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Age Factor
A percentage determined by your age on the last day of the month in which your retirement becomes
effective. It equals 2% at age 60 and is reduced by 0.01 (one one-hundredth) of 1% for each month or
fraction of a month in which the member is under 60 but at least 55.
For members seeking early
retirement who are age 50, but under age 55, the factor is further reduced by 0.25 (one quarter) of 1%
for each month or partial month under age 55.
For members over age 60, the factor is increased
by 0.033 for every quarter year of age to a maximum of 2.4% at age 63 and over.
Allowance
A monthly benefit payable to a retired member, disabled member or beneficiary.
Annual Benefit Adjustment
Automatic, annual increases to the monthly benefit, starting September 1 after the first
anniversary of the effective date of the benefit. Calculated at 2% of the initial benefit.
Annuity
A monthly payment made to members, participants or beneficiaries in the Defined Benefit Supplement
Program or the Cash Balance Benefit Program.
Member-Only Defined Benefit Supplement or Participant-Only Cash Balance Annuity (Formerly Known As Single-Life Annuity with Cash Feature):
A lifetime monthly payment. Any balance remaining upon your death will be paid to your
one-time death benefit recipient or recipients.
100% Beneficiary Annuity (Formerly Known As 100% Joint and Survivor Annuity):
Provides a monthly payment for your lifetime and the lifetime of your annuity beneficiary.
100% of your monthly annuity would be paid to your option beneficiary upon your death.
75% Beneficiary Annuity:
Provides a monthly payment for your lifetime and the lifetime of your annuity beneficiary.
75% of your monthly annuity would be paid to your option beneficiary upon your death.
50% Beneficiary Annuity (Formerly Known As 50% Joint and Survivor Annuity):
Provides a monthly payment for your lifetime and the lifetime of your annuity beneficiary.
50% of your monthly annuity would be paid to your option beneficiary upon your death.
Period-Certain Annuity:
A monthly payment made for any number of years from three to 10. The amount you receive is
based on the number of years over which the annuity is paid; the lower the number of years,
the higher the annuity. If you die before the annuity period ends, the remaining payments
are paid to your one-time death benefit recipient or recipients.
Beneficiary
Any person or entity receiving or entitled to receive payments because of the death of a member. Only
a person (not an estate, trust or corporation) may be designated to receive an option benefit upon the
death of a member.
Benefit
A monthly amount payable to a retired member, disabled member or beneficiary.
Benefit Formula (Service Retirement)
For the Member-Only Benefit, multiply service credit by the age factor then by final compensation.
CalPERS
California Public Employees’ Retirement System.
CalSTRS
California State Teachers’ Retirement System
CalSTRS Home Loan Program
A program for active or retired members to apply for conventional, fixed-rate, first mortgage loans
for primary residences.
Career Factor
For members who retire on or after January 1, 1999 with at least 30 years of earned service credit,
a bonus of 0.2% (two-tenths of 1%) is added to the age factor up to a maximum age
factor of 2.4%, which is reached at age 61 and six months.
Cash Balance Benefit Program
Alternative CalSTRS retirement plan for educators hired to work part time. Cash Balance Benefit
Program is an alternative to Social Security, private plans or the CalSTRS Defined Benefit
Program.
Certified Copy
The document issued by the Bureau of Vital Statistics or County Recorder to record a birth,
marriage or death.
Class of Employees
A number of employees considered as a group because they are employed to perform similar duties,
are employed in the same type of program or share other similarities related to the nature of the
work being performed. For example, a "class of employees" could be guidance counselors
in a high school district.
Client ID
A randomly generated identification number assigned by CalSTRS to protect members' identity and
privacy. The number is available on any correspondence from CalSTRS and on your annual Retirement
Progress Report. It may be used to communicate with us about your account.
Concurrent Retirement
Retiring at the same time from CalSTRS and from certain other California public retirement systems
(Legislator’s Retirement System, Public Employees’ Retirement System, San Francisco
City and County Retirement System, University of California Retirement System or those systems
established under the County Employees’ Retirement Law of 1937). CalSTRS may use the salaries
for service performed under the other retirement system to calculate the CalSTRS retirement
benefit.
County Employees’ Retirement Law of 1937
The 1937 law includes retirement systems from the following counties:
Coverage A
The Disability Allowance and Family Allowance programs that existed prior
to October 16, 1992. Coverage A is mandatory for all members of the DB Program who were receiving
a disability or a service retirement benefit with a benefit effective date prior to
October 16, 1992.
