CalSTRS administers a hybrid system as part of a comprehensive financial security package for members that includes:

• Defined Benefit Program - a traditional defined benefit plan
  • Pension based on a formula using age, service and compensation.
  • Member participation is mandatory.

• Defined Benefit Supplement Program - a cash balance plan
  • Acts like a 401(k), but similar to defined benefit plans with a minimum earnings guarantee.
  • Member participation is mandatory.
  • Fact Sheet: The Basics of a Cash Balance Plan (PDF; 837KB)

• Pension2 - a defined contribution plan
  • Voluntary retirement savings through 403(b) and 457(b) plans.
  • Participation is optional.

CalSTRS Facts:

• Largest U.S. teachers' retirement fund
• Membership: 856,360
• Assets: $152.9 billion as of March 31, 2012.

Teachers' Retirement Board

The Teachers’ Retirement Board has exclusive control over the investment and administration of the Teachers’ Retirement Fund.

The board:

• Makes rules, sets policies
• Has the power and authority to hear and determine all facts pertaining to application for benefits under the retirement system
• Is comprised of 12 members
  • Five members appointed by governor, including three public members
  • Four ex-officio members:
    • Superintendent of Public Instruction
    • State Treasurer
    • State Controller
    • Director of Finance
  • Three members elected by CalSTRS membership

Income Sources

CalSTRS income is derived from member contributions, employing school district contributions, investment earnings, and appropriations from the state's General Fund. The cost of administration is paid from the State Teachers’ Retirement Fund.