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Preventing pension spiking

This page outlines how CalSTRS handles pension spiking, what we’ve done to improve our prevention, detection and resolution of suspected incidents of spiking, and how we intend to continue improving our capabilities.

CalSTRS takes pension spiking seriously

CalSTRS takes pension spiking seriously. We have a fiduciary responsibility to collect and ensure accurate reporting of compensation. Efforts that improve our ability to aggressively detect and pursue instances of suspected inappropriate pension benefit enhancement, known as spiking, are underway.

CalSTRS determines spiking to be the inappropriate enhancement of the retirement benefit, which most frequently occurs when an employer pays an excessive increase in compensation to a member at the end of his or her career. In instances where spiking has been determined, CalSTRS adjusts benefits to the appropriate level and collects overpayments in a manner consistent with the law.

Audits: CalSTRS regularly conducts school district audits and analyzes employer compensation reports to identify excessive increases that could enhance a member’s final pension benefit. This includes an analysis of other risk factors, such as large amounts of special compensation and inconsistent pay raises throughout a member’s career.

Compensation Review Unit: Since 2011, the anti-spiking, Compensation Review Unit (CRU) has focused on analyzing individual instances to determine if compensation changes have resulted in pension spiking.

Creditable compensation changes effective in 2015: Regulations give employers and CalSTRS staff clear guidelines to ensure all members are being credited properly, consistently and fairly for their service. The regulations will also help CalSTRS identify, evaluate and determine instances of pension spiking — the boosting of pay at the end of a career to increase a pension benefit.

AB 340, The Public Employee Pension Reform Act: Places a cap equal to 120% of the Social Security wage base on creditable compensation that may be counted toward CalSTRS retirement benefits for workers hired on or after January  1, 2013. The cap is adjusted each year based on changes to the Consumer Price Index for All Urban Consumers.

Pension abuse reporting

Information on pension spiking prevention 

Fact Sheet: Pension Spiking PreventionFact Sheet: Public Pensions for California Educators: What Everyone Should Know