Option Factor Changes in 2011

What's New

Effective September 1, 2011, option factors will change. The change was approved by the Teachers’ Retirement Board at its December 2010 meeting.

Option Factors

Electing an option allows you to distribute your retirement benefit over your life and the life of your option beneficiaries. An option provides you with a reduced retirement benefit based on a percentage of your Member-Only Benefit. That percentage is called an option factor. 

The change in option factors affects the calculated benefit and may result in a slight increase or decrease of the modified monthly benefit.   


  • Member’s age: 60
  • Beneficiary’s age: 55  
  • Member-Only Monthly Benefit: $4,000  
  • Option election: 100% Beneficiary Option 
Current Calculation 0.8689 $4,000 X 0.8689 = $3,475.60
New Calculation 0.8654 $4,000 X 0.8654 = $3,461.60

In this scenario, the modified monthly benefit is reduced $14.00 or 0.4 percent.

Affected Benefits

Defined Benefit Program members electing an option at retirement or pre-electing an option under Service Retirement or Disability Retirement with an effective date on or after September 1, 2011 will be affected. 

Benefits Not Affected

Defined Benefit members electing a Member-Only Benefit are not affected.

The change in option factors has no effect on members who have already retired, unless you choose a new option after retirement.

More Information

To learn more about electing an option and option factors, see Chapter 6 of the CalSTRS Member Handbook 2011

If you have questions regarding the new option factors, contact CalSTRS online or at 800-228-5453.