CalSTRS Hybrid Retirement System

General Information

CalSTRS administers a hybrid retirement system consisting of a traditional defined benefit plan, a cash balance plan and a voluntary defined contribution plan:

Traditional defined benefit plan: Your CalSTRS retirement benefit is a defined benefit pension. It’s based on the following formula, not on how much you contribute or how well CalSTRS investments perform:

service credit x age factor x final compensation = your retirement benefit

Cash balance plan: CalSTRS Defined Benefit Supplement is a cash balance plan. Your contributions and your employer’s contributions earn a guaranteed annual interest rate. At retirement, you receive all the funds in your account. CalSTRS Cash Balance Benefit Program, an alternative to membership in the Defined Benefit Program for part-time educators, is also a cash balance plan.

Defined contribution plan: With CalSTRS Pension2, you can set aside additional savings for retirement. Select from a variety of investment plans, then contribute to your tax-advantaged account through paycheck deductions. When you retire, the amount you have at retirement depends on your contributions, investment gains or losses, and account expenses.