YOUR SMART RETIREMENT MEMBER KIT
Near Retirement
2015
THE BENEFIT OF A LIFETIME
. Dear CalSTRS member,
We invite you to take a few minutes to look
through your kit. You’ll find information important
to your career stage, including ways to increase
your benefit.
If you haven’t already done so, take advantage
of our retirement planning workshops, including
the Retirement Application Roundtable where
you can get help completing your application. We
also encourage you to view our member benefit
videos, including the one on beneficiary options,
at CalSTRS.com/videos.
Our benefits specialists can also help you plan
your retirement by providing benefit estimates
and explaining how different decisions will
affect your benefit. It’s easier to schedule an
appointment during the nonpeak months of
August–March.
Thank you for dedicating your career to
education.
Sincerely,
Jack Ehnes
Chief Executive Officer
Your Retirement Timeline
When you’re within a year of retiring, or even
before, be sure to read the Your Retirement Guide
booklet, available at CalSTRS.com/publications.
Inside you’ll find tips, checklists and answers to
these important questions:
• How much will my benefit be each month?
• Do I want to provide a monthly benefit to
someone after I die?
• How do I want to receive my Defined Benefit
Supplement funds?
See page 22 for a retirement timeline.
.
9
Things to do
now for your
smartretirement
You’ve been helping
students build their
futures, now it’s time to
get ready for yours!
THE BENEFIT OF A LIFETIME
Your defined benefit pension may
be your greatest asset. Take a
few minutes now to learn more.
Access your account information
on myCalSTRS
6
Estimate your retirement
benefit 8
Review your Retirement
Progress Report 12
Increase your retirement benefit
13
Get the facts on Social Security
15
Increase your 403(b)
or 457(b) contribution
16
Name your one-time
death benefit recipient
18
Attend a benefits
planning session
20
Get ready to retire
21
CalSTRS is governed by the Teachers’ Retirement Law, available at CalSTRS.com, and other
sections of state law. If there is a conflict between the law and this booklet, the law prevails.
. Tools for Your Smart
Retirement
Connect With Us on
Social Media
Connect and engage with us on your favorite
social media. We're here because you are. It's
a great way to keep up on the latest CalSTRS
news, share ideas and connect with other
educators. Invite your colleagues to join us too.
View your personal accounts,
complete and submit forms, and
more at myCalSTRS.com.
CalSTRS.com/stay-connected
CalSTRS Is Mobile Friendly
📹 Member Benefit Videos
Browse our library of three- to five-minute
member education videos:
U
nderstanding the Formula:
Know how your retirement benefit
is calculated.
The Gap: Consider how much of your
working salary you'll need to live the
retirement you want.
Visit CalSTRS.com
from wherever you are.
Defined Benefit Supplement: Learn
about this additional source of money
for retirement.
Beneficiary Options: Learn how to
provide a lifetime monthly benefit to
your loved ones after your death.
Introduction to Social Security: Get
the facts if you’re counting on a Social
Security benefit from your spouse or
other employment.
CalSTRS.com/videos
4
CalSTRS 2015 • Member Kit
CalSTRS Member Handbook
Find the current version
at CalSTRS.com/publications.
Understand your benefits.
.
Get Smart About Your Future
Your Benefit of a Lifetime
As a vested member of CalSTRS, you’re entitled to a guaranteed, lifetime monthly benefit when you
retire. Your retirement benefit is a defined benefit pension that is based on a formula set by law,
not on how much you contribute or how well investments perform:
service credit x age factor x final compensation = your retirement benefit
CalSTRS Is Here for You
Our primary responsibility is to provide you with
retirement, disability and survivor benefits. We also
offer resources specific to your career stage:
•• Your annual Retirement Progress Report, available
on myCalSTRS, which provides a summary of your
accounts and service credit.
•• Online services and forms on myCalSTRS.
•• ustomer service by email, phone, letter or
C
in person at local CalSTRS offices across the state.
•• nowledgeable CalSTRS representatives to help
K
you understand your benefits and more.
Your CalSTRS Retirement Benefit—
Will It Be Enough?
The median CalSTRS retirement benefit replaces
about 60 percent of a member’s salary. You’ll
need to close any gap between your retirement
goal and your retirement benefit with savings
and investments, such as CalSTRS Pension2.
See pages 16–17 to learn more.
•• ublications, including the Your Retirement Guide
P
booklet, workshops and member education videos.
•• alSTRS Pension2® 403(b) and 457(b) plans with
C
low fees and expenses for additional income in
retirement.
•• Side-by-side investment comparisons of 403(b)
plans in California at 403bCompare.com.
Your savings
and investments
Your CalSTRS
retirement
Find publications, forms, videos, workshops and
more at CalSTRS.com.
CalSTRS 2015 • Member Kit
5
.
