Calstrs Life Insurance: What You Need To Know

CalSTRS provides retirement, disability, and survivor benefits for full-time and part-time California public school educators. While it does not offer health or dental insurance coverage, CalSTRS does provide survivor benefits in the form of a one-time death benefit and monthly survivor benefits under Coverage A and Coverage B. These benefits are available to survivors whether the member's death occurs before or after retirement. So, while CalSTRS doesn't explicitly offer life insurance, it does provide financial protections for survivors in the event of a member's death.

CalSTRS retirement, disability and survivor benefits

CalSTRS (California State Teachers' Retirement System) offers a defined benefit pension plan with retirement, disability, and survivor benefits. Here is a detailed overview of these benefits:

Retirement Benefits

Members with at least five years of service credit are eligible for a guaranteed lifetime retirement benefit. The benefit amount is calculated using the formula: Service Credit x Age Factor x Final Compensation = Retirement Benefit. The age factor is based on the member's age and date of first hire for CalSTRS creditable activities. Members can retire as early as age 50 with at least 30 years of service credit or at age 55 with a minimum of five years of service credit. CalSTRS also offers benefit enhancements and two benefit structures, depending on the member's hire date.

Disability Benefits

Although not explicitly mentioned, CalSTRS likely provides disability benefits as part of its Defined Benefit Program. This program includes disability earnings limits for Coverage B, suggesting that disability benefits are included in the overall benefits package.

Survivor Benefits

The CalSTRS Defined Benefit Program provides survivor benefits, including a one-time death benefit and monthly survivor benefits. There are two types of coverage: Coverage A (Family Allowance) and Coverage B (Survivor Benefit), depending on the member's membership date and election choices.

Coverage A Survivor Benefits:

If a member dies before retirement and joined CalSTRS before October 16, 1992, without electing Coverage B, their survivors are eligible for a $7,093 one-time death benefit. This benefit is payable to the designated recipient(s) or the member's estate if no recipient is named. Monthly survivor benefits are payable to the surviving spouse, registered domestic partner, or eligible dependent children.

Coverage B Survivor Benefits:

If a member dies before retirement and joined CalSTRS on or after October 16, 1992, or elected Coverage B, their survivors are eligible for a $27,612 one-time death benefit. This benefit is payable to the designated recipient(s) or the member's estate if no recipient is named. Monthly survivor benefits are payable to the surviving spouse, registered domestic partner, or eligible dependent children. The monthly benefit amount is calculated based on the member's final compensation and service credit.

In summary, CalSTRS offers a comprehensive benefits package that includes retirement, disability, and survivor benefits to its members, ensuring financial security for both the members and their families.

CalSTRS does not provide health or dental insurance

Each district has its own policies, and coverage may also be part of your union contract, so your benefits may differ from others in your district. It is recommended that you contact your employer to learn if you will have any health benefits in retirement and consider setting aside extra money now for your future health benefits.

The CalPERS Long-Term Care Program is also available to CalSTRS members and certain family members. This program offers long-term care insurance to help cover the costs of personal and custodial care in the event of an illness or injury.

Survivor benefits under Coverage A

CalSTRS offers survivor benefits under Coverage A, also known as the family allowance. These benefits are payable if you became a member of CalSTRS before October 16, 1992, and did not elect Coverage B between October 1992 and April 1993.

Under Coverage A, if you die before retirement, CalSTRS pays a one-time death benefit of $7,093 to your designated recipient or recipients. This amount is periodically adjusted by the Teachers' Retirement Board. If more than one recipient is named, the payment is divided equally, unless specified otherwise. If no recipient is named, CalSTRS will pay the benefit to your estate.

To be eligible for the Coverage A monthly survivor benefit (family allowance), certain conditions must be met. These include not having asection retirement election of an option in effect, earning at least one year of CalSTRS service credit since reinstatement from service retirement (if applicable), and earning at least one-half year of service credit after a break in service of more than one year (if applicable).

The monthly survivor benefit is payable to your surviving spouse or registered domestic partner with eligible dependent children. If there is no surviving spouse or partner, the benefit is payable to eligible dependent children. If there are no eligible dependent children, the benefit is payable to the surviving spouse or partner. If there are no eligible recipients, any remaining Defined Benefit contributions and interest in your account will be paid to your one-time death benefit recipients or your estate, if no recipient was named.

