CalSTRS Basics Welcome and please sign in

Objectives

• CalSTRS hybrid • Defined Benefit Program • Defined Benefit Supplement • CalSTRS Pension2®

• Protecting your loved ones • Other considerations • Join us online

Who Is CalSTRS?

• Provides retirement-related benefits and services to educators in California public schools and community colleges

• World’s largest educator-only pension fund

• Membership: over 868,000

• Member contributions 8.15 percent for fiscal year 2014-2015 Increasing to 10.25 percent for 2% at 60 members and 9.205

percent for 2% at 62 members by 2016-17

• Employer contributions 8.88 percent for fiscal year 2014-2015 Increasing to 19.1% by 2020-21

• The state of California also contributes Increasing to 6.328% by 2016-17, plus 2.5% for purchasing

power protection

The Teachers’ Retirement Fund

Hybrid Retirement System

• Defined Benefit Program

• Defined Benefit

Supplement Program

• CalSTRS Pension2

Defined Benefit Program

Provides a lifetime benefit based on a formula, not on the dollar amount in your account:

• CalSTRS 2% at 60: hired on or before Dec 31, 2012 • CalSTRS 2% at 62: hired on or after Jan 1, 2013

Defined Benefit Retirement Formula

Service Credit

Age Factor

Final Compensation

Member-Only Benefit

x x =

Service Credit

Your time worked – the number of full and

partial years you paid into CalSTRS

The maximum service credit you

can earn each year is 1.000

Service Credit

Purchasing Service Credit

You may be able to: • Redeposit previously

refunded service credit

• Purchase permissive service

Age Factor

Age Factor

A percentage determined by your age at the time of retirement and your

benefit structure:

•CalSTRS 2% at 60

•CalSTRS 2% at 62

Highest age factor is 2.4 percent

Career Factor* 30 years of service credit increases age factor by

0.2 percent to a maximum of 2.4 percent

55½ 1.460 1.660 58½ 1.820 2.020

61½+ 2.200 2.400

Less than 30 years Age 30 years

or more

* Applies to CalSTRS 2% at 60 members only

Defined Benefit Retirement Percent

Service Credit

Age Factor

Percentage of Average Monthly Income

x =

• A CalSTRS retirement benefit typically covers 50 percent of average monthly income

• Financial experts believe that you will need 80-90 percent to maintain your current standard of living

Calculate Your CalSTRS Percent

• Goal • Service credit • Age factor What is your gap?

CalSTRS Pension2

• Tax-deferred retirement savings

• Not-for-profit

• Objective advice and services

• CalSTRS Easy Choice Portfolios

• 888-394-2060

Final Compensation • CalSTRS 2% at 60

Fewer than 25 years of service credit – 36 consecutive months

25 years or more of service credit – 12 consecutive months

• CalSTRS 2% at 62 Any amount of service credit – 36 consecutive months

Final Compensation

Member-Only Benefit

Service Credit

Age Factor

Final Compensation

Member-Only Benefit

x x =

The highest retirement benefit you can receive

Choosing an Option

• Secure a lifetime benefit for your loved ones Will reduce your retirement benefit

• You may pre-elect an option when you are eligible to retire Advantages Disadvantages

100% Beneficiary Option

75% Beneficiary Option

50% Beneficiary Option

Compound Option

Benefit Options

Option Election Example

Olivia’s Member-Only

Benefit

Option Choice

Olivia’s Modified Benefit

Steve’s Beneficiary

Income (if Olivia dies)

Olivia’s “pop-up” Benefit

(if Steve dies)

$3,427 100% $3,126 $3,126 $3,427

$3,427 75% $3,221 $2,416 $3,427

$3,427 50% $3,293 $1,646 $3,427

Olivia age 59 years 6 months Steve age 63 years 1 month

Option Selection

Member Only

Election Date

Modified Beneficiary Reduction

$3,427 06/30/2014 $3,293 $1,646 $134

Option Election Example

Member Only

Election Date

Modified Beneficiary Reduction

$3,427 01/01/2010 $3,324 $1,662 $103

Retirement Date: 06/30/2014 Option: 50 %

Defined Benefit Supplement Account

• Established in 2001

• Provides extra money in retirement

• Benefit based on Defined Benefit Supplement account balance

Building Your Defined Benefit Supplement Account • A quarter of 8 percent member contributions

went to Defined Benefit Supplement*

• On earnings in excess of one year of service credit 8 percent member contributions 8 percent employer contributions

• Compounded interest (3.55% in 2014 – 2015)

*Ended on December 31, 2010

Survivor Benefits • Who is a “survivor?” Coverage A versus Coverage B

• Choices based on survivor’s eligibility Refund of your account Monthly benefit for life

• One-time death benefit* Active: A = $6,163 B = $24,652 Retired: A & B = 6,163

*Review your beneficiary designation every five years

Disability Benefit • Must be vested 5 years or 1 year if unlawful act

• Disability permanent or expected to last at least 12 consecutive months

• Application and evaluation process

• Up to 5 months for a decision

• Additional benefits for eligible dependents

Other Considerations

• Social Security offsets

• Medicare

• Tax considerations

• Retirement Progress Reports

• Health care benefits – your employer

Join Us Online

New, Improved and Expanded Online Services

CalSTRS.com

• Member information

• Estimate calculators

• Forms and

publications

• Planning resources

my CalSTRS • Secure

messaging

• Annual statements

• Address change

• Beneficiary designation

Plan Funding • New funding plan

• Funding outlook

• Know your benefits

• Ask Jack

• E-newsletters

• Join the

conversation

Educational Videos • Understanding the

Formula • The Gap • Refund – Consider the

Consequences • Defined Benefit

Supplement • Disability benefits • Survivor benefits • Social Security • Pension2

403bCompare.com

• Search for your district

• Compare rates and fees

• Browse glossary

• Educate yourself

Your CalSTRS Resources

Benefits Counseling • Interactive sessions

• Local offices

• Over the phone

Thank You for Attending

Welcome to CalSTRS

Pop. 868,000

CalSTRS Members