Pension Sense blog | December 11, 2025 | Melissa Jones-Ferguson

This holiday season, as you reflect on reasons to be thankful, remember your pension.

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

What does that mean? Well, these benefits are something to celebrate. That’s for sure. Why? Let’s count the ways.

Membership

You’re eligible for the CalSTRS Defined Benefit Program if you’re an employee of a California public school system, prekindergarten through community college, or performing other creditable work—meaning the work that qualifies you for CalSTRS benefits.

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 Cash Balance Benefit Program, if offered by your employer.

You can learn more about membership in the CalSTRS Member Handbook.

Guaranteed lifetime retirement benefit

As a vested Defined Benefit Program member, you’re guaranteed to receive a lifetime monthly benefit after retirement for as long as you live. You become vested after five years of service credit under the program.

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.

Additionally, 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 California’s public-school educators. That means that investment decisions are made with long-term stability in mind.

And even though the CalSTRS Investment Portfolio performance doesn’t directly affect your pension, it may be nice to know that our pension fund has earned an average return of 8.1% per year on investments for the 10-year period ending June 30, 2025, exceeding its 7.0% annual target return.

Beneficiary options

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

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

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

Inflation protection

To protect your purchasing power over time, your CalSTRS retirement benefit has two built-in protections against inflation.

First, there’s an annual 2% increase on your original benefit. This is a permanent, non-compounded adjustment added to your initial benefit.

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 an 85% threshold.

As you can see, there’s more than just cider to mull (over) this holiday season. There are many benefits to the CalSTRS Defined Benefit Program for which members can be thankful. 

So, add your pension to the list of things you have to celebrate!

More information on your pension is available in your Member Handbook and these helpful videos. You can also learn more by signing up for a CalSTRS webinar.