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Two Benefit Structures

The California Public Employees’ Pension Reform Act of 2013 (Chapter 296, Statutes of 2012) made significant changes to the benefit structure that primarily affect members first hired to perform CalSTRS creditable activities on or after January 1, 2013. 

As a result, CalSTRS has two benefit structures:

  • CalSTRS 2% at 60 – Members first hired on or before December 31, 2012, to perform CalSTRS creditable activities.
  • CalSTRS 2% at 62 – Members first hired on or after January 1, 2013, to perform CalSTRS creditable activities.

The 2 percent, also known as the age factor, refers to the percentage of your final compensation that you will receive as a retirement benefit for every year of service credit.

The basic age factor for members under CalSTRS 2% at 60 is 2 percent at age 60 (the age factor gradually decreases to 1.1 percent at age 50 if you retire before age 60, and increases to a maximum 2.4 percent at age 63 if you retire after age 60). 

The age factor for members under CalSTRS 2% at 62 is 2 percent at age 62 (the age factor gradually decreases to 1.16 percent at age 55 if you retire before age 62 and increases to a maximum 2.4 percent at age 65 if you retire after age 62).

Other benefit differences for CalSTRS 2% at 62 include:

  • A three-year final compensation period (based on the highest average annual compensation earnable for 36 consecutive months regardless of years of service credit).
  • Lower compensation cap.
  • No career factor.
  • A higher retirement age (you cannot retire as early as age 50 with 30 years of service credit).

Learn more about the two benefit structures in the Member Handbook.

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