Pension Sense blog | November 9, 2026 | Melissa Jones-Ferguson

Puns aside, there's a lot to love about your pension.  

If you're new to CalSTRS or haven't thought about the CalSTRS Defined Benefit Program in a while, here's a rundown of the wonderful ways it works for you.

Membership

Your CalSTRS retirement benefit is a traditional defined benefit plan that provides retirement, survivor and disability benefits. 

Your defined benefit plan provides a guaranteed lifetime retirement benefit based on a set formula we'll explain shortly. The benefit from a defined contribution plan, such as a 401(k) or 403(b), is not guaranteed and depends on your contributions, expenses, and investment gains or losses.

You're eligible for the Defined Benefit Program if you're an employee of a California public school system, prekindergarten through community college, in a position that requires you to:

• Have a credential, certificate or permit.

OR

• Meet the minimum standards adopted by the Board of Governors of the California Community Colleges.

Only activities identified as creditable service qualify you for CalSTRS benefits. These activities include teaching, vocational or guidance counseling, services related to school curriculum development and a variety of administrative duties.

If you're a full-time educator, you automatically became a member on your first day of employment. If you're a part-time, substitute or temporary educator, you can choose to belong to the Defined Benefit Program or an alternative program such as the CalSTRS Cash Balance Benefit Program, if offered by your employer.

Learn more at our Membership eligibility webpage. 

Guaranteed lifetime retirement benefit

Once you become a vested Defined Benefit Program member, you're guaranteed to receive a monthly benefit after retirement for as long as you live. You become vested after accruing five years of service credit.

Fixed, predictable income

After retirement, your pension will provide monthly payments, amounting to a fixed percentage of your final compensation, based on the following formula:

age factor × service credit × final compensation = your monthly retirement benefit

Your retirement benefit will not depend on how much you contribute or how well the CalSTRS Investment Portfolio performs.

Plus, the amount and timing of your monthly retirement payments will be predictable and reliable.

Financial security

Everything CalSTRS does is grounded in our mission to secure the financial future of members. That means all investment decisions are made with long-term stability in mind.
 
Even though the CalSTRS Investment Portfolio performance doesn't directly affect the amount of your pension, it's nice to know that our pension fund has earned an average return of 9.4% per year on investments for the 10-year period ending June 30, 2026, exceeding the 7.0% annual target return.
 
The takeaway is that the portfolio's performance is strong, and so is your pension. 

Beneficiary options

You can designate a loved one as an option beneficiary to receive a lifetime monthly benefit upon your death.

You can name an option beneficiary—or beneficiaries—once you're eligible to retire. There are many important details to review about naming an option beneficiary. Do your research before making any decisions because changing or canceling your election of a beneficiary can have financial ramifications.

You can also choose a death benefit recipient to receive a one-time lump-sum payment. Having a designated beneficiary helps your loved ones receive benefits without unnecessary delays.

Inflation protection

Inflation raises prices and erodes your purchasing power, meaning your dollar buys less than before. To protect your purchasing power over time, your CalSTRS retirement benefit has two built-in protections against inflation.

First, there’s an annual benefit increase equal to 2% of your original benefit. This is a permanent, noncompounded adjustment added to your benefit each September after the first anniversary of your retirement.

There are also supplemental payments from the Supplemental Benefit Maintenance Account that begin automatically if inflation causes your benefit's buying power to drop below 85%.

Supplemental savings program

While not a part of your pension, members have exclusive access to CalSTRS Pension2®, a voluntary defined contribution plan that offers the opportunity to invest through tax-advantaged payroll deductions in low-cost, flexible 403(b) and 457(b) plans, both Roth and traditional.  

The program features easy payroll deductions, low and transparent costs, as well as objective advice and planning services at no additional charge.

Additional resources

There are many reasons to love the CalSTRS Defined Benefit Program.  

You can find more at the Understand your benefits page, as well as in the CalSTRS Member Handbook and these helpful videos. You can also learn more by signing up for a CalSTRS webinar.