Access Your CalSTRS Information Online, Any Time
myCalSTRS offers easy, secure and convenient access to your accounts and CalSTRS forms.
With myCalSTRS, you can:
1
Update your contact information.
4
2
Access your annual Retirement
Progress Report and view information
reported by your employer.
Name and update your beneficiary
designations.
5
Submit and receive secure messages to and
from CalSTRS representatives.
View your account balances.
6
Complete and submit forms online.
3
Ready to retire?
Need help registering?
Use myCalSTRS to:
• Make a preretirement election of an option
to secure a lifetime monthly benefit to a
loved one when you die.
View the self-paced, interactive online
registration guide on myCalSTRS.
• Apply for retirement.
How do you picture
your retirement?
e with family
Spending tim
Star ting
Indulgin
g in you
r
favorite
hobbies
6
CalSTRS 2015 • Member Kit
Traveling the world
a new c
areer
. Your CalSTRS Retirement at a Glance
If you’re like most educators, your retirement income will come from four main sources:
• Your CalSTRS monthly retirement benefit.
• Your CalSTRS Defined Benefit Supplement funds.
• Your investment savings, such as CalSTRS Pension2 403(b), 457(b) and Roth 403(b) accounts.
• Other personal savings.
CalSTRS administers a hybrid retirement system consisting of traditional defined benefit, cash balance and voluntary
defined contribution plans:
Traditional defined benefit plan: Your CalSTRS monthly retirement
benefit is a defined benefit pension based on a formula:
service credit x age factor x final compensation
Cash balance plan: Your CalSTRS Defined Benefit
Supplement account is a cash balance plan. Your
contributions and your employer’s contributions earn a
guaranteed annual interest rate. All the funds in your
account are yours at retirement.
Defined contribution plan: CalSTRS Pension2 offers 403(b),
457(b) and Roth 403(b) plans for additional income in
retirement. Contribute to your tax-advantaged account through
paycheck deductions.
The amount you have at retirement
depends on your contributions, investment gains or losses,
and expenses.
Your income in retirement is a
shared responsibility between
CalSTRS and you.
Valerie
Elementary school teacher
CalSTRS member for 11 years
CalSTRS 2015 • Member Kit
7
. Estimate Your Retirement Benefit
Your primary retirement benefit is based on a formula set by law:
service credit x age factor x final compensation
You can retire as early as age 50 with at least 30 years of service credit, or age 55 with at least
five years of service credit—or less, if retiring concurrently from certain other California public
retirement systems.
Service Credit
Final Compensation
Service credit is the number of school years, including
partial years, you have worked and contributed to
CalSTRS:
Final compensation is your highest average annual
compensation earnable for 36 consecutive months, or
your highest 12 consecutive months if you have more
than 25 years of qualified service credit.
•• ou earn service credit every day you work or are
Y
on paid leave.
•• ou can earn up to one year of service credit in
Y
a school year. If you work less than full time,
your service credit for the year may be less than
one year.
If you earn more than one year of service credit in
a school year by performing extra-pay assignments
for school activities, most of your and your employer’s
contributions from the additional service will go into
your Defined Benefit Supplement account (see
page 10).
Age Factor
Age factor is a percentage based on your age at the
time you retire. The age factor is set at 2 percent at
age 60. It decreases if you retire before age 60 and
increases up to a maximum of 2.4 percent at age 63.
See “Your Retirement Benefit” in the
Member Handbook.
iew the Understanding the Formula video at
V
CalSTRS.com/videos.
Your Retirement Benefit—Your Options
The highest retirement benefit you can receive is the
Member-Only Benefit.
The Member-Only Benefit stops
with your death. You can choose to provide a lifetime
monthly benefit to someone upon your death. If you
choose to do so, your benefit will be reduced based
on your age and your beneficiary’s age at the time
you elect an option, and the option you elect.
V iew the Beneficiary Options video at
CalSTRS.com/videos.
Estimate your projected retirement
benefit using the calculator at
CalSTRS.com/calculators.
8
CalSTRS 2015 • Member Kit
.
Contributions to Your CalSTRS
Retirement
CalSTRS pays retirement benefits using a combination
of investment income and contributions. Under
the 2014 CalSTRS Full Funding Plan, increased
contribution rates will be phased in over several years.
Member Contributions
You now contribute 9.20 percent of your Defined Benefit
creditable earnings to help finance your retirement
benefit. The rate increases to 10.25 percent in
2016–17.
Employer Contributions
For 2015–16, your employer contributes an amount
equal to 10.73 percent of your Defined Benefit
creditable earnings. Employer contributions will
increase every year, up to 19.1 percent in 2020–21.
State Contribution
The State of California contributes a percentage
of the annual earnings of all members, plus an
amount for purchasing power protection, currently
about 7.39 percent.
The rate is gradually rising to
8.828 percent in 2016–17.
