Ask Jack Jack Ehnes

Does the 180-day separation apply to members whose district offers voluntary early retirement via a stipend or medical benefits?

Yes, the 180-day separation-from-service requirement applies to anyone who retires on or after January 1, 2013, and includes individuals who may be offered a voluntary early retirement with a stipend or medical benefits. This separation requirement applies to what is considered CalSTRS-covered employment under existing laws.

Recent legislation under AB 340, the Public Employees’ Pension Reform Act of 2013, expands the separation-from-service requirement (also known as the “zero-dollar earnings limit”) to anyone who retires on or after January 1, 2013, regardless of age at retirement. Under the legislation, such persons are subject to the separation-from-service requirement during the first 180 days of retirement. CalSTRS retirement benefit payments will be reduced dollar for dollar by any compensation earned from CalSTRS-covered employment during the first 180 calendar days following the most recent retirement date on or after January 1, 2013, up to the benefit payable during that period.

A retired member who has attained normal retirement age of at least 60 years old may be hired by a prospective employer to perform CalSTRS-covered work before 180 days have passed following his or her most recent retirement date on or after January 1, 2013, without his or her CalSTRS benefits being affected, if the appointment is necessary to fill a critically needed position. The employer must adopt a resolution approving such an appointment under specified circumstances, and CalSTRS must approve the employment before work begins. This is the only exception to the 180-day separation-from-service requirement.

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