Pension Sense blog | February 15, 2023 | Thomas Lawrence

Paper or plastic? Rock or jazz? Regular or decaf?

Life is saturated with options: some fun, some...not so much. At CalSTRS, we want to give you as many sound options as possible in saving for retirement and deciding how to structure your financial future.

One choice we offer is purchasing additional service credit, which could lead to an increase in monthly benefit payments for some members.

Your retirement paychecks under the CalSTRS Defined Benefit Program are based on your years of service credit, age at retirement and final compensation. The more service credit you have, the higher your monthly retirement benefit will be.

There are two types of additional service credit available:

Redeposit: You can purchase full or partial service credit if you left CalSTRS-covered employment, took a refund of your contributions and interest, and then returned to a CalSTRS-covered position—or if you are a member of certain other public retirement systems—by redepositing the funds with interest.

Permissive service credit: You may purchase permissive service credit for employer-approved leaves or service not previously credited.

Examples of permissive service include:

• Nonmember service (part-time or substitute service before you were a member).
• Out-of-state teaching.
• Sabbatical leave.
• Maternity or paternity leave.
• Family care and medical leave.
• Other types of permissive service credit, including work in eligible child care centers.

You may purchase a portion, rather than all, of the permissive service you have available. You may not, however, purchase credit for service you:

• Performed during summer school or overload teaching (when community college faculty teach extra courses) prior to July 1, 2002.
• Received, or are eligible to receive, credit for in another California public retirement system.

Use our online calculator to estimate the cost of purchasing permissive service credit.

You can also use the Redeposit or Purchase of Permissive Service Credit form available on myCalSTRS or at CalSTRS.com/forms to request a billing statement to begin your service credit purchase.

Whatever you opt to do in your career and when prepping for retirement, know that we’re here to help figure out what's best for you and your beneficiaries.

For information on how to reach CalSTRS, visit the contact us webpage.