State law changes STRS creditable compensation for certificated staff starting July 1, 2002. Assembly Bill 2700, which was adopted by the legislature, will enhance CalSTRS benefits by expanding the types of services and compensation that are creditable for retirement purposes.

     Effective July 1, additional compensation pay will be subject to STRS contribution. Both CUSD and the employee will contribute to STRS for additional assignment pay including stipends, coaching/extra curricular aassignments, hourly assignment pay, summer school/after school intervention programs, and other types of compensation outside of the employee's regular contracted day.

Q. Why might my take home salary be reduced?

     The provision of AB 2700 will enhance your benefits by expanding the types of service and compensation that are creditable to CalSTRS for retirement purposes. Compensation for summer school and intercession, along with stipends for the performance of extra duties, will now become creditable and require both member and employer contributions. Member contributions are 8% of the reported compensation. Therefore, you will have 8% of your CalSTRS covered pay deducted for your CalSTRS benefit.

Q.  What is meant by summer school being creditable to CalSTRS?

     Beginning with service performed July 2002, and later, members will have 8% employee and 8.25% employer contributions reported by their employer to CalSTRS on summer school earnings. For example, if a member earns $2,500 for summer in July 2002, the employer will deduct $200(8% x $2,500=$200) in employee contributions from the July paycheck and contribute $206.25 (8.25% x $2,500=$206.25) in employer contributions. These contributions will be sent to CalSTRS.

Q. What are the enhanced benefits from AB 2700?

     The expanded definition of creditable conpensation permits a member to earn additional service credit for such additional activities as summer school service and extra duties. Member and employer contributions (8% each) on compensation earned for service in excess of one will be credited to the member's Defined Benefit Supplement account. These additional contributions will increase the member's DBS account without reducing the benefit payable under the defined benefit program, which is the CalSTRS primary benefiot program.

Q. What if I have less than a full year of service credit from my normal assignment?

     Starting July1, the newly "creditable" additional duties will generate additional service credit. This will permit the member to earn up to one year of service credit during the school year. Currently, these duties cannot be used to bring a member up to one year of service credit.

     It is impossible to briefly summarize all the changes resulting from AB 2700. However, to capture a flavor of the change would be to state that almost all compensation will become creditable to CalSTRS and will require contributions. For more information on changes to creditable compensation, you are encouraged to visit the CalSTRS website at www.calstrs.com.