What is a redeposit?
A redeposit is the purchase of all or a portion of the service credit you lost when you took a refund of your CalSTRS account. When you redeposit, you are buying back the service credit represented by the refund.
Who can make a redeposit?
You can redeposit your funds if you return to CalSTRS membership or are a member of certain other California public retirement systems.
What if I am using the Redeposit Cost Calculator and I do not remember the dates of my refunds?
Since this is an estimate, to the best of your knowledge enter the month and year of the refund. If you do not know the day of the refund, use the first of the month for the calculation.
Can I redeposit funds if my former spouse received a refund of my retirement account as part of a community property settlement?
Yes, and the process for this type of redeposit would be the same. The cost would be based on the total refund your former spouse received at the time of his or her refund.
Can I buy service credit, including redeposit, after I am retired?
No. You must be an active member in CalSTRS to buy any type of service credit.
Can I make a partial redeposit?
Yes. You can buy a portion of the service credit represented by the refund you received.
What if I received more than one refund, can I redeposit multiple refunds?
Yes. You can redeposit all or a portion of all your refunds. To redeposit a portion of multiple refunds, CalSTRS adds each refunded amount together to arrive at a total cost. You can then redeposit a portion of that total cost.
What is the cost to redeposit?
You will have to pay the amount of the original refund (or a portion for a partial redeposit) plus the interest that the refunded amount would have earned had the funds remained in your CalSTRS account.
Why must I pay interest?
Interest is added to reimburse CalSTRS for lost revenue, interest and investments. It covers the full cost of the benefit in today’s dollars.
How is interest applied?
CalSTRS calculates compounded regular interest, based on the assumed rate of return on CalSTRS investments, on your refund starting from the date of your original refund and ending 20 days after the receipt of your request by CalSTRS.
How is interest applied for multiple refunds?
CalSTRS calculates compounded regular interest, based on the assumed rate of return on CalSTRS investments, from the date of each refund until twenty days after the receipt of your request. The total cost for the redeposit is determined by adding each refunded cost together for one total redeposit cost.
Will the additional service credit I receive qualify me for benefit enhancements such as the longevity bonus, highest final compensation and enhanced age factor?
Yes. Service credit from a redeposit will qualify you for highest final compensation and enhanced age factor, if you are eligible. If you had more than 30 years of service credit prior to January 1, 2011, the service credit may increase your longevity bonus. However, service credit from a redeposit will not qualify for a longevity bonus if you did not have 30 years of service on that date.
How can I start the process to redeposit?
If you would like to redeposit, use the Redeposit or Purchase of Permissive Service Credit form. After you send the completed form to CalSTRS, and CalSTRS verifies your eligibility for the redeposit, you will receive a billing statement reflecting the total service credit and amount due. Please do not send money to CalSTRS until you have received a billing statement. Any payments received by CalSTRS without an official billing will be returned to you.
Can I pay for my redeposit by making a lump-sum payment?
Yes. Your billing statement will give you instructions about how to make a lump-sum payment. The payment must be received within 35 days of the original billing statement date to avoid additional interest.
Can I pay for my redeposit through a rollover?
Yes. CalSTRS can accept rollovers from most qualified retirement plans. CalSTRS cannot accept rollovers from Roth IRAs, SIMPLE, or Coverdell Education Savings Accounts, and post-tax funds. Information and instructions for rollovers will be on your billing statement.
CalSTRS cannot accept installment payments made from the monthly roll over of pre-tax funds.
Can I make monthly payments on a redeposit?
Yes. Current law allows you to make monthly payments over a maximum 10-year plan. Your billing statement will reflect the minimum monthly cash payment due and tax-deferred payroll deduction installment plans payable in no more than 10 years.
However, if you prefer a different tax-deferred payroll deduction installment plan (not to exceed 10 years), you may request it on your billing statement. Service credit will post to your account when full payment has been received.
If you are thinking about a payroll deduction, you should check with your employer for information about the type of payroll deduction they offer.
Your billing statement will include instructions about how to initiate monthly payments, either by cash or payroll deduction.
Can I continue to make payments for a redeposit after I retire?
No. You cannot continue installment payments after you retire or start to receive a disability retirement allowance. If you are making payments and will retire, you must make your final payment before you retire.
The final amount can be paid as a lump sum. If you have not finished your payments by the time you retire, you can receive prorated service credit for the total payments CalSTRS received at retirement.