Moving from Cash Balance to Defined Benefits
Are you currently enrolled in the CalSTRS Cash Balance Program?
Do you plan to make working as a faculty member at a California community college your primary career for the foreseeable future?
Then consider this option… If you are currently enrolled in the Cash Balance (CB) Program and plan to continue working as a faculty member at SRJC—and/or, perhaps, other community colleges in the State—for many years into the foreseeable future, you might want to consider switching to the CalSTRS Defined Benefit (DB) Program. For a basic description of these two programs, click here to read the article about adjunct faculty retirement plan options in this issue of Update. (You should know that recent legislation has changed some provisions for retiring faculty. Click here for more information.)
One of the most significant differences between the Defined Benefit (DB) Program and the Cash Balance (CB) Program is the benefit that each of these programs provides. The CB Program provides a retirement benefit based on the balance in your account at the time you retire, while the DB Program provides a lifetime pension that may far exceed the total amount that you and the District have contributed to your account and the compounded interest that those contributions have generated.
Adjunct faculty may choose to enroll in the DB Program at any time; however, once you are a member, you must remain in the program for the duration of your employment. If you should decide to switch to the DB Program, contributions to the CB Program would stop. You could then use the balance in your CB account to purchase "service credit" in the DB Program, which will help you reach the goal of vesting sooner, in order to qualify for the lifetime pension.
For more information about using the balance in your CB account to purchase service credit in the DB Program, click on this link to the CalSTRS Members Handbook for 2012
(http://www.calstrs.com/Help/forms_publications/printed/MemberHandbook/index.aspx) and scroll down to the section on page 27 entitled "Consolidating Your Cash Balance and Defined Benefit Coverage."