Service credit is the accumulated period of time, in years and partial years, during which you receive creditable compensation and make contributions to the Defined Benefit Program. In addition to credit for actual service, you may receive service credit for creditable compensation for certain employer-approved leaves of absence. Service credit may also be purchased under certain circumstances.
As school districts, county offices of education or other governing bodies authorized school closures based on COVID-19 concerns, CalSTRS remains committed to working with our employer partners and understands the need for guidance.
On March 13, 2020, Governor Newsom issued Executive Order N-26-20, which ensured California public school districts, county offices of education and charter schools retain state funding even in the event of physical closure. The order provided that school districts must continue to pay employees even if schools are closed. As long as employees were paid during the closures, there should be no impact to a member’s service credit because their earnings should reflect the compensation they would have received had schools not been closed.
We’re working proactively with employers to monitor potential impacts school closures could have on service credit and reviewing each closure on a case-by-case basis.
For the latest on school closures and reopening safely, visit the State of California Safe Schools For All Hub.
Full-time educators typically earn one year of service credit for teaching one school year. For part-time educators, service credit for one school year is the hours or days actually taught compared to the full-time equivalent, or what would be required if employed full time in that position.
See your most recent Retirement Progress Report for your service credit balance.
Extra pay assignments and multiple positions
If you perform extra-pay assignments for school activities related to—and an outgrowth of—your school’s instructional or guidance program, or you are employed in multiple positions for one or more CalSTRS employers during the school year, you will earn service credit for the additional service. Extra-pay assignments may include:
- Yearbook or science club adviser
- Soccer or track coach
- Band director
At the end of the school year, CalSTRS will determine if you performed more than one year of service. Although you cannot earn more than one year of service credit in a single school year under the Defined Benefit Program, if you perform more than one year of service in a school year, you will receive one year of service credit under the Defined Benefit Program for service earned at the highest pay rates, and you will earn credits toward your Defined Benefit Supplement Program benefits.
Sixteen percent of your earnings for service that exceeds one full year, up to the compensation cap, will be credited to your Defined Benefit Supplement account at the end of the fiscal year. You contribute 8%, and your employer contributes 8.25% (0.25% of which goes to pay for sick leave in the Defined Benefit Program). Any contributions that you make in excess of 8% will be returned to you by your employer following the end of the fiscal year.
Compensation for excess service
The compensation for performing service in excess of one year is not used to calculate your compensation earnable for final compensation purposes. This is because final compensation is not based on total earnings but on compensation credited to the Defined Benefit Program.
If your employer adjusts your reported earnings after the school year ends, your Defined Benefit and Defined Benefit Supplement accounts may be adjusted, resulting in a change to your retirement benefit calculation.
At service retirement, CalSTRS will convert your unused sick leave to additional service credit using the information your employer provided on the Express Benefit Report form. As soon as you change employers during your career, coordinate with your former employer to arrange for the transfer of your accumulated unused sick leave to your new employer.
CalSTRS will accept an Express Benefit Report form from each of your employers during the last school year in which you earned creditable compensation.
If you are employed full time as an educator, sick leave credit is calculated by dividing the number of accumulated unused sick leave days, as certified by your last employer, by the number of base service days, excluding school and legal holidays, required to complete the last school year:
Accumulated Days of Unused Sick Leave / Number of Base Days for Full-time Service* = Service Credit Granted
*The base service days cannot be fewer than 175 days.
Sick leave service credit cannot be used to meet eligibility requirements for service retirement; however, under CalSTRS 2% at 60, up to two-tenths of one year of unused sick leave may be used to qualify for:
- Career factor, which is given for 30 or more years of service.
- 25-year threshold for one-year final compensation.
- Longevity bonus, if you qualified for the longevity bonus on or before December 31, 2010.
For members under CalSTRS 2% at 62: The career factor and one-year final compensation benefit enhancements are not available.
Rick Jones has taught for 20 years. He has 125 days of unused sick leave and 182 base service days.
125 (Unused Sick Days) / 182 (Number of Days for Full-time Service) = .687 Service Credit for Unused Sick Leave
This is added to Rick’s 20 years of credited service for a total of 20.687 years service credit.
Permissive service credit
You may be eligible to purchase service credit for:
- Creditable service performed part-time or as a substitute teacher in the California public school system before you were a CalSTRS member or between refunding and becoming a CalSTRS member again.
- Prior service covered under the CalSTRS Cash Balance Benefit Program.
- Time spent on a qualifying employer-approved leave of absence or sabbatical for which you did not make retirement contributions to CalSTRS.
- Certain active military leave.
- University of California or California State University teaching service not credited or purchasable under another retirement system.
- Employer-approved maternity or paternity leave, up to 24 months.
- Out-of-state or foreign school service performed in a public education institution.
- Employer-approved leave under the federal Family and Medical Leave Act or the California Family Rights Act.
- Fulbright Teacher Exchange Program.
- Certificated teaching in a child care center, school for the blind or deaf, or Native American school in California.
Learn more about the purchase of permissive service credit.
Learn more about contribution rates.
You may purchase a portion, rather than all, of the permissive service you have available. However, you cannot purchase service credit if you have received, or are eligible to receive, credit for the service in another public retirement system. You must complete payment for the service credit before the effective date of your retirement.
See the Purchase Additional Service Credit brochure for additional information.
Estimating the cost of permissive service credit
The cost to purchase permissive service credit depends on your highest average annual compensation earnable in the last three school years of CalSTRS-covered employment, the amount of service credit being purchased, and the current permissive service credit contribution rate for your age.
View the current contribution rates.
To calculate your cost:
- Multiply the amount of service credit (years) you want to purchase by the contribution rate for your age.
- Multiply the result by your highest annual compensation earnable during the last three school years.
Rates may be adjusted each July 1. The new rates are available in spring by contacting CalSTRS.
You may also estimate the cost to purchase permissive service credit by using our calculators.
Nonqualified service credit
Prior to January 1, 2013, members with at least five years of service credit were able to purchase up to five years of nonqualified service credit, also known as “air time.” Nonqualified service is not connected to any prior employment.
Nonqualified service credit cannot be used to qualify for the career factor or the 25-year threshold for one-time final compensation; however, nonqualified service credit can be used to qualify for the 30-year service credit requirement for retirement between ages 50 and 55 for members under CalSTRS 2% at 60.
After January 1, 2013, members may no longer purchase nonqualified service credit.