Inflation Protection
Your retirement benefit is protected against rising prices
two ways:
•• tarting September 1 after the first anniversary of your
S
retirement date, your benefit increases automatically
each year at 2 percent of your initial benefit.
•• f inflation erodes the purchasing power of your
I
retirement benefit to less than 85 percent of your
initial monthly benefit, you will receive an additional
quarterly payment, subject to the availability of funds
set aside for purchasing power protection.
Health Insurance in Retirement
CalSTRS does not provide health benefits. Your
health benefits depend on your district’s agreement
with your employee bargaining unit. Many retired
educators have to contribute to or pay their own
health insurance costs.
Consider setting aside extra
money now for your future.
You and your employer each pay 1.45 percent
of your wages toward earning coverage under
Medicare, the federal health insurance program for
people age 65 and older.
Securing Your Financial Future
The 2014 CalSTRS Full Funding Plan, enacted in Assembly Bill 1469, sets a course for CalSTRS’ long-term viability.
The plan relies on gradual contribution increases from all parties—members, employers and the state—without
reducing benefits:
•• our member contribution rate will be increasing to 10.25 percent in 2016–17.
Y
•• he employer contribution rate will be gradually increasing to 19.1 percent in 2020–21.
T
•• The state’s contribution rate will be increasing to 8.828 percent, including purchasing power protection,
in 2016–17.
Investment returns from the CalSTRS portfolio provide 58 percent of the funds to pay benefits, with contributions
providing 42 percent. Lower than expected returns largely due to the economic downturns in the last decade
resulted in a funding shortfall, which was too large to rely on healthy returns to make up the ground lost.
With a responsible plan in place, we’re on target to meet our promise of a secure financial future for California’s
educators.
CalSTRS 2015 • Member Kit
9
. Your Defined Benefit Supplement Account—
Additional Money for Retirement
As a Defined Benefit member, you have
a Defined Benefit Supplement account
that provides additional savings for your
retirement.
You cannot earn more than one year of service credit
in a school year. Most of your and your employer’s
contributions from your earnings in excess of one
year, up to the compensation cap, will go into your
Defined Benefit Supplement account. You can build
your account by taking on extra-pay assignments such
as summer school, yearbook adviser, soccer coach or
band director.
Your account balance earns a guaranteed rate of
interest. For 2015–16, the rate is 3.15 percent.
When you retire, you’ll receive your CalSTRS
monthly retirement benefit and your Defined Benefit
Supplement funds.
Find your current balance on your Retirement
Progress Report at myCalSTRS.
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CalSTRS 2015 • Member Kit
Excess Contributions
Starting July 2014, if you make contributions on earnings
in excess of one year of service credit in a school year,
you are eligible for a return of your contributions that
exceed the 8 percent contribution rate on Defined Benefit
Supplement compensation.
Any excess contributions will
be reported on your Retirement Progress Report, available
on myCalSTRS in September. CalSTRS will return any
excess contributions to your employer in October.
Your employer is responsible for returning the excess
contributions to you. Please contact your employer if you
have any questions.
View the Defined Benefit Supplement videos at
CalSTRS.com/videos.
.
Your Retirement Formula: How It Works
Let’s look at Faye:
Faye is a first-grade teacher with 29 years of service credit. She just turned 58 and though not in a hurry to retire,
she’s been thinking more about retirement lately. Her monthly pay is $4,708.
Here are three examples for her retirement benefit calculation, not including any unused sick leave she may have that
will be converted to service credit at retirement. The examples assume her pay stays the same and she doesn’t elect
an option to provide a lifetime benefit to someone upon her death.
If Faye retires with at least 30 years of service credit, a 0.20 percent career factor will be added to her age factor, up
to a maximum age factor of 2.40 percent.
service credit x age factor x final compensation
Example 1
If Faye were to retire today, her monthly retirement benefit would be:
29
x
service credit
1.76%
x
age factor
$4,708
=
$2,403
retirement benefit
final compensation
Example 2
If she continues working until her 60th birthday, she would qualify for the career factor.
Her monthly retirement benefit would be:
31
x
service credit
2.20%
x
age factor
+
career factor
$4,708
=
$3,211
retirement benefit
final compensation
Example 3
If she continued working until her 62nd birthday, she would be eligible for the maximum
combined age factor and career factor of 2.40 percent, giving her a monthly retirement
benefit of:
33
service credit
x
2.40%
age factor
+
career factor
x
$4,708
final compensation
=
$3,729
retirement benefit
Find the “Age Factor Table” and “Career Factor Table” in the Member Handbook at CalSTRS.com/publications.
iew the Understanding the Formula video at CalSTRS.com/videos.
V
CalSTRS 2015 • Member Kit
11
.
Review Your Retirement Progress Report
You’ll find your CalSTRS account and service credit balances on your Retirement Progress Report.
