Does any of the money earned from working an extra period (extended contract) count toward my retirement?
Yes, compensation earned from extra duty assignments, summer school, overload or extended contract teaching is credited to the cash balance component of your retirement benefit known as the Defined Benefit Supplement Program if you otherwise work in a full-time assignment. This compensation is not included in final compensation used to establish pension benefits associated with the traditional Defined Benefit Program. At retirement, disability, death or six months following termination of CalSTRS-covered employment, the funds in your account will be available to you or your beneficiary, whichever is applicable.
Defined Benefit Supplement Program Description
The Defined Benefit Supplement Program is a hybrid cash balance plan for Defined Benefit members, and acts as a means for CalSTRS to supplement the amount of compensation payable at retirement above your base salary. Contributions credited to the Defined Benefit Supplement Program are paid by the member and employer on compensation for service in excess of the full-time assignment—overload, summer school or after-school activities—for limited-term enhancements, or for certain compensation that CalSTRS determines is not creditable to its traditional Defined Benefit Program. Members may build their accounts by taking on such assignments.
Between January 1, 2001, and December 31, 2010, members of the Defined Benefit Program had a portion of their 8 percent employee contributions allocated to a Defined Benefit Supplement Program account established for each member. Since December 31, 2010, this redirected allocation has ended, and your entire 8 percent contribution is now credited to your Defined Benefit account. The redirection did not affect your CalSTRS retirement benefit. As of January 1, 2011, Defined Benefit Supplement accounts receive funds from earnings in excess of one year service credit, special limited-term payments or retirement incentives.
Learn more about the Defined Benefit Supplement Program.