Ask the CEO | July 19, 2022
CalSTRS knows how difficult rising costs are for nearly everyone, especially our retirees. We offer two programs intended to ease the impact of inflation on you and your fellow retired educators.
Your CalSTRS pension has built-in protection against inflation, from both a simple annual benefit increase and an anti-inflation program called the Supplemental Benefit Maintenance Account (SBMA).
Under California law, you will receive an annual automatic 2% benefit increase beginning September 1 after the first anniversary of your retirement. For members who retired on or after January 1, 2014, the State Legislature cannot reduce the 2% annual benefit adjustment.
In addition to the annual 2% increase, CalSTRS provides purchasing power protection through the SBMA, which is one of the strongest anti-inflation programs of any public pension in the nation. Purchasing power is a measure of how a member’s retirement benefit keeps pace with inflation. For example, if a member’s benefit stays the same but prices double, the purchasing power is only 50% of what it originally was. Based on inflation, SBMA increases member benefits to maintain 85% of a member’s initial purchasing power.
Each year, CalSTRS assesses the level of purchasing power for our retirees. Eligible members automatically receive SBMA benefits as part of their pension and don't need to contact CalSTRS about eligibility or to enroll.
SBMA payments are issued quarterly on the first of the months of October, January, April and July.