Your new annual report is available online on myCalSTRS in September.
Your report summarizes:
•• The service credit you earned the previous year.
•• Your total accumulated service credit.
•• The name of your one-time death benefit recipient.
•• ccumulated contributions and interest in your Defined Benefit
A
and Defined Benefit Supplement accounts.
•• Information about your disability and survivor benefit coverage.
•• wo estimates of your retirement benefit. These are estimates
T
only and not binding.
If you believe there’s a discrepancy in your report, do not wait to
correct errors. Contact your employer immediately.
Be sure to verify your
paycheck information,
including your deductions,
each pay period.
12
CalSTRS 2015 • Member Kit
. Increase Your Retirement Benefit
You can increase your benefit by increasing one or more of the elements of the retirement benefit formula:
•• Purchase additional service credit, if you’re eligible to do so.
•• Work longer to increase years of service credit and age factor, and to qualify for benefit enhancements.
•• Convert unused sick leave to service credit at retirement.
Purchase Additional Service Credit
The more service credit you have at retirement—earned or
purchased—the greater your retirement benefit:
•• Purchase service credit for eligible service in out-of-state
or foreign public schools, the military, Peace Corps,
or Job Corps; or eligible employer-approved maternity,
paternity or sabbatical leave and leave approved under
the federal Family Medical Leave Act or California Family
Rights Act.
•• edeposit service credit you lost if you left public
R
education, took a refund and then returned to CalSTRS
membership, or went to work in certain other California
public retirement systems.
•• urchase nonmember service, such as part-time or
P
substitute service in the California public school system,
before you were a CalSTRS member or after taking a
refund and before becoming a member again.
“Purchasing Permissive Service Credit” in the
See
Member Handbook. Also see Purchasing Additional
Service Credit at CalSTRS.com/publications.
iew the Purchase Service Credit video at
V
CalSTRS.com/videos.
Work a While Longer
By working longer, you’ll continue to earn service credit,
which will increase your retirement benefit and can be
used to qualify for the one-year final compensation and
career factor benefit enhancements.
The older you are at retirement, the higher your age factor,
up to a maximum age factor of 2.4 percent at age 63. If
you retire with 30 or more years of service credit, you
qualify for the career factor benefit enhancement, which
adds 0.2 percent to your age factor up to a maximum
combined age factor and career factor of 2.4 percent at
age 61 years and 6 months.
Convert Unused Sick Leave to Service
Credit at Retirement
Your unused sick leave will be converted to service
credit when you retire. 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.
If you are employed full time as an educator, sick
leave credit is calculated by dividing the number of
accumulated unused sick leave days by the number
of base service days, excluding holidays, required to
complete the last school year:
Accumulated days of
unused sick
Number of base days
for full-time service
= Service credit
If you work part time, the base service days are
calculated in proportion to the full-time equivalent.
Sick leave credit cannot be used to meet eligibility
requirements for service retirement.
However, up to
two-tenths of one year of unused sick leave may be used
to qualify for:
•• he 25-year threshold for one-year final
T
compensation based on your highest average
compensation earnable for 12 consecutive months.
•• n increased longevity bonus, if you qualified for the
A
longevity bonus by December 31, 2010.
See “Converting Unused Sick Leave to Service Credit”
in the Member Handbook.
Postpone your retirement and you can still make tax-advantaged contributions to your 403(b), 457(b)
or IRA account. You also can take advantage of catch-up contributions.
CalSTRS 2015 • Member Kit
13
. Your Retirement Income Gap
How much money will you have to enjoy the future you want?
Consider increasing the
amount of your 403(b)
or 457(b) contribution.
Every dollar you
set aside from your
paycheck lowers your
current taxable income
by a dollar.
1. My Retirement Goal
My goal is to retire with
% of my working income.
According to financial advisers, you’ll need 80–90 percent of your
monthly income to maintain your standard of living in retirement.
2. Calculate My Gap
%
Service Credit
Age Factor
%
% of Final Compensation
%
% of Final Compensation
My Goal
%
My Gap
3. Bridge My Gap: What if I extend my career?
%
Adjusted Service Credit
Adjusted Age Factor
%
%
Adjusted % of Final
Compensation
My Goal
Adjusted % of Final
Compensation
%
My Adjusted Gap
4.
Bridge My Gap: What if I purchase service credit?
%
Adjusted Service Credit
Age Factor
%
My Goal
Adjusted % of Final
Compensation
%
Adjusted % of Final
Compensation
%
My Adjusted Gap
See “Purchasing Permissive Service Credit” and the “Age Factor” and “Career Factor”
tables in the Member Handbook.
View The Gap video at CalSTRS.com/videos.
14
CalSTRS 2015 • Member Kit
. Get the Facts on Social Security
As a California public school educator, you do not contribute to Social Security, so you will not receive a
Social Security benefit for your CalSTRS-covered employment when you retire.
