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CalSTRS Increases Lump‑Sum Death Benefit by 2.75%
Summary
The board approved a 2.75% increase to the lump‑sum death benefit, the maximum allowed under the policy tied to California inflation and the plan's long‑term assumption, raising the primary lump‑sum amount to $7,288 for coverage A members.
The CalSTRS board approved a 2.75 percent increase to the lump‑sum death benefit, reflecting the board policy that ties the annual adjustment to California inflation but caps increases at the plan’s long‑term assumption.
Actuarial staff said California inflation for the prior calendar year was 2.96 percent, which exceeded the 2.75 percent cap; because the policy caps increases at 2.75 percent, staff recommended that amount. The increase raises the lump‑sum payment for active and retired members under Coverage A to $7,288 (an increase of about $195) and raises the Coverage B amount (statutorily set at four times the Coverage A amount) to $29,152.
The board moved and seconded the staff recommendation and approved it by voice vote. Staff noted a small catch‑up reserve resulting from the difference between measured inflation and the cap; that reserve is being tracked and could affect future adjustments under the policy.
Board members confirmed the coverage‑A versus coverage‑B distinctions and that members who elected coverage choices previously remain subject to those elections.
