Service Retirement During Evaluation of a Disability Application

General Information

What is “service retirement during evaluation of a disability application”?

Eligible CalSTRS members can apply for and receive a service retirement benefit while their application for disability benefits is being processed.

Education Code Section 24201.5

How do I know if I am eligible to receive a service retirement during evaluation of a disability application?

You must meet the eligibility requirements for both service retirement and disability in order to apply for service retirement during evaluation of a disability application.

You are eligible to service retire as early as age 50 if you have earned at least 30 years of service credit (for members under CalSTRS 2% at 60), or at age 55 if you have earned at least five years of service credit, as of your retirement date.

Please keep in mind that in order to be eligible for service retirement you cannot be receiving any compensation from your employer.

You are not eligible to apply for disability benefits if you are currently receiving a service retirement benefit. For more information about eligibility requirements for disability, you can meet with a CalSTRS benefits specialist, call us or see the Disability Benefits section.

How do I apply for service retirement during evaluation of a disability application?

If you wish to receive a service retirement benefit pending a decision on your disability application, you must fill out and submit a completed Disability Benefits Application. Indicate on the Disability Benefits Application that you are applying for service retirement during evaluation of a disability application.

The Disability Benefits Application must be submitted to:

CalSTRS
Attn: Disability Benefits
P.O. Box 15275, MS-43
Sacramento, CA 95851-0275

If I apply for service retirement during evaluation of a disability application, when will my benefits start?

Your service retirement benefit effective date will be the retirement date you list on your application, so long as the following conditions are met:

  1. Your application is executed no earlier than six months before your retirement effective date.
  2. Your retirement effective date is no earlier than the first day of the month in which the application is received by CalSTRS in Sacramento.
  3. Your retirement effective date is later than the last day of creditable service for which compensation is payable to you.
  4. If applicable, your retirement effective date is no earlier than one year following the date on which you terminated a prior retirement allowance.

Your disability benefit effective date will be the day after your last received compensation or the first of the month in which your Application for Disability Benefits was received, whichever is later. However, it cannot be later than your service retirement effective date. You are not eligible to apply for disability benefits if you are already receiving a service retirement. Therefore, it is important to send in your applications concurrently, even if you do not yet have all of the medical documentation required to prove your disability.

Can I elect different choices under my Service Retirement and Disability Retirement (Coverage B) benefits?

Service Retirement and Disability Retirement are two separate benefits. You must make your election to receive a Member-Only Benefit or modified benefit by electing an option beneficiary separately under each. You may make the same or different elections for each benefit. Please complete this section on each application even if you are electing the same choice.

I have a preretirement election of an option. Does this affect my application for a service retirement pending during evaluation of a disability application?

Yes. Depending on whether you are Coverage A or Coverage B, your preretirement election of an option may affect your application for service retirement during evaluation of a disability application. See below:

Coverage A members:

  • Your preretirement election of an option is specific to your service retirement benefit and will not affect your disability allowance benefit. However, your service retirement benefit will be modified based on your preretirement election of an option.
  • If you are receiving service retirement during evaluation of a disability application and your application for disability benefits is rejected, your preretirement election of an option and your modified service retirement benefit will remain in effect.
  • If you are receiving service retirement during evaluation of a disability application and your application for disability benefits is approved, your preretirement election of an option will remain in effect until you choose to apply for service retirement

Coverage B members:

  • If you are receiving service retirement during evaluation of a disability application and your application for disability benefits is rejected, your preretirement election of an option and your modified service retirement benefit will remain in effect.
  • If you are receiving service retirement during evaluation of a disability application and your application for disability benefits is approved, your preretirement election of an option will remain in effect until your disability benefit start date. At that point, the election you have made under disability retirement will take effect.

How is my application for a service retirement during evaluation of a disability application affected if I elect an option on the service retirement application?

Your election of an option under service retirement is specific to your service retirement benefit and will not affect your disability retirement option election. However, your service retirement benefit will be modified based on your election of an option.

If your application for disability benefits is rejected, your modified service retirement benefit will remain in effect. If your application for disability benefits is approved, your service retirement application and your election of an option will be cancelled.

Can I take my Defined Benefit Supplement Program distribution while on service retirement during evaluation of a disability application?

Upon service retirement, you will choose how to receive your Defined Benefit Supplement Program funds under existing eligibility criteria (see Defined Benefit Supplement FAQs for further details).

Because your Defined Benefit Supplement Program payout is affected by option choices, the payout amount may differ if you are approved for a disability benefit. If you are approved for a disability benefit, any Defined Benefit Supplement Program payout under service retirement must convert to a Defined Benefit Supplement Program payout under disability and may require the return to CalSTRS of previously paid Defined Benefit Supplement Program funds.  The returned Defined Benefit Supplement Program funds would then be redistributed according to the laws governing the distribution of the Defined Benefit Supplement Program under disability.

There are tax and rollover considerations that could impact your choices in this matter; please see the Tax Considerations for Rollovers publication for more information.

Will I receive service credit for my unused sick leave if I apply for service retirement during evaluation of a disability application?

No. Your service retirement benefit will not include service credit for unused sick leave while your application for disability benefits is being processed.

If your application for disability benefits is not approved, any service credit you receive for unused sick leave will then be added to your account and your benefit will be recalculated to include the additional service credit.

Can I participate in Reduced Benefit Election if I apply for service retirement pending disability?

No. If you apply for service retirement during evaluation of a disability application you will not be eligible to participate in the Reduced Benefit Election Program (formerly the Limited-Term Reduction Program) and should not complete the Reduced Benefit Election section on the Service Retirement Application form.

If I elect to receive a service retirement during evaluation of a disability application, and my application for disability benefits is not approved, will I be eligible to re-apply for disability?

No. If your application for disability benefits is not approved and you have started to receive your service retirement benefit, you will not be eligible to re-apply for disability.

What happens to my service retirement benefit if my application for disability benefits is approved?

If your application for disability benefits is approved, your service retirement benefit will be automatically cancelled effective the start date of your disability benefit. You will be issued a retroactive payment for the balance between your service retirement benefit and disability benefit amounts.

What if I am receiving a service retirement during evaluation of a disability application and I die before my application for disability benefits is approved?

If you die before a determination is made on your application for disability benefits, your application for disability benefits will be cancelled, and the benefit choices you elected under service retirement will continue upon your death.

Where can I find additional information about service retirement during evaluation of a disability application?

Contact Member Services at 800-228-5453 (you can reach Disability and Survivor Benefits directly by pressing 4 then dialing extension 3585); or email CalSTRS.