If you are counting on Social Security through your spouse or other employment, two federal rules—the
Government Pension Offset and the Windfall Elimination Provision—may leave you with a smaller Social
Security benefit or possibly no benefit at all.
Your CalSTRS retirement benefit will not be reduced by these rules.
Government Pension Offset
A
ffects the Social Security benefit you receive as a
spouse or surviving spouse.
•• ay reduce or eliminate your spousal Social
M
Security benefit.
•• ill offset your Social Security benefit by two-thirds
W
of the amount of your CalSTRS retirement benefit.
For More Information
Find details, including calculators, to help you
determine if these federal rules might affect you at
socialsecurity.gov (under the Benefits tab, select
Government Employees).
F
or example: Assume your expected spousal
Social Security benefit is $600 and your CalSTRS
retirement benefit is $1,200. Since two-thirds of
$1,200 is $800, which is more than your $600
Social Security benefit, you would not get a Social
Security benefit.
Windfall Elimination Provision
A
ffects your Social Security benefit that is based
on your earnings from other employment.
•• ay reduce your Social Security benefit but will
M
not eliminate it. The amount of reduction depends
on your years of Social Security earnings and the
amount of your CalSTRS benefit. For 2015, the
maximum reduction is $413 per month with
20 or less years of substantial earnings.
•• he reduction to your Social Security benefit cannot
T
be more than half of your monthly CalSTRS benefit.
•• oes not apply if you have 30 or more years of
D
Social Security substantial earnings.
the Social Security, CalSTRS and You fact sheet
See
at CalSTRS.com/publications.
View the Introduction to Social Security video at
CalSTRS.com/videos.
Norm
Elementary school computer teacher
CalSTRS member for 18 years
CalSTRS 2015 • Member Kit
15
.
Increase Your 403(b) or 457(b) Contribution
When it comes to saving for your retirement, one of the smartest ways is to invest in a 403(b), 457(b)
or IRA tax-advantaged account.
Already saving? Consider increasing your monthly contributions.
It’s Smart
Earn money by saving money. With compounding,
you earn interest on your total balance—your original
contribution plus all interest earned and any additional
contributions.
Tax advantages. When you contribute to your 403(b)
or 457(b) account directly out of your paycheck, you
defer taxes on the money you invest each month. Your
earnings grow tax-deferred, and your monthly taxable
income is lower.
Contribute to a Roth 403(b) account
through your paycheck and you won’t get a tax break
up front, but your contributions and earnings will be
tax-free at retirement when you withdraw your funds.
More time to take risks. The earlier you start, the
longer you’ll be able to weather financial downturns and
reap the benefits of strong economic times.
It’s Easy
To increase your monthly contribution, simply complete
another Salary Reduction Agreement form, available
from your district’s payroll office, with your new
contribution amount.
Haven’t started a retirement savings account yet?
We’ve made it easy:
1 Open
your account by calling toll free
844-353-2872 or enrolling online from the
Pension2 ebook at Pension2.com.
2 Determine how much you want to invest.
3 ill out your district’s Salary Reduction
F
Agreement. Find the form at your payroll office or
403bCompare.com (select My Employer).
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CalSTRS 2015 • Member Kit
Pension2 Has Low Fees—
Something Everyone Likes
Check out
CalSTRS Pension2
403(b) and 457(b)
plans with low fees
and expenses.
Most investment plans charge fees and
expenses.
Even 1 percent can make a big difference
in your bottom line over time. Compare fees charged
by 403(b) plans in California at 403bCompare.com.
Roll Over Your Investments to
Pension2 at Retirement
With retirement in sight, you may be thinking about
what to do with the money in your Defined Benefit
Supplement or Cash Balance Benefit account.
Consider a rollover to Pension2.
Compare Us
Have money in a 403(b) or 457(b) account
administered by another company? You may be able
to roll over your money to Pension2. Let us show you
how you can save money.
To get started, give us a call at 888-426-2684.
.
CalSTRS Pension2 Complements
Your Retirement Benefit
Pension2, the CalSTRS voluntary supplemental savings plan,
offers low cost, flexible 403(b), 457(b) and Roth 403(b) plans.
Need more for your future?
CalSTRS Pension2—Designed With Your Interests in Mind
â—
â—
Pension2.com
Learn more about
Pension2 plans
and low fees.
Simple, low-cost and transparent fee structure
Investment options that match all levels of investment ability and not found in
other plans:
» Easy Choice Portfolios—15 diversified portfolios designed to take into
account your risk tolerance and retirement date, each is a ready-made
mix of the core investment options.
Call us today at
888-394-2060
to learn more, enroll or
request a booklet.
» Stable value option—a no-market risk investment with a guaranteed
return rate of 3.75 percent for 2015.
