A refund is available to any CalSTRS member upon terminating all CalSTRS-covered employment.

No. California law does not allow you to take a partial refund or borrow against your accumulated contributions and interest on account with CalSTRS. The funds in your CalSTRS account are paid out in full upon refunding.

You can choose to receive your refund as a direct payment to you or as a rollover to a financial institution.

To request a refund, complete the Refund Application. The application includes detailed instructions. 

If your refund is paid directly to you, the direct payment is subject to taxes. CalSTRS is required to withhold 20% for federal income tax, but you may designate a higher percentage if you choose. State tax withholding is optional. If you choose to have California state income tax withheld, CalSTRS will withhold at 2%. Remember, there are penalties for not paying enough tax during the year, either through withholding or quarterly estimated tax payments.

If you receive your refund payment before age 59½, you may have to pay an additional 10% federal income tax and an additional 2.5% state income tax for early distribution.

Contact the California Franchise Tax Board or IRS, or a professional tax adviser, for additional information.

Yes, you can if you are selecting a direct payment. You will need to complete and submit the Direct Deposit Authorization form (AS1130) together with your Refund Application. A direct deposit can take 1-2 billing cycles to complete. Due to this timeline and the requirement for the prenote verification, there is a possibility that your payment will be sent to you in a form of a check if the payment has been processed and the prenote verification with your bank has not been completed yet.

Defined Benefit account: CalSTRS receives many applications which are processed in the order received. Contact CalSTRS for the most current timeframes.

Your initial refund check represents the contributions and interest posted to your account as of the date of the refund. If additional contributions and interest are posted to your account after your initial refund check is issued, a second check will be mailed or directly deposited to your bank if you have signed up for direct deposit.

Defined Benefit Supplement account: After you terminate employment, CalSTRS is required by California law to wait six months before we can issue a check for the balance of your Defined Benefit Supplement account. Your Defined Benefit Supplement funds will continue to earn interest during this waiting period. If you return to CalSTRS-covered employment within the six-month waiting period, you will not be eligible for a Defined Benefit Supplement termination benefit.

Additionally, under California law, CalSTRS can distribute only one Defined Benefit Supplement termination benefit within any five-year period. If you later return to CalSTRS-covered employment and apply for a refund before five years have passed since payment of your last Defined Benefit Supplement termination benefit, CalSTRS cannot process your Defined Benefit Supplement payment until the five years have passed.

You may have a Defined Benefit Supplement account that provides additional income in retirement.

If you made member contributions to CalSTRS starting January 1, 2001, you have a Defined Benefit Supplement account. From January 1, 2001, to December 31, 2010, one-fourth of your 8 percent monthly contribution went into your Defined Benefit Supplement account.

In addition, contributions on earnings in excess of one year of service credit in a school year, special compensation and limited-term salary enhancements go into this account.

Employer certification of employment termination is required under California law if you were employed within the last 12 months. Termination of employment means an action by you, such as employment resignation, or an action by your employer, such as dismissal or layoff. Termination does not automatically occur at the end of the school year.

If you terminated employment within the last 12 months, your employer must certify that you terminated employment. The employer certification will be completed by your employer electronically. Your employer will receive a notification to certify your employment termination once you have submitted a complete and valid Refund Application to CalSTRS. If your employer does not respond to the notification sent to them to certify your employment termination, your request for a refund will be rejected.

If you were employed within the last 12 months, you must terminate all CalSTRS-covered employment in the California public school system and your date of termination must have passed to be eligible to apply for a refund.

Substitute teaching, including part-time substituting, qualifies as employment and must be terminated.

When you complete the Refund Application, you provide the address you would like your check mailed to. If you move, notify CalSTRS immediately of your new address. You can change your address online using your myCalSTRS account or by completing and submitting the Address Change Request form.

Send your application directly to CalSTRS:

CalSTRS
P.O. Box 15275, MS 65
Sacramento, CA 95851-0275

Or fax it to 916-414-5964.

Or complete an application online at myCalSTRS.com.

To be eligible to complete and submit your Refund Application online using myCalSTRS, you must:

• Elect a direct payment or a rollover to CalSTRS Pension2, and
• Not have worked in a CalSTRS-covered position within the past 12 months.

Completing and submitting your Refund Application online can mean faster processing of your refund payment.  

Even if you are not eligible to submit your Refund Application online, you can still complete your application electronically. However, you will need to print out your application, obtain any necessary signatures, and then send your application to CalSTRS. 

Yes, you may cancel your refund if you return the funds in full (gross amount) to CalSTRS within 30 days of the payment issue date. You must also send CalSTRS a written request to cancel your refund.