EIC99-7 Volume 15 Issue 7
CalSTRS/CalPERS Election Requirements
The purpose of this circular is to remind employers of the requirements of a CalSTRS/CalPERS election of membership as authorized by Sections 22508 and 22508.5 of the Education Code.
As many of you are aware, the election of CalSTRS or CalPERS membership pursuant to Sections 22508 and 22508.5 of the Education Code made in the first 60 days of hire is an irrevocable election for all future creditable service subject to coverage under the CalSTRS Defined Benefit (DB) Program. There has been a significant amount of confusion regarding when an employer should give the employee the right to elect membership in another retirement system. Shown below are some examples to assist you in making an appropriate determination.
- A CalPERS classified school employee accepts a CalSTRS qualifying full-time certificated position within the same or different school district. The employee has 60 days from the date hired in the CalSTRS’ qualifying position to elect to remain in CalPERS, or the employee will automatically be enrolled in CalSTRS. If the employee elects CalPERS, all future CalSTRS creditable service will be reported to CalPERS.
- A full-time certificated counselor who is a member of the CalSTRS DB Program in District X accepts a full-time position with District Y as the Business Manager, which does not require a credential; therefore subject to CalPERS membership. The employee has 60 days from the date hired to elect to remain in CalSTRS, or the employee will automatically be enrolled in CalPERS.
- District X hires a full-time teacher from the California State University system (e.g. CSU Fullerton, or CSU Sacramento). Although the employee was a CalPERS member, he is not eligible for the 60-day election because his CalPERS membership was not based on school employment in a K-14 district. The employee is automatically enrolled in CalSTRS.
- District X hires a part-time or adult education instructor (night school) who is also employed in a full time classified position. The employee can permissively elect to have the part time instructional service reported to CalSTRS. The employee would be simultaneously enrolled in both systems. The classified service reported to CalPERS and part-time/adult education service is reported to CalSTRS.
- District X hires a substitute teacher who is a part-time attendance clerk and a CalPERS member. The employee can elect to have the substitute service reported to CalPERS. The employee also has the right to permissively elect CalSTRS for the substitute service. By permissively electing CalSTRS, the employee would have concurrent membership in both systems.
If no election is made, the substitute service is reported to CalSTRS as non-member. Upon performing 100 or more complete days of creditable service during the school year for the employer, the employee will qualify for mandatory membership in the DB Program. Since the employee did not previously execute their right of election, they are afforded another retirement system election opportunity.
- Community College District X hires a part-time instructor to teach training courses on contract for the local police department that are not eligible for state apportionment. The employee is also currently a CalPERS member employed full-time by the County Sheriff’s Department. The employee is not eligible for the 60-day election because the service performed as an instructor is not creditable under CalSTRS.
- District X hires a substitute teacher who permissively elects CalSTRS and is also a CalPERS classified member. The employee subsequently is hired to teach full-time. The employee is not eligible for the 60-day election because the original “permissive” CalSTRS election was irrevocable for all future CalSTRS creditable service.
The preceding examples have been given as a guide to assist employers in determining when to provide employees with the Retirement System Election form (MR372) for retirement system coverage.
If you have questions regarding the election for retirement system coverage, please contact your CalSTRS Membership Division technician or supervisor.
Employer Information Circulars [EIC] are sent to school district and community college employers as informal guidance that provides immediate information on a single topic.
For an accessible version of this circular, contact ADACoordinator@CalSTRS.com.