» Institutional class mutual funds—feature lower mutual fund expense
ratios than funds purchase directly.
â—
â—
Core investment options—build your own portfolio from a carefully selected list
of more than 20 funds.
Self-Directed Brokerage Account—gives you access to a greatly expanded range
of mutual funds.
â—
No commissions, no surrender charges, no front load or back load fees
â—
Easy payroll deduction of contributions
â—
Powerful planning and educational resources
â—
24/7 account access
Find the Pension2 ebook with online enrollment at Pension2.com.
CalSTRS 2015 • Member Kit
17
. Name Your One-Time Death Benefit Recipient
You’re working hard to earn your CalSTRS benefits. Be sure to name your loved ones or a favorite
organization to receive your one-time death benefit. You also have disability benefits.
Your Survivor Benefits
Monthly Benefit
Your spouse, children and other loved ones may be
eligible for survivor benefits after your death. The type
and amount of benefits depend on:
If you die before retirement, your survivors, including your
spouse or registered domestic partner and dependent
children, may be eligible for a monthly survivor benefit.
•• Your years of service credit.
You may choose to provide a lifetime monthly benefit,
also known as an option, to your beneficiary instead of
a monthly survivor benefit:
•• Your type of coverage: A or B.
•• Your membership status.
•• Whether you elect an option.
Depending on your coverage and member status at the
time of your death, your beneficiaries may be eligible for
three types of benefits:
•• One-time death benefit.
•• Monthly benefit.
•• Defined Benefit Supplement distribution.
One-Time Death Benefit
After your death, your one-time death benefit recipient will
receive a one-time death benefit if eligibility requirements
are met.
The amount of this benefit depends on whether
you die before or after retirement. You may name a living
person, estate, trust or charity as your recipient.
•• When you are eligible to retire.
•• Under Coverage B disability retirement.
•• When you retire.
S
ee “Protecting Your Loved Ones Before You Retire”
in the Member Handbook.
Defined Benefit Supplement Distribution
Your membership status when you die determines how
the balance in your Defined Benefit Supplement account
will be distributed.
If you die before retirement, your Defined Benefit
Supplement account balance will be distributed to your
one-time death benefit recipient. If you did not name a
recipient, CalSTRS will pay the balance to your estate.
You can change your death benefit recipient any time,
with no financial penalty.
Name your one-time death benefit recipient
using myCalSTRS.
Then be sure to keep your
recipient information current.
18
CalSTRS 2015 • Member Kit
. If you die after retirement, your account balance will be
distributed to your one-time death benefit recipient or
option beneficiary, depending on the distribution you
elected at retirement.
S
ee “Survivor Benefits” in the Member Handbook
and the Survivor Benefits brochure at
CalSTRS.com/publications.
iew the Survivor Benefits video at
V
CalSTRS.com/videos.
Your Disability Benefits
You may be eligible for disability benefits if you have a
medically determined physical or mental impairment that
is permanent or expected to last at least 12 consecutive
months and:
In general, the basic disability benefit is 50 percent of
your final compensation. The maximum benefit, including
benefits for eligible dependent children, is 90 percent of
your final compensation.
So that you have income while your application for
disability benefits is pending, you can apply for service
retirement during evaluation of your application, if you’re
eligible to service retire, or you may apply while:
•• ou are still working.
Y
•• You are receiving sick leave or differential pay.
Unlike workers’ compensation benefits, your disability
benefit does not require your disability to be work-related.
“Disability Benefits” in the Member Handbook
See
and the brochure, Introduction to CalSTRS Disability
Benefits, at CalSTRS.com/publications.
•• revents you from performing your usual duties with
P
or without reasonable accommodation, or
•• revents you from performing duties in a comparable
P
level position.
CalSTRS 2015 • Member Kit
19
. Attend a Benefits Planning Session
Take advantage of our retirement planning resources. In addition, CalSTRS representatives are
available by phone or email to answer your questions.
Workshops—Find descriptions of workshops at CalSTRS.com/workshops.
Member benefit videos—View our videos, including ones on beneficiary options, the Defined Benefit Supplement
Program and Social Security, at CalSTRS.com/videos.
Benefit calculators: Estimate your retirement benefit or the cost to purchase service credit using the calculators at
CalSTRS.com/calculators.
Benefits planning sessions: Meet with a CalSTRS benefits specialist to understand how different decisions will
affect your benefit. It’s easier to schedule a session during the nonpeak months of August–March.
Connections newsletter: Keep up to date by reading Connections, published twice a year. Sign up on myCalSTRS to
receive your newsletter electronically to help us conserve natural resources and reduce costs.
CalSTRS.com/workshops
CalSTRS.com/planning
CalSTRS.com/videos
20
CalSTRS 2015 • Member Kit
.
