California State Teachers Retirement System (CalSTRS)
POINTS
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CalSTRS provides eligible California educators with a guaranteed lifetime pension.
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Your retirement benefit is primarily determined by service credit, retirement age, and final compensation.
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Working longer and delaying retirement can substantially increase your monthly pension.
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CalSTRS benefits are funded through contributions from employees, employers, and the state.
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Members may be eligible for disability, survivor, and death benefits in addition to retirement income.
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CalSTRS benefits are generally taxable at the federal level, but California does not tax them.
For a public school teacher in California, your retirement is likely built around CalSTRS, which is one of the largest pension funds in the country.
Your retirement benefits depend on more than just your age and years of service.
Factors like
- Final compensation
- Retirement timing, and
- Benefit choices all affect your pension.
CalSTRS
P.O. Box 15275
Sacramento, CA 95851-0275
916-414-5040
What CalSTRS Is and Who It Covers
CalSTRS has been around since 1913, and its mission is
- Securing the financial future of California’s educators.
Today, it serves more than 1 million+ members and beneficiaries, from prekindergarten teachers to community college instructors.
If you work in a California public school in a position that requires a teaching credential, you’re generally required to participate.
It Covers
- Teachers
- Administrators
- Counselors, and
- Librarians.
Part-time and substitute educators have a choice each pay period between the main defined benefit plan and a cash balance alternative.
But it does not cover
- Private school employees
- Independent contractors, and
- Non-credentialed staff
Membership and Coverage
CalSTRS isn’t just one plan. It operates as a hybrid system with three main components.
- The Defined Benefit (DB) Program: It’s a traditional pension that pays you a guaranteed monthly income for life.
- The Defined Benefit Supplement (DBS): A cash balance account that builds up on earnings beyond your standard work year.
- Pension2: This is a voluntary 403(b) savings plan, similar to a 401(k), that lets you contribute additional money on top of your pension.
Two Benefit Structures: Which One Are You Under?
Your benefits depend largely on when you were hired.
| Feature | Classic (2% @ 60) | PEPRA (2% @ 62) |
|---|---|---|
| Hire date | ≤ Dec 31, 2012 | ≥ Jan 1, 2013 |
| Retirement age | 50–60 (more flexible) | 55+ minimum |
| Formula | 2% at 60 | 2% at 62 |
| Final compensation | Highest 12 or 36 months | Highest 36 months only |
| Overall benefit level | More generous | Less generous / cost-controlled |
Both tiers use the same basic formula to calculate your benefit, but the age factors, compensation caps, and retirement ages change.
While CalSTRS serves California’s public school educators, CalPERS covers most other public employees, such as state and local government workers.
How Your Benefit Is Calculated
Your monthly pension is based on three things:
- Your years of service credit
- Age factor, and
- Final compensation.
| Plan Type | Age | Benefit Factor (%) |
|---|---|---|
| Classic | 50 | 1.100 |
| Classic | 52 | 1.460 |
| Classic | 55 | 2.000 |
| Classic | 60 | 2.314 |
| Classic | 63 | 2.500 |
| Classic | 67+ | 2.500 |
| PEPRA | 52 | 1.000 |
| PEPRA | 55 | 1.300 |
| PEPRA | 60 | 1.800 |
| PEPRA | 62 | 2.000 |
| PEPRA | 65 | 2.300 |
| PEPRA | 67+ | 2.500 |
In both systems, working longer increases your benefit factor, which means a higher pension.
Early retirement lowers the factor and reduces your monthly income, while delaying retirement increases it up to a maximum cap (around 2.5%).
Service Credit: How It Adds Up
You earn one year of service credit by working the equivalent of a full school year, which CalSTRS defines as at least 150 days in a fiscal year.
Fewer days earn you a proportional fraction. Working 75 days, for example, gives you 0.5 years of credit.
You can also earn credit for
- Summer school
- Extension programs, and
- Other extra assignments paid by a CalSTRS employer.
In some cases, you can purchase credit for certain leave periods or out-of-state teaching.
