Service Credit Purchase with Rollover Funds
Who is eligible to roll over pre-tax funds to purchase service credit or redeposit previously withdrawn contributions?
Any active or inactive member who has previously received a refund of contributions or is entitled to purchase service credit may elect to roll over pre-tax funds from 401(a), 401(k), 403(b), 457(b) or traditional or conduit IRA plans.
I plan to retire next month and have already made a request to CalSTRS to purchase service credit. Will I still have to complete my redeposit or service credit purchase before I retire?
No. Any billing request made before your retirement date will be honored as a request from an active member. If you receive the billing statement after your effective date of retirement, you will have 35 days from the billing statement to complete the purchase. We understand it can take longer than 30 days for CalSTRS to receive a rollover from your financial institution. As long as you respond back to CalSTRS within the 35 days, we will accept your rollover. You will be able to roll over pre-tax funds from 401(a), 401(k), 403(b), 457(b), or SEP IRA or IRA (Traditional or Conduit) plans.
What if the amount of my rollover is more than the amount of service credit available for purchase?
The total amount rolled over must not be greater than the amount required for the redeposit or to purchase the available service credit. If your rollover amount is more than the amount required for the redeposit or purchase of service credit, CalSTRS will return all pre-tax funds to the rollover company.
My spouse has an IRA. Can I use that account to roll over pre-tax funds to purchase my service credit?
No. CalSTRS cannot accept a rollover unless the member’s name is on the account from which the money is being rolled over.
I have pre-tax funds available to roll over. How do I find out if I have service credits available to purchase?
If you believe you have service credit available to purchase, you may contact CalSTRS Billings Unit by mail to receive a billing statement.