California Code of Regulations › Title 5 - Education › Division 3 - Teachers' Retirement System › Chapter 2 - Compensation › Article 5 - Appropriate Crediting of Contributions › Section 27601 - Appropriate Crediting of Contributions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Upon determination that
				  compensation was treated inconsistently, except in cases where an adjustment to the
				  crediting of contributions would not result in a change to a member's final
				  compensation, CalSTRS shall limit the amount of contributions that are credited to
				  the Defined Benefit Program during the period of time specified in subdivision (b).
(1) If the inconsistent treatment of compensation
				  is the result of a restructure of compensation, the employer shall report the amount
				  that was restructured to the member's Defined Benefit Supplement account.
(2) If the inconsistent treatment of compensation
				  is not attributable to a restructure, the employer shall report the portion of
				  compensation in excess of the following thresholds to the member's Defined Benefit
				  Supplement account:
(A) For inconsistent
				  compensation increases concurrent with a change in position, the threshold for the
				  fiscal year in which the inconsistent compensation increase occurred is the
				  immediate predecessor's salary increased by the percentage calculated pursuant to
				  paragraph (3). The resulting amount is the baseline on which the percentage increase
				  calculated pursuant to paragraph (4) shall be applied to determine the threshold for
				  each subsequent fiscal year.
(B) For
				  inconsistent compensation increases not concurrent with a change in position, the
				  threshold for the fiscal year in which the inconsistent compensation increase
				  occurred is the member's compensation earnable for the year prior to the year in
				  which the inconsistent increase occurred increased by the percentage calculated
				  pursuant to paragraph (3). The resulting amount is the baseline on which the
				  percentage increase calculated pursuant to paragraph (4) shall be applied to
				  determine the threshold for each subsequent fiscal year.
(3) For the purposes of subparagraphs (A) and (B)
				  of paragraph (2), the percentage increase to establish the baseline amount shall be
				  the greater of either (A) or (B), whichever is applicable, or (C), as follows:
(A) 150 percent of the median percentage increase
				  of the compensation earnable of the members at the member's employer between that
				  fiscal year and the previous fiscal year, if that employer has at least 30
				  members.
(B) 150 percent of the median
				  percentage increase of the compensation earnable of the members within the member's
				  county between that fiscal year and the previous fiscal year, if the member's
				  employer has less than 30 members.
(C)
				  150 percent of the median percentage increase of the compensation earnable of active
				  members statewide, or zero, whichever is greater.
(4) For the purposes of subparagraphs (A) and (B)
				  of paragraph (2), the percentage increase applied during each subsequent fiscal year
				  shall be calculated as follows:
(A) For each
				  subsequent inconsistent increase that is not concurrent with a change in position,
				  the percentage calculated pursuant to paragraph (3) is applied to the prior year's
				  threshold amount.
(B) For each
				  subsequent inconsistent increase that is concurrent with a change in position, the
				  percentage calculated pursuant to paragraph (3) is applied to the immediate
				  predecessor's salary.
(C) For each
				  subsequent consistent increase that is not concurrent with a change in position, the
				  same percentage increase that the member earned is applied to the prior year's
				  threshold amount.
(D) For each
				  subsequent consistent increase that is concurrent with a change in position, the
				  threshold amount is the actual compensation earnable for that new
				  position.