Contribution Rates

• What are contribution rates?

  Contribution rates make the cost to purchase additional service credit more equitable in relation to the benefit members receive. This system is based upon a member’s age at the time of purchase, which more closely represents the actuarial cost of the permissive service credit.

• Who is affected?

  Contribution rates will affect members who wish to purchase permissive service credit. The table below depicts the types of service credit purchasable and whether they are impacted by contribution rates:

  Service Credit Type	Impacted by Contribution Rates
  California State College or University of California	Yes
  Cash Balance consolidation of benefits	Yes
  Cash Balance Program Equivalent Service Credit	Yes
  Child Care Center Service Credit	Yes
  Deaf and Blind School Service Credit	Yes
  FMLA Service Credit	Yes
  Job Corps Center Service Credit	Yes
  Maternity/Paternity Service Credit	Yes
  Military Service Credit	Yes
  Native American School Service Credit	Yes
  Non Member Service Credit	Yes
  Out-of-State Service Credit	Yes
  Sabbatical Service Credit	Yes
  Service Under Fulbright Act	Yes
  Nonqualified Service Credit	Yes
  Local Service Credit	No
  Non Member Spouse Refund Redeposit	No
  Redeposit of previously withdrawn contributions	No
  Redeposit with Local Service Credit-Converted	No
  Uniform Service Credit under USERRA	No

• What are the new rates?

  For the 2011/2012 fiscal year, the rates are:

  Age Group	Actuarial cost as percent of current pay
  20-29	15.5%
  30-39	17.0%
  40-49	20.3%
  50-59	25.4%
  60-69	29.2%
  70 and above	24.2%

  Rates can go up or down each July 1. The new rates are available each spring by calling CalSTRS at 800-228-5453.

Applying for Additional Service Credit

• When do I have to submit my application in to CalSTRS to honor the current rate?

  Requests must be postmarked no later than June 30.

• What happens if necessary documentation needed by CalSTRS is held up by my former employer?

  Certain required documentation is needed by CalSTRS to correctly approve and calculate the cost of some permissive service.

  It is the member’s responsibility to provide this documentation. If there is a reasonable cause for delay in obtaining this documentation at the time you request a purchase of permissive service credit, we may honor the date of the request as long as you can show proof that you submitted the information to your former employer and they are unable to respond in a timely manner.

  For example, proof may consist of a letter from the other retirement system indicating receipt of your request/certification or copies of all information forwarded to your former employer requesting certain documentation.

  The sooner you provide this type of information to CalSTRS, the better we can service your request.

• How can I see what the new costs will be?

  To estimate the cost for permissive service credit, use the Permissive Service Credit Calculator or manually calculate your cost:

  1. Multiply the number of years you want to purchase by the contribution rate for your age group.
  2. Multiply the result by your highest earnable compensation.
• Please read the Purchase Additional Service Credit brochure for more information.
• The next step to making a purchase is to learn your actual cost. Please download and compete the appropriate form and send to CalSTRS:
  
  
  • Request form for most permissive service credit types.
  • Nonqualified Service Credit Purchase form
  • Out-of-State Service Credit Certification form
  • Verification for University of California Service form
  • Consolidation of Benefits Package to transfer your Cash Balance Benefit Program contributions to the Defined Benefit (DB) Program to purchase DB service credit. Please read Consolidating Program Coverage Frequently Asked Questions (FAQ) for more information.
• Do these rates affect the Consolidation of Benefit for Cash Balance?

  Yes. Download the Consolidation of Benefits form for more information.

Other Questions

• Recalculations Treated as New Requests

  If you decide to buy a different amount of service after a statement for service credit, has already been processed by CalSTRS, return the original statement within 35 days of the date on the statement to receive a new calculation.

  CalSTRS will count this as a new request and add it to the processing queue, which may result in backlog related delays in returning a revised statement to you.

  However, we will honor the rates in effect at the time of the original request. Requests received after the 35 days will be subject to rates in effect as of the new receipt date.

• What if I am retiring this year and don’t receive my statement?

  If you wish to purchase additional service credit, you must have your request to CalSTRS before your retirement date.

  Requests received after your retirement date cannot be accepted.

  Once you receive your statement, you will have 35 days to initiate payment via personal check or rollover. Once full payment is received, the service credit will be added to your retirement calculation and you will receive a retroactive adjustment back to your retirement date.

• If I am currently paying for permissive service credit, will my balance be adjusted with the new rate?

  No. If you are currently paying for permissive service credit, you are locked into the rate factor in effect when you began payments. The new rates only apply to those requests received after July 1.