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Are you a part-time educator? Here are three things you should know about Cash Balance

Pension Sense blog | February 24, 2021

If you’re a part-time, substitute or temporary teacher, you may be eligible to participate in CalSTRS Cash Balance Benefit Program.

To be eligible for Cash Balance, your employer must offer both CalSTRS Defined Benefit Program and Cash Balance Benefit Program, and you must be employed less than full time. For a K-12 district, your time base must be less than half time. For a community college district, you can be eligible if you are hired on a temporary basis, including being hired for not more than 67% of a full-time position. Cash Balance may be offered exclusively or along with other retirement programs such as Social Security.

If you are eligible, here are three things you should know about Cash Balance:

  1. If you participate, you will typically contribute 4% of your salary to Cash Balance. Your employer must contribute an amount equal to at least 4% of your salary.
  2. Your Cash Balance Benefit account balance includes your contributions, your employer’s contributions, guaranteed interest and any additional earnings credit you earn while working. (Additional earnings credits can be declared by the Teachers’ Retirement Board when the Cash Balance Benefit Program surpasses certain thresholds after periods of substantial investment earnings.)
  3. At retirement, you have the option of taking your benefit as a lump-sum or an annuity. (To receive an annuity, you must have an account balance of at least $3,500 at retirement).

As a part-time educator, you are also able to choose the Defined Benefit Program at any time during your career. Contact your employer to determine your plan eligibility. For more information on Cash Balance, see our Cash Balance Benefit Program booklet.