CalSTRS Funding Plan

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.

* 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.

 CalSTRS members who performed creditable service on or after January 1, 2014, will have their existing 2 percent Annual Benefit Adjustment, also referred to as the improvement factor, guaranteed in exchange for their contribution increases. This includes members who retired in 2014. For members who retired prior to January 1, 2014, no change in benefits will occur. 

Employer Contribution Increases

School employer contributions will increase from 8.25 percent to a total of 19.1 percent of payroll, phased in over the next seven years. 

State Contribution Increases

AB 1469 increases the state’s contribution attributable to the benefits in effect in 1990 but does not change the base rate of 2.017 percent. Thus, the state contribution rates, which in Fiscal Year 2013-14 were 3.041 percent, will increase over the next three years to a total of 6.328 percent. When contributions for purchasing power protection are included, the state’s total contribution rate in 2016-17 will be 8.828 percent.