calstrs on campus - calstrs basicsresources.calstrs.com/workshop_registration/docs/calstrs...what is...
TRANSCRIPT
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