8)(A) and 401(a); Treasury Regulation section 1.401-1(a)(3)(i)).
CalSTRS can only accept funds directly from domestic plans organized in the United States. If the funds can
be transferred to you, you can send your post-tax payment to CalSTRS. We recommend you speak to a tax advisor before
withdrawing funds from a foreign plan for the potential foreign and U.S. tax consequences.
Suggested Resources:
U.S. Department of State Service
|