Members who were not receiving a benefit prior to October 16, 1992 were permitted
to retain this coverage or elect coverage B.
Coverage B
The Disability Retirement and Survivor Benefits programs that became effective
on October 16, 1992. Coverage B is mandatory for all new members.
Active members who were hired prior to October 16, 1992 may have elected this
coverage.
Creditable Compensation
Salary and other remuneration payable in cash by an employer to a member for creditable service.
Creditable Service
Specific employment activities such as teaching, vocational or guidance counseling, services
related to school curriculum and a variety of administrative duties performed for an employer
in a position requiring a credential, certificate or permit, or under minimum standards adopted
by the Board of Governors of the California Community Colleges.
Credited Interest
At the end of each fiscal year, interest is credited to the accumulated contributions and
interest in each active and inactive member’s account at the interest rate
adopted by the Teachers’ Retirement Board. It is currently set at a rate that approximates
the yield on two-year Treasury notes.
Credited Service
Service credit for which required contributions have been paid.
Defined Benefit Program
A benefit program within the State Teachers' Retirement Plan that provides retirement benefits based on a formula using age, service credit and final compensation, as well as ancillary benefits, for California's public school educators who are members of the program.
Defined Benefit Supplement Program
A supplemental benefit program with benefits based on contributions and interest credited to
individual member's accounts. Funds will come January 1, 2001, through 2010, from 25% of
each member's monthly CalSTRS contribution and starting July 1, 2002, from compensation earned
from service in one school year in excess of one year of service credit.
Defined Contribution
A retirement benefit in which the benefit is based on the contributions plus interest earnings
and is not guaranteed for life.
Disability Allowance (Coverage A)
A feature of the Defined Benefit Program selected by and offered to individuals who became members on or before October 15, 1992,
that provides income replacement for disabled members.
The benefit is paid as long as the individual is disabled or until the age of 60 when the member becomes eligible for service
retirement.
Disability Retirement (Coverage B)
A feature of the Defined Benefit Program for individuals who became members after October 15, 1992, or elected this feature
during the special election held October 1992 to April 1993.
Those receiving payments under Coverage B are "retired" and will be paid as long as they
are disabled, without respect to age.
Disability or Disabled
A medically determinable physical or mental impairment that is permanent or that can be expected
to last continuously for at least 12 months. The disability must prevent a member from performing
the member’s usual duties with reasonable modifications or the duties of a comparable level
for which the member is qualified or can become qualified by education, training or experience.
A member may apply for disability while still employed. Any impairment from a willful self-inflicted
injury shall not constitute a disability.
Disabled Member
A member to whom a disability benefit is payable.
Early Retirement Limited Term Reduction Program (Alternative C)
A member must be at least age 55, but under age 60,and have at least five years of credited service,
for retirement under this benefit. The member receives one-half the monthly benefit amount calculated
as if the member were age 60. The reduced benefit will continue for the same number of months after
age 60 that benefits were received before age 60. After that, the normal service retirement benefit
will be paid.
Earnings Limit
The amount a disabled or retired member may earn in a month without a reduction in the CalSTRS benefit.
Eligible Dependent Child
Under Coverage A: A member's unmarried (or unregistered domestic partner) offspring, adopted child or
stepchild under 22 years of age who is financially dependent on the member on the effective date of the
disability benefit or the date of the member's death.
Under Coverage B: A member's child, adopted child or stepchild, under 21 years of age, if financially dependent
on the member on the effective date of disability retirement or the date of the member's death.
Employer Pick-Up
Under Internal Revenue Code Section 414(h)(2),a member’s contributions may be "picked-up
" by the employer for the sole purpose of deferring income taxes on that portion of the
member’s compensation.
Family Allowance (Coverage A)
An amount paid to the surviving spouse or partner with eligible children after the member’s death.
The maximum amount is 90% of the member’s final compensation:
- 40% to member's spouse
- 10% for each eligible child, with a maximum of five children
Final Compensation
The highest average annual compensation earnable by a member during a specified period of CalSTRS-covered paid employment.
The period of one year if the member has at least 25 years of credited service or if it is included in a written collective bargaining agreement.
The period is 3 consecutive years for members with fewer than 25 years of service credit.