Get Ready to Retire
Now’s the time to start planning for your retirement, if you haven’t already started. Attend a CalSTRS benefits
planning session to help you with your retirement decisions. Then when you're ready, complete and submit your
Service Retirement Application online using your myCalSTRS account.
Your Retirement Benefit Decisions
Disadvantages include:
You're guaranteed a lifetime monthly benefit when you
retire. You can also provide a lifetime monthly benefit to
someone after your death.
•• f you cancel or change your option before retiring, a
I
lifetime assessment will be applied to your retirement
benefit.
The assessment may reduce your retirement
benefit for life.
Member-Only Benefit
•• f your option beneficiary dies before you retire, the
I
election will be canceled automatically. Your retirement
benefit will be subject to an assessment that may
reduce your benefit for life.
The Member-Only Benefit provides the highest monthly
benefit. It does not provide a monthly lifetime benefit for
someone after your death.
Modified Benefit
You can choose to distribute your retirement benefit
over your life and the life of one or more people.
You will
receive a reduced monthly lifetime benefit based on the
option you choose, your age and your beneficiary’s age
at election. When you die, your option beneficiary will
receive a lifetime monthly benefit.
Your option choices include providing your beneficiary
with 100 percent, 75 percent or 50 percent of your
modified retirement benefit.
To find out how each option would affect your retirement
benefit, use the Retirement Benefits Calculator at
CalSTRS.com/calculators.
Electing an Option Beneficiary
Before Retirement
You can elect an option beneficiary when you are eligible
but not yet ready to retire.
Advantages of electing an option before retirement
include:
•• f you die before you retire, your option beneficiary
I
will receive a monthly lifetime benefit. If you did not
pre-elect an option beneficiary and you die before
retirement, your beneficiary may receive a smaller or
no lifetime benefit.
•• n most cases, the Modified Benefit you’ll receive in
I
retirement will be higher if you pre-elect an option
than if you elect an option at the time of retirement.
“Protecting Your Loved Ones Before You Retire”
See
and “Protecting Your Survivors With a Lifetime Benefit”
in the Member Handbook.
the Beneficiary Options video at
View
CalSTRS.com/videos.
Your Defined Benefit
Supplement Account
When you retire, you will also receive the funds in your
Defined Benefit Supplement account.
Your most recent
Retirement Progress Report shows the total amount in
your account at the end of the last school year.
Things to Consider
The amount in your Defined Benefit Supplement account
determines how you can receive your funds at retirement:
•• f you have less than $3,500 in your account, you will
I
receive your account balance as a lump-sum payment.
You may receive your funds directly or roll them into a
qualified retirement plan, such as CalSTRS Pension2.
•• f you have $3,500 or more in your account, your
I
choices depend on whether you elect a Member-Only
Benefit or a Modified Benefit. The choices include a
lump-sum payment, annuity payments or both.
“Your Retirement Benefit, Defined Benefit
See
Supplement Program” in the Member Handbook.
📹 iew the three-part Defined Benefit Supplement series
V
at CalSTRS.com/videos.
CalSTRS 2015 • Member Kit
21
. Your Timeline
This timeline of events from the year before you retire up to your first benefit payment will give you an idea of
what to do and when. Prepare for retirement early to avoid delays during the peak months of April–July.
Steps
01
Any time:
•• Activate your myCalSTRS account, if you haven’t already.
•• ttend a CalSTRS workshop.
A
02
10–12 months before your retirement date:
•• Read the Your Retirement Guide booklet, which you can find online at CalSTRS.com.
•• ake your retirement benefit decisions. For example, do you want someone to
M
receive your retirement benefit after your death?
•• heck to see if pending or new legislation may affect your benefit or influence the
C
timing of your retirement.
03
Six months before you plan to retire:
•• omplete and submit your Service Retirement Application and other forms online
C
using myCalSTRS.
•• r complete the paper forms, available at CalSTRS.com/forms.
O
•• ubmit your application no earlier than six months before your requested
S
retirement date.
04
After you submit your application:
•• heck the status of your application on myCalSTRS, if you submitted it online.
C
•• eview your award letter, which includes the amount of your retirement benefit.
R
•• ook for your initial retirement benefit, which you should receive within 45 days of
L
your retirement date, or the date your application was processed, whichever is later.
22
CalSTRS 2015 • Member Kit
. Ease Into Retirement Under the
Reduced Workload Program
If You Contributed to Another Public
Retirement System
If you are not ready to retire but want to cut back on
the number of hours you work, consider the Reduced
Workload Program (also known as the Willie Brown Act).
It allows you to work less than full time but continue to
earn service credit as if you were working full time. You
continue to pay your CalSTRS member contributions
based on your full-time salary and your employer
continues to pay its CalSTRS contributions based on
your full-time salary.
If you are also a member of another public retirement
system in California, you will need to file for retirement
separately with each system.
