Due to exceptionally high inflation, the California State Teacher’s Retirement System (CalSTRS) began sending supplemental payments to a new group of retired members starting Oct. 1. Members who retired before 2005 are now eligible to receive a Supplemental Benefit Maintenance Account payment, which is issued quarterly.
The following FAQs are to help understand what is different and who will be seeing a change in their benefits. CalSTRS encourages Direct Deposit to help avoid missing a payment in the mail. Members can sign up at www.calstrs.com/sign-up-for-direct-deposit.
What is the Supplemental Benefit Maintenance Account payment for retired members?
The SBMA helps ensure member benefits keep pace with inflation and provides a second payment in addition to established benefits to ensure retired members retain 85 percent of their purchasing power with their benefits. These second checks are issued in the same manner as the members’ chosen way to receive their monthly benefit (either mail or direct deposit). SMBA payments are issued quarterly.
How has the latest inflation spike impacted the SBMA payments?
Due to the high level of inflation, members who retired in 2005 or earlier will now be receiving SBMA payments. Roughly 50,000 retired members and beneficiaries will receive SBMA payments for the first time in October bringing the total recipients to almost 112,000.
I retired after 2005. Will I see a benefit?
No. This only applies to members who retired before 2005 that have lost some of their purchasing power due to inflation. Eligibility is reviewed automatically and there is no need to contact CalSTRS if you retired after 2005.
How will I know if I am eligible to receive an SBMA check?
CalSTRS will issue a letter confirming your eligibility and you will receive either a second check in the mail or direct deposit. Due to the established 2 percent increase, plus adjustment for the inflation spike, the SBMA payment increased by 8.3 percent of the member benefits.
Is this the result of recently passed legislation, Senate Bill 868, for the most senior retirees?
No. These FAQs address the already established SBMA allocation. The new law, SB 868, only applies to members who retired before 1999 so their purchasing power may keep pace with inflation. Additional information about the new law taking effect July 1, 2023 will be issued soon.