Unused sick leave can even be converted into service credit when you retire.
What You and Your Employer Contribute
CalSTRS is funded by contributions from members, employers, and the state.
- If you’re a Classic member, you contribute 10.25% of your salary to the DB Program.
- For a PEPRA member, your contribution rate is approximately 10.205%.
Your employer contributes 19.10%, and the state adds a share as well, currently around 8.328% of member payroll to the DB fund, plus 2.5% to the supplemental inflation protection fund.
These rates have increased significantly over the past decade as part of a long-term funding plan to keep the system solvent.
Are There Disability Benefits
If you become disabled before retirement, CalSTRS provides coverage based on when you first joined the system.
| Feature | Coverage A (Legacy) | Coverage B (Post-1992) |
|---|---|---|
| Eligibility | Members joining before Oct 16, 1992 | Members joining on/after Oct 16, 1992 |
| Service requirement | 5 years (1 year if job-related misconduct injury) | 5 years (1 year if job-related misconduct injury) |
| Basic benefit | 50% of final compensation | 50% of final compensation |
| Dependent children add-on | +10% per eligible child (max total 90%) | None |
| Duration | Ends at age 60 (unless eligible children remain) | Continues for life or until recovery from disability |
| Post-60 treatment | Converts to service retirement | Continues as disability retirement |
Survivor and Death Benefits
CalSTRS also provides benefits to your family if you die before or after retirement.
| Stage | Feature | Coverage A (Legacy – Pre Oct 16, 1992) | Coverage B (Post Oct 16, 1992) |
|---|---|---|---|
| Before Retirement |
One-time death benefit | $7,288 (2024) | $29,152 (2024) |
| Spouse monthly benefit | ~40% of final compensation (family allowance model) | ~60% of service retirement benefit | |
| Child benefit | +10% per eligible child | +10% per eligible child (as applicable) | |
| Benefit structure | Family allowance system | Survivor retirement system | |
| Spouse payment option | Lump sum or convert to service retirement at age 60 | Lifetime monthly benefit or refund option | |
| Eligibility condition | Active service with required service credit | Active service + timing rules after separation | |
| After Retirement |
One-time death benefit | $7,288 (2024) | $7,288 (2024) |
| Monthly survivor benefit | Only if retirement option was selected at retirement | Only if retirement option was selected at retirement | |
| Default rule | No ongoing monthly benefit if no election made | No ongoing monthly benefit if no election made | |
| Beneficiary payout | Remaining contributions + interest | Remaining contributions + interest | |
| Continuation of pension | Only if survivor option was chosen | Only if survivor option was chosen | |
| Example | $950/month retiree → $475 + $7,288 payout | Same structure applies |
Retirement Payout Options
When you retire, you choose how your pension is paid out.
| Option | Benefit to Member | Benefit to Beneficiary | Key Features |
|---|---|---|---|
| Member-Only (No Option) | 100% of retirement benefit (highest monthly payout) | 0% (no continuing pension) |
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| 50% Option | ~95% of Member-Only benefit | 50% of member’s pension after death |
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| 75% Option | ~93% of Member-Only benefit | 75% of member’s pension after death |
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| 100% Option | ~90% of Member-Only benefit | 100% of member’s pension after death |
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| Compound Option | Varies based on beneficiary structure | Custom split (must total 100%) |
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- Highest monthly pension
- Ends at death
- No survivor protection
- Actuarially reduced benefit
- Balances income and survivor protection
- Commonly selected option
- Higher survivor protection
- Greater reduction in monthly pension
- Suitable for strong dependent support
- Maximum survivor protection
- Largest reduction in member benefit
- Full income continuity for beneficiary
- Can split among multiple beneficiaries
- Example: spouse + children
- Subject to age/legal restrictions
These payout choices are essentially a balance between higher income now versus financial protection for dependents later.
The decision is typically long-term and irreversible, so it should align with your family’s needs, expected longevity assumptions, and how much weight you place on guaranteed income versus flexibility.
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