What to know about filing for CalSTRS retirement

Planning the road ahead ...

Reitrement GraphicPlanning to retire?  It is important to understand the steps needed for a smooth transition. Essential to beginning this process is a phone call to the STRS Regional Counseling Center to make an appointment for an interview. 

CalSTRS has a member service center in Glendale at 505 N. Brand Blvd., Suite 200, Glendale, CA 91203. 

Call the main CalSTRS number at (800) 228-5453 to set up a counseling session and select Option 3 on the phone menu. You will then be prompted to enter further information. 

You can also log onto the newly re-designed CalSTRS web site at www.calstrs.com.

You may also wish to contact a local office of the Social Security Administration at (800) 772-1213 to determine if you might be eligible for benefits as a result of non-teacher employment for you or your spouse. Make sure that you mention you will be receiving a California State Teachers Retirement pension, as there is still a government pension offset against any Social Security benefits for which you may be eligible.

Benefit enhancements that began in 2000 include a monthly longevity bonus for those who retired after January 1, 2001 and earned 30 or more years of service credit by December 31, 2010. For those with no beneficiary option 30 years of service credit adds an additional $200, 31 years adds $300 and 32 years adds $400 (which is the maximum). For those with a beneficiary option the bonus is reduced based on the option elected. Those participants who do not have 30 years of service by December 31, 2010 will not be eligible for the bonus. The bill that authorized the bonus expired on that date.

For those with 25 or more years of service credit, final compensation (part of the formula used to calculate the retirement allowance) will be based on the single highest period of 12 consecutive months of compensation.  For those with fewer than 25 years of service credit, final compensation will be based on the highest average earnable compensation during any period of 36 consecutive months of paid employment covered by CalSTRS.

With the expansion of creditable compensation in July 2002 members of CalSTRS earn service credit on extra assignments, Participants and the school district pay contributions on compensation from that service.  AB 2700 expanded the definition of what can be counted as creditable compensation and service to include income from: working summer school and intersession, department chair stipends, allowances, and pay-for-performance bonuses.  Service in and compensation from these activities is credited to your Defined Benefit Supplement Account created by AB 1509.

Assuming June 30 resignation and July 1 retirement, here is your checklist:

Contact LAUSD Certificated Placement Unit at (213) 241-5100 to request a retirement packet. This is very important, because the LAUSD packet contains both District resignation and health benefits continuation forms.
Follow the directions in the packet to mail completed forms no earlier than six months prior to retirement and no later than the last day of the month in which your retirement is to become effective. It is best to mail the application by certified mail; that way you know it has been received. CalSTRS forms go to CalSTRS in Sacramento, not to LAUSD.
If you wish direct deposit of your STRS allowance, fill out the form that comes with the packet and include it with your application.
Complete the beneficiary designation (always keep current on this item) with the application.
Obtain necessary documents such as verification of Option Beneficiary’s birth date.
The Express Benefit Report (to get service credit for unused full-pay illness) is sent to LAUSD Payroll Services Branch, STRS Unit, 27th Floor, POB 513307 – Terminal Annex, Los Angeles, CA 90051-1307.  Please be aware that it is the responsibility of LAUSD to send this form on to CalSTRS.

The Defined Benefit Supplement Account became effective January 1, 2001.  To begin with, 1/4 of your monthly CalSTRS contribution was deposited into this account without any change in the eight percent retirement contribution withheld from your paycheck or in your retirement allowance. That 1/4 contribution, which was designed to help build up the account, ceased as of January 1, 2010, but contributions from your expanded creditable compensation and service will continue to be deposited in the supplement account. 

A CalSTRS member may not earn more than one year of service credit in the Defined Benefit Plan even with the new expanded contributions. Contributions from service in excess of one year are credited to the Supplement Account.

The California Public Employees’ Pension Reform Act of 2013 made changes that primarily affect CalSTRS members who were hired on or after January 1, 2013.

A breakdown of the changes is included in the 2013 Member Handbook available on the CalSTRS website.

Site Administrators received a memo from LAUSD Human Resources advising on 2012-13 retirement dates in view of the Early Start Calendar. You are urged to consult that calendar to determine whether you are eligible to retire earlier than July 1. It is essential that teachers work closely with their time reporters to ensure that all 182 work days have been reported in order to earn a full year of service credit.

After submitting completed paperwork, STRS will mail an award letter detailing the monthly estimated allowance, and issue your first allowance check no later than 45 days after retirement, and often sooner. STRS will send you adjustment letter(s) over a period of months if it receives additional information affecting your allowance, such as additional service credit due to accumulated unused full-pay sick leave (see bullet above on Express Benefit Report).

Think twice about mid-year retirement, I do not recommend it. If employees do not serve the entire contract year, they will not have earned their annualized salary and will find that they have been overpaid as a result and owe money back to LAUSD.

For information about continued medical/dental/vision coverage contact LAUSD Benefits Administration at (213) 241-4262. Be aware that certificated employees must meet service requirements for lifetime healthcare benefits through LAUSD. You may wish to read Article XVI, - Health and Welfare, Section 4.0 of the Collective Bargaining Agreement for information on service requirements.  Enrollment in Medicare Part A (hospitalization) and Part B (physician benefit) is mandatory when a retiree or covered spouse reaches age 65. Procedures are outlined in the open enrollment booklet that is issued each fall. I strongly recommend that you keep this booklet whether or not you plan to make enrollment changes. It is an excellent source of information.

Retiring UTLA members are encouraged to join UTLA-Retired to keep abreast of developments in areas of interest to you. Contact the UTLA Membership Department at (213) 637-5142 or (213) 637-5158 to request information and an application.

By Judith Bruner
UTLA Compensation and Benefits Specialist
email: jbruner@utla.net 
Phone: 213-368-6280