8/27/2015

posted Sep 21, 2015, 3:10 PM by Yuba City Teachers Association
Hello YCTA,

Warning: Your paycheck in August will include a larger deduction for STRS.  You need to read for details.

What do you have that other people want and some people would like to take away from you?
Your defined benefit pension is your protection in your retirement.  Defined benefits assure your income for the remainder of your life and perhaps even for the rest of your spouse’s life (depending upon the option you select).  After dedicating your life to public service, you will be assured an ongoing income after retirement.  Your benefit depends upon your age at retirement, years of service, and salary preceding retirement. 

There are groups that employ a variety of strategies to come after our pension.  CTA (our state-wide union) is a strong advocate to protect your protection in old age.  Everyone should have a secure retirement.  Teachers contribute to our own retirement with each pay check.  We pay STRS instead of FICA (Social Security), our employer pays STRS contributions as well instead of Social Security.  But beware due to the Government Pension Offset (GPO and WEP), teachers who have also accrued social security will not see all of that benefit.  NEA, our national union, continues to advocate to repeal the GPO and protect our members.  Here is the NEA link for more info

In addition to your STRS retirement, saving money now in a TSA (Tax-Sheltered Annuity) will supplement your retirement income.   You can save pre-tax dollars towards your retirement.  If you have not done, check out cta.invest for helpful information about these options.  http://ctainvest.org/home.aspx

You should be informed about The State Teachers Retirement System (CAL STRS) and your benefits. 

Here are few items:
1)       If you have not so already, you should create a CAL STRS log in to monitor your credits and other items.  Whether you are in your first or thirtieth first year, you need to do this.  Here is the linkhttps://my.calstrs.com/MyCalSTRSWebUI/Root/Pages/Login.aspx
2)      Your monthly pension benefits are calculated based upon your percent multiplier (Age factor) and your years of service.  Again check STRS website for details.
Example if your age gets you a 2% multiplier and you have 30 years of service, you will retire with 2% times 30 or 60% of your final compensation or average of highest three years. 
3)   Some teachers are part of the 2% at 60 years of age group, while newer teachers are part of the 2% at 62 group.  You in the:
a.       2% at 60 if you started in the pension fund before Jan. 1, 2013.  This group reaches the maximum multiplier at age 63 for a 2.4% factor.
b.      2% at 62 if you started after Jan. 1, 2013.  This group reaches the maximum multiplier at age 65 for a 2.4% factor.
4)     
NoHere is the immediate key detail, that will impact your paycheck on August 30:
In order to move towards a fully-funded pension fund and protect the current and future retirees,  changes were adopted in legislation in 2014 to increase employee contributions, employer contributions and state contributions.  Some of those increases took effect on July 1, 2015 and we will feel those increases in our August pay checks.  I urge you to remember when you see those impacts, you have a pension that is a tremendous  asset  in your future.
Member Contribution Increases
AB 1469 increases member contributions on compensation that is creditable to the Defined Benefit Program, which previously had been set at a rate of 8 percent of payroll.
Effective Date
Prior Member Contribution Rate
Rate Changes Under AB 1469
2% at 60 Members
2% at 62 Members*
July 1, 2014
8%
8.15%
8.15%
July 1, 2015
8%
9.20%
8.56%
July 1, 2016
8%
10.25%
9.205%
* Rate imposed on 2% at 62 members is based on the normal cost of benefits for the Defined Benefit Program. The contribution rate in future years assumes no change in normal cost.
This brief description  (I know it does not seem so) only begins to cover the complexity of our retirement.  I encourage you to read more on STRS website as well as attend CTA workshops (FRSCC will schedule trainings again this year).
When that increase hits your paycheck in August, I encourage you to remember that your STRS benefit is your valuable protection in your old age.  Whether you are 30 years or 2 years from retirement, your defined benefit pension is a great asset.  In the meantime, let’s enjoy our work every day with kids.  I hope you enjoy the teaching until you begin to enjoy the retirement years.  Have a great career.

Have a great YCTA Thursday. 
Dina
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