To participate, you must be at least age 55, have at
least 10 years of service credit, and be employed full
time for the last five years. Talk to your employer to
find out whether the program is offered. Availability and
participation are at your employer’s discretion.
When calculating your retirement benefit, CalSTRS may
be able to use the salaries for service performed under
the other retirement system if you didn’t work for both
systems at the same time.
If you worked under both
retirement systems during the same pay period, however,
we are required by law to use your CalSTRS salary. If you
perform service under either system between the two
retirement dates, we must use your CalSTRS salary.
the Concurrent Retirement fact sheet at
See
CalSTRS.com/publications.
S
ee “Reduced Workload Program” in the
Member Handbook.
Not sure how much you’ll need?
Try living on your estimated retirement
income for a few months while you're
still working.
Mary
Third-grade teacher
Recently retired
CalSTRS member for 18 years
CalSTRS 2015 • Member Kit
23
. Working After Retirement
Your Responsibility
As you plan for retirement, consider how you will spend
your days as well as how much money you will need.
If you think you may return to work, here’s what you need
to know:
•• ou can work in any job outside of the California public
Y
school system with no restrictions on your earnings.
This includes working for private schools, state
colleges and universities, and the private sector.
•• nder the separation-from-service requirement, also
U
known as the zero-dollar earnings limit, your CalSTRS
retirement benefit will be reduced by the amount you
earn in a CalSTRS-covered position (including one for
a third-party employer on behalf of a California public
school) during the first 180 calendar days following
your most recent retirement date, up to your benefit
amount payable during that period.
If you return to work in the California public school
system, you will need to keep track of your gross
earnings (your income before any taxes are deducted) so
that you do not exceed the earnings limit. CalSTRS will
also monitor your earnings, but it usually takes three to
four months to receive, review and post your earnings to
your account.
If you earn more than the limit, your monthly retirement
benefits will be reduced by the excess amount, up to
the amount of your total annual benefit. For example,
if you earn $3,000 above the limit in a fiscal year
(July 1 to June 30), we will reduce your retirement
benefits by $3,000.
“Working After Retirement” and “Reinstatement
See
to Active Member Status” in the Member Handbook.
•• f you work in a CalSTRS-covered position,
I
including one for a third-party employer on behalf
of a California public school, there’s a limit to the
amount of money you can earn without affecting
your retirement benefit. For fiscal year 2015–16, the
postretirement earnings limit is $40,321.
•• f you retired under the Retirement Incentive
I
Program, you will lose the ongoing increase in your
benefit from the incentive if you return to work within
five years of retirement in any job with the employer
that granted the incentive.
Raymond
Junior high math teacher
CalSTRS member for 14 years
24
CalSTRS 2015 • Member Kit
.
my retirement
Ready to Retire?
Complete and submit your Service Retirement
Application online using your myCalSTRS account. Or,
if you have a complex application, complete it online,
then print and mail or fax it to us.
When you complete your application online using
myCalSTRS:
Need help completing
your application?
Read the Your Retirement Guide, available at
CalSTRS.com/publications, attend a Service
Retirement Application roundtable, or give us a
call at 800-228-5453.
•• Step-by-step guidance means you complete your
application correctly.
•• Your member-specific information is auto-filled,
saving you time.
•• Your application is processed automatically, for a
faster turnaround.
•• You’ll receive immediate email confirmation when
CalSTRS receives your application and after it has
been processed.
•• You’ll receive prompt emails if we need additional
information to process your application.
CalSTRS 2015 • Member Kit
25
. Keep Your Address Current
Be sure CalSTRS has your current mailing and email
addresses, so you don’t miss out on important
communications from us.
Moved or planning a move soon?
Two ways to update your contact information
myCalSTRS makes it easy. From the home page, select
Update Your Profile, then follow the instructions. Not yet
registered for myCalSTRS? Complete the one-time, fivestep registration process today to activate your account.
myCalSTRS.com
Complete the Address Change Request form, sign and
mail it to us.
26
CalSTRS 2015 • Member Kit
CalSTRS.com/forms
. CalSTRS Resources
WEB
CALL
WRITE
VISIT
FAX
CalSTRS.com
Click Contact Us to email
800-228-5453
7 a.m. to 6 p.m.
Monday through Friday
CalSTRS
P.O. Box 15275
Sacramento, CA
95851-0275
Member Services
100 Waterfront Place
West Sacramento, CA 95605
916-414-5040
myCalSTRS.com
403bCompare.com
Pension2.com
STAY CONNECTED
916-414-1099
Calls from outside the U.S.
888-394-2060
CalSTRS Pension2®
Personal Wealth Plan
Find your nearest
CalSTRS office at
CalSTRS.com/localoffices
855-844-2468 (toll free)
Pension Abuse Reporting Hotline
California State Teachers’ Retirement System
com 1768 (rev 7/15)
Printed on recycled paper
.