Full-Time
The number of days or hours of creditable service the employer requires a class of employees to
perform in a school year under a collective bargaining or employment agreement.
Indexed Final Compensation Factors
Factors developed annually based on the change in the members’ statewide average earnable
salary. These factors are used to calculate indexed final compensation.
Indexed Final Compensation
The final compensation used to determine a member's disability benefits, multiplied by the Indexed Final Compensation factor, based on the year of the member's initial benefit.
Longevity Bonus
An increase to the monthly Member-Only retirement benefit of those who accumulate at least 30
years of service credit before January 1, 2011, regardless of when they retire.
Lump-Sum Death Payment
A one-time payment made to the designated beneficiary(ies) upon the death of the member.
Member
Any person who has performed creditable service in the Defined Benefit Program for an employer and has earned compensation
for that service and has not received a refund for that service, unless specifically excluded
by law.
Active Member: A member who is not retired or disabled and earns creditable
compensation during the school year.
Inactive Member: A member who is not retired or disabled and has not earned creditable compensation during the school year.
Disabled Member: A member to whom a disability
benefit is payable.
Retired Member: A member who has terminated
employment and has retired from (for) service or has retired for disability and to whom
a retirement benefit is payable.
Vested Member: A member who has accrued five years
of credited service to be eligible for service retirement, disability retirement, or disability
benefit.
Member-Only Benefit:
The highest monthly benefit payable to a member retired from (for) service or disability prior
to any reduction for election of an option.
Nonconsecutive Final Compensation
The highest average annual compensation earnable during any period of three years of paid employment
covered by CalSTRS. Available for those members who received a salary reduction due to a reduction in
school funds. Upon certification from the employer, CalSTRS will use the highest three nonconsecutive
school years to determine final compensation.
Nonqualified Service Credit
Service not connected to any prior specific employment.
One-Time Death Benefit
A one-time benefit made to the recipient(s) after a member dies.
Option
Plan feature that allows a member to distribute the retirement benefit over the lifetime of the member
and another person or persons.
100% Beneficiary Option:
Upon the member's death, the same reduced benefit will continue to be paid to the
option beneficiary for life. If the option beneficiary predeceases the retired member,
the retired member's benefit will be raised to the Member-Only Benefit level.
75% Beneficiary Option:
Upon the member's death, three-fourths or 75% of the option benefit will
be paid to the option beneficiary for life. If the option beneficiary predeceases the retired
member, the retired member's benefit will be raised to the Member-Only Benefit level.
50% Beneficiary Option:
Upon the member's death, one-half or 50% of the reduced benefit will continue to
be paid to the option beneficiary for life. If the option beneficiary predeceases the member,
the member's benefit will be raised to the Member-Only Benefit level.
Compound Option:
Upon the member's death, benefits will be paid to multiple option beneficiaries for life.
The benefit paid to an individual beneficiary depends on which option was selected for that
beneficiary and what percentage of the total benefit was subject to the option and beneficiary selected.
Option Beneficiary
The person designated by a member to receive a monthly benefit after the member’s death.
Option Factor
An actuarially determined factor used to calculate the amount of monthly benefit when an option is
selected to provide a lifetime monthly benefit to a designated option beneficiary after the
member’s death.
Parent
A natural parent or parent who adopted the member before the member reaches age 18 or marries, whichever occurs earlier.
Participant
A person who has performed creditable service subject to coverage by the Cash Balance Benefit Program
and who has contributions credited under the Cash Balance Benefit Program or is receiving an annuity
under the Cash Balance Benefit Program by reason of creditable service.
Pension2®
An optional savings program that houses 403(b) and 457 plans, which complements CalSTRS Defined
Benefit, Defined Benefit Supplement, and Cash Balance Benefit programs.
Post-Tax Contributions
Member contributions paid into the CalSTRS Defined Benefit Program after federal and state income
taxes have been withheld.
Projected Final Compensation
The final compensation used to determine the disability or family allowance benefit under
Coverage A, increased by 2%, compounded annually, to the earlier of age 60 or the date the
disability benefit is terminated.
Projected Service
Credited service plus the service that would have been earned to age 60 (or termination of the
disability benefit, whichever comes first) had the member continued to work and receive service
credit at the same rate as the highest of any one of the three school years immediately preceding
death or the date the disability benefit began to accrue under Coverage A.
