Cash Balance Benefit Program
Can I participate in the Cash Balance Benefit Program?
It depends upon whether your employer offers the Cash Balance Benefit Program and your basis of employment.
If you are hired as a part-time, substitute, adjunct or temporary educator by a prekindergarten–12 district, county office of education, participating charter school or community college district that offers the Cash Balance Benefit Program, then you are eligible to participate.
If your basis of employment changes to 50 percent or more of the full-time position (or more than 67 percent for community college districts), or if you are no longer considered a temporary employee, you will automatically become a member of the Defined Benefit Program.
Can I elect into both Cash Balance and Social Security?
Yes, if the two programs are elected for service at different districts.
Is membership mandatory in the Cash Balance Benefit Program for all new employees hired to work less than half-time after July 1, 1996?
No, employers may offer whatever choice of plans they may wish to provide for employees.
If my employer begins to offer the Cash Balance Benefit Program, can I elect to participate If I am already a Defined Benefit Program member hired to work less than half-time?
Yes, you can elect to participate in the Cash Balance Benefit Program at the time your employer offers it and your contributions to the Defined Benefit Program will stop.
Can I work more hours than 50 percent or half-time and remain in the Cash Balance Benefit Program?
Yes, as long as your employer does not change your time base from less than half time.
Can I roll over money from other retirement plans to the Cash Balance Benefit Program?
Yes, as long as the rollover is from an eligible retirement plan and allowable under applicable federal statute law.
Can I roll over money from my Cash Balance account to other retirement plans?
Yes, but all CalSTRS creditable service must be terminated.
Do I have to wait six months to roll over my Cash Balance account?
Yes, if you are less than 55 years of age.
If my district chooses to discontinue participation in the Cash Balance Benefit Program, what happens to my account?
Your account will remain with the CalSTRS Cash Balance Benefit Program and will continue to receive compounded interest. If you terminate all eligible employment, then you may withdraw their funds.
When can I retire?
Normal retirement age under the program is 60 years of age for participants who are not subject to the Public Employees’ Pension Reform Act of 2013. Normal retirement age under the program is 62 years of age for participants who are subject to the Public Employees’ Pension Reform Act of 2013. However, you may retire as early as age 55 years.
Can I receive a monthly benefit?
The normal form of retirement benefit is a lump-sum payment. You may elect to receive the benefit in the form of a monthly annuity, provided you have at least $3,500 in your account.
What happens to my money if I quit working?
- Your contributions as well as your employers contributions may stay in your account and continue to draw compounded interest until distribution is required by federal law. Currently, federal law requires distribution of benefits at age 70 ½.
- You may apply for a termination benefit. The termination benefit will be payable six months following the date of termination of creditable service subject to coverage by the plan. Any new creditable service will cancel an application for a termination benefit. A termination benefit can only be paid once in a five-year period.
May I simultaneously contribute to the Defined Benefit Program and the Cash Balance Benefit Program?
Yes, as long as you work 50 percent or less in each position.
If I am working for three districts who offer the Cash Balance Benefit Program, will this service be aggregated?
No. Each of your employers will independently report each of your Cash Balance service to CalSTRS as long as the time base for which you were hired is less than 50 percent in each district. You can remain a Cash Balance Benefit Program participant in all districts.
If I work in three districts that have taken formal action to provide the Cash Balance Benefit Program and one district discontinues participation, am I still eligible to contribute to the remaining Cash Balance Benefit Program employers?
Yes, as long as you do not elect or are mandated into the Defined Benefit Program.
If I am employed in three districts and elect to participate in the Defined Benefit Program in one of those districts, am I still eligible to contribute to the Cash Balance Benefit Program?
Yes, you can continue to contribute to the Cash Balance Benefit Program as long as your basis of employment remains 50 percent or less in each district.
If I am employed in three districts and my basis of employment changes to greater than 50 percent of the full-time equivalent for the position in one of those districts, am I still eligible to contribute to the Cash Balance Benefit Program?
It depends. If the 50 percent or greater position is the Cash Balance district, then you must contribute to Defined Benefit for that district. However, you can contribute to the Cash Balance Benefit Program in the other districts if the basis of employment remains less than 50 percent.
If you take a full-time position in one district, then all service must be reported to the Defined Benefit Program.
Can I belong to three different retirement plans if I work in three districts?
Yes. For example, if you are employed in three different districts, you could have coverage under the Cash Balance Benefit Program, Social Security or an alternative plan.
The availability of retirement plans coverage that you may select is dependent on which plans your employers are offering.
If I am a Cash Balance annuitant, will I be under the same separation-from-service requirement as a Defined Benefit member?
Yes. Under the separation-from-service requirement, if you perform service creditable to CalSTRS within the first 180 calendar days of your most recent retirement date, CalSTRS will reduce your Cash Balance annuity by the amount you earned, dollar-for-dollar, during the 180 calendar days after retirement.
If I retire from Cash Balance and elect to receive my benefit as a lump sum, when will it be paid?
To comply with the separation-from-service requirement, your retirement benefit will not be payable until 180 calendar days after the date you terminate employment. If you return to work in a CalSTRS-covered position during this waiting period, your retirement will be canceled and you will not receive your benefit.
If I am a Defined Benefit retiree, can I contribute to the Cash Balance Benefit Program?
No. Retired Defined Benefit members, who return to work in a CalSTRS-covered position, cannot contribute to the Cash Balance Benefit Program. All earnings are subject to the postretirement earnings limit.