CalSTRS will reduce the Coverage A survivor benefit by the amount of benefits payable by other public systems, including workers' compensation, Social Security income, federal military disability, employer-paid income protection plans, and other disability programs financed with public funds.

Survivor benefits under Coverage B

CalSTRS offers two types of survivor benefits: Coverage A (family allowance) and Coverage B (survivor benefit). Which coverage you have depends on your membership date and whether you elected Coverage B when given the choice. If you became a member after 15 October 1992, your survivors are protected under Coverage B. If you became a member before that date, your survivors are protected under Coverage A.

Coverage B survivor benefits are payable to your survivors if you became a member of CalSTRS on or after 16 October 1992, or elected Coverage B in the election held between October 1992 and April 1993.

Under Coverage B, CalSTRS pays a one-time death benefit of $27,612 to your designated recipient(s). This amount is adjusted periodically by the Teachers' Retirement Board. If more than one recipient is named, the payment is divided equally, unless you specified other percentages of distribution. If there is no recipient named, CalSTRS will make the payment to your estate.

To qualify for the one-time death benefit, you must have earned at least one year of service credit prior to the date of death, and your death must have occurred during one of the following periods:

• While performing creditable service.
• Within four months after you terminated employment or last earned creditable service.
• Within 12 months of the last day for which creditable compensation is paid, if you were on an approved leave of absence without compensation for reasons other than disability or military service.
• If you worked part-time, your death must have occurred within four months after you ended employment or earned service credit.

In addition to these qualifications, if you had taken a refund of contributions or had reinstated after retirement:

• You must have earned at least one year of service credit after your refund or reinstatement.
• Six months must have elapsed since your reinstatement from disability retirement.

For your survivors to be eligible for a monthly survivor benefit, you must have met the same eligibility requirements as those for the one-time death benefit, and:

• You cannot have a preretirement election of an option in effect.
• You must have earned at least one year of CalSTRS service credit if you reinstated from service retirement.
• You must have earned at least six months of service credit if you had a break in service of more than one year.
• You must have died within four months if you reinstated from a disability retirement.

Under Coverage B, a monthly survivor benefit is payable to your surviving spouse or registered domestic partner, eligible dependent children, or eligible dependent children with no surviving spouse or partner. If you have no surviving spouse, partner, or eligible dependent children, any remaining Defined Benefit contributions and interest in your account will be paid to your one-time death benefit recipients. If no recipient was named, CalSTRS must make the payment to your estate.

The Coverage B monthly survivor benefit will not be reduced if your survivors receive survivor benefits from other public systems, such as Social Security.

CalSTRS Defined Benefit Program

CalSTRS (California State Teachers' Retirement System) offers a Defined Benefit Program, which is a traditional defined benefit plan that provides retirement, survivor, and disability benefits. This program is available to employees of the California public school system, from pre-kindergarten through community college, who hold positions requiring specific credentials, certificates, permits, or minimum standards.

Under the CalSTRS Defined Benefit Program, your retirement benefit is calculated using a formula set by law, factoring in your age, service credit, and final compensation. This formula can be expressed as: Service Credit x Age Factor x Final Compensation = Retirement Benefit. The age factor is the percentage of final compensation you are entitled to for each year of service credit, determined by your hiring date and age at retirement.

The California Public Employees' Pension Reform Act of 2013 brought significant changes to the benefit structure, resulting in two benefit structures for the Defined Benefit Program. Eligibility for retirement depends on your hiring date. If you were hired before January 1, 2013, you are eligible for retirement at age 50 with 30 years of service credit or age 55 with five years of service credit. For those hired on or after January 1, 2013, eligibility is at age 55 with a minimum of five years of service credit.

The Defined Benefit Program also provides survivor benefits, ensuring that your survivors are taken care of whether your death occurs before or after retirement. There are two types of coverage: Coverage A (Family Allowance) and Coverage B (Survivor Benefit). The applicable coverage depends on your membership date and whether you elected Coverage B when given the choice.

It is important to note that CalSTRS does not provide health or dental insurance coverage. These benefits are typically collectively bargained at the local school district level. However, under California Education Code sections 7000-7008, school districts, community colleges, and county offices of education must offer retiring CalSTRS members and their spouses or registered domestic partners the opportunity to continue their medical and dental insurance at their own expense.

Frequently asked questions