The California State Teachers’ Retirement System covers public school teachers, community college instructors and school administrators. Your benefit structure depends on when you were first hired into a CalSTRS-covered job, and that structure sets the age factor that does most of the work in the formula.
Two benefit structures
If you were first hired before January 1, 2013, you are in CalSTRS 2% at 60. If you were first hired on or after that date, you are in CalSTRS 2% at 62, created by the Public Employees’ Pension Reform Act (PEPRA). The name tells you the age at which the age factor reaches 2%.
The formula
Your yearly benefit is your age factor times your years of service credit times your final compensation. A 2% at 62 member who retires at 62 with 30 years and $90,000 final compensation gets 2% × 30 × $90,000 = $54,000 a year, or $4,500 a month. Waiting until 65 lifts the age factor to 2.4%, and the same career pays $64,800 a year.
Age factor table
| Age at retirement | 2% at 60 | 2% at 62 |
|---|---|---|
| 55 | 1.40% | 1.16% |
| 56 | 1.52% | 1.28% |
| 57 | 1.64% | 1.40% |
| 58 | 1.76% | 1.52% |
| 59 | 1.88% | 1.64% |
| 60 | 2.00% | 1.76% |
| 61 | 2.13% | 1.88% |
| 62 | 2.27% | 2.00% |
| 63 | 2.40% | 2.13% |
| 64 | 2.40% | 2.27% |
| 65 and up | 2.40% | 2.40% |
CalSTRS publishes the factors in quarter-year steps, so retiring a few months after a birthday gives a factor between the rows. Members under 2% at 60 with at least 30 years of service also get a career factor that adds 0.2% to the age factor, up to the 2.4% maximum. A 2% at 60 member retiring at 60 with 30 years therefore gets 2.2% per year instead of 2.0%.
Final compensation
For 2% at 60 members, final compensation is the highest average annual pay over 36 consecutive months, or over 12 months if you have 25 or more years of service. For 2% at 62 members it is always the highest 36 consecutive months, and creditable pay is capped each year under PEPRA. Extra pay for summer school or extra duties is generally credited to the Defined Benefit Supplement program instead of the main formula.
When to retire
Because the age factor rises so quickly, each year of waiting in your late fifties and early sixties adds more than a year of service alone would. For a 2% at 62 member with 30 years, moving retirement from 60 to 62 raises the factor from 1.76% to 2.00%, a 14% bigger check for life, before counting the two extra years of service. The pension estimate calculator charts this for your numbers.
COLA and purchasing power
CalSTRS adds a 2% increase each September, figured on your original benefit and starting the September after the first anniversary of your retirement. It is a simple increase rather than compounding. CalSTRS also runs a Supplemental Benefit Maintenance Account that tops up benefits if inflation erodes them below 85% of their original buying power.
Social Security
CalSTRS jobs do not pay into Social Security. Since the Social Security Fairness Act took effect, though, any Social Security you earned elsewhere is paid in full with no WEP reduction, and spousal or survivor benefits are no longer cut by GPO. The pension and Social Security calculator adds both together.