Redeposit
The buying back of service credit represented by previously withdrawn contributions after
terminating CalSTRS-covered employment. Redeposit costs include the interest the refunded amount
would have earned had the funds remained in the CalSTRS account.
Reduced Workload Program
Allows eligible members to reduce their workload from full time to part time (a minimum of 50% of full time) and still receive a full year of service credit. Members may participate in this program for up to 10 years before retirement.
Refund
A member who has terminated employment with the California public school system may withdraw all
member contributions, tax-deferred contributions and interest credited on those contributions.
Registered Domestic Partner (Partner)
A registered domestic partner has many of the same rights and responsibilities as spouses under
California law - including, but not limited to:
- Laws concerning:
- Community property
- Child custody
- Child support
- Access to family court for the dissolution of a partnership.
To register a domestic partnership with the California Secretary of State's office, you and your partner must be
of the same sex or, if you and your partner are opposite sexes, one of you must be at least 62 years
old.
Reinstatement
Returning to employment in a position requiring CalSTRS membership, such as a retired educator
returning to the classroom in a credentialed position and terminating of a CalSTRS benefit.
Retirement Benefit
The amount a member will receive each month after retirement.
Retirement Benefit Calculation
The formula used to calculate the amount CalSTRS members will receive each month after retiring for
service. The formula is: service credit x age factor (2% at age 60) x final compensation.
Retirement Incentive Program
A program that would increase the service used in calculating the CalSTRS service
retirement benefit. This program allows Defined Benefit members who are eligible to retire to receive two years
of service credit.
Retirement Progress Report
Every year, CalSTRS provided a Retirement Progress Report to active and inactive members.
The report includes, as of the previous June 30:
- A summary of Defined Benefit and Defined Benefit Supplement program transactions during the prior year
- Service Credit
- Contribution and interest balances
- Key provisions of the CalSTRS Defined Benefit and Defined Benefit Supplement programs
- Death benefit recipient information
CalSTRS also provides Retirement Progress Report for participants of the Cash Balance Benefit Program.
Return of Member Contributions
A one-time payment of all accumulated member contributions. Payment equals the member’s total
contributions and interest at time of retirement, disability or death, less the sum of all monthly
benefit payments received. This is payable when there are no longer any beneficiaries or survivors
who qualify for a continuing monthly benefit from the program.
Service Credit
Accumulated period of time in years or partial years, for which a person earned compensation subject
to contributions to CalSTRS.
Single-Month Earnings Limit
The amount a disabled member may earn in any month without a reduction in the disability benefit.
The member’s disability benefit and employment earnings in a single month are added together
and compared to the indexed final compensation for the month. Amounts in excess of the limit must
be collected by CalSTRS.
Six-Month Earnings Limit
The member’s average earnings and disability benefit over any continuous six-month period are
compared to two-thirds of the indexed final compensation. If the member exceeds this limit, the
disability benefit can be terminated.
Source Tax
Law where some states had the legal right to tax retirement payments regardless of where the benefit
recipient lived. Recent federal legislation repealed the right of individual states to tax retirement
payments of recipients who are not residents of the state from which they are receiving benefits.
Standard Early Retirement (Alternative A)
At least 55 years old but under age 60 and a minimum of five years of service credit.
Subrogation
A process that permits CalSTRS to participate in an action to recoup benefits paid, expenses and legal costs when
a third party causes the injury or death of a CalSTRS member before retirement and the member or
family pursues civil litigation.
Supplemental Benefit Maintenance Account
The account from which payments are made to members and beneficiaries whose current benefit is worth
less than 85% of the original benefit when adjusted for increases in the California Consumer
Price Index.
Surviving Spouse or Registered Domestic Partner
A person who was one of the following:
- Married to the member or the registered domestic partner of a member for at least 12 months prior to the member's death.
- Married or a partner to a member fewer than 12 months if either:
- A child was born during the marriage or partnership
- The surviving spouse or partner is pregnant with the member's child
- Continuously married or registered to a member for fewer than 12 months prior to either:
- The accidental death of a member
- The occurrence of the injury or diagnosis of the illness that resulted in the member's death
30 and Out (Alternative B)
At least 50 years old but under age 55 with a minimum of 30 years of credited service.
Unmodified Benefit
See Member-Only Benefit
Vested Member
A member of the CalSTRS Defined Benefit Program with five years of credited service.
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