Additional earnings credit FAQ

I received a letter indicating I was eligible to receive an additional earnings credit. What is this?

The Teachers’ Retirement Board has the statutory authority to declare a credit when the funded status of the Defined Benefit Supplement Program and the Cash Balance Benefit Program surpasses certain thresholds after periods of substantial investment earnings. The programs met the thresholds for a credit for the fiscal year ending June 30, 2025. The board declared the credit on May 28, 2026.

Does everyone receive an additional earnings credit payment?

No. The payment eligibility is based on the Defined Benefit Supplement or Cash Balance account balance as of June 30, 2025, and the account status at the time the credits were posted.

If you’re still working and contributing to CalSTRS, or have funds remaining in your Defined Benefit Supplement or Cash Balance accounts from previous employment, your credit will appear on your Retirement Progress Report.

On what amount is this credit based?

Additional earnings credits are based on a percentage of an eligible member’s or participant’s balance of credits as of June 30, 2025.

How is the credit calculated?

The amount of the Defined Benefit Supplement account credit for active and inactive members is calculated as 4.53% of the balance of credits (account balance) as of June 30, 2025.

The amount of the Cash Balance Benefit Program credit for active and inactive members is calculated as 2.81% of the balance of credits (account balance) as of June 30, 2025.

I received a letter from CalSTRS regarding my eligibility to receive an additional earnings credit payment, and I accidentally threw it away. Can I get a duplicate copy?

Yes. You can request a duplicate copy of the letter by contacting the CalSTRS Contact Center.

If I’m eligible for an additional earnings credit payment, how will my payment be issued?

Your payment will be issued according to your payment preference for your Defined Benefit Supplement or Cash Balance account: direct deposit, paper check or rollover.

If I receive a payment and decide I want to roll it over, can I return it to CalSTRS to do so?

Once your payment is issued, the payment method cannot be changed. You may still do a roll over by making a deposit into a qualified IRA or eligible employer plan that will accept it. You will have 60 calendar days after you receive your CalSTRS payment to make the deposit. For additional information, see the Tax Considerations for Rollovers booklet.

What will be deducted from this payment?

The net payment you receive will be the amount of the credit plus interest, minus any outstanding amount you may owe CalSTRS, tax withholding or deductions.

Will this payment affect my taxes?

Yes. All payments will be reflected on Form 1099-R for the year the payment was issued.

I received a portion of my former spouse or registered domestic partner’s CalSTRS accounts after our divorce or separation. Am I eligible for an additional earnings credit?

No. You’re considered a nonmember spouse and nonmember spouses are not eligible for the additional earnings credit.