If the Governor’s proposal is passed, would an instructor with more than 35 years have to forfeit the 2.4% benefit formula?
Under the current benefit formula, members are entitled to a benefit based on age, final compensation and years of service credit at retirement. This benefit can be as much as 2.4 percent of final compensation per year of service credit.
The Governor proposes to increase the retirement age for all new CalSTRS members (excluding existing members already in the system) to age 67 to qualify for full retirement benefits. Under the plan, the defined benefit portion of the benefit would not exceed 1.43 percent of final compensation per year of service credit. Because this change only applies to new members, any service performed in the past, or in the future, by existing members would not be affected. Keep in mind that the Governor’s proposal must work its way through the legislative process in order to become effective.