What is CALSTRS? CALSTRS is short for California State Teachers Retirement System. This is the California entity that provides retirement, disability and survivor benefits for teachers and their families. Calstrs, as of 2013 had more than 1700 employers it handled pension funds for. This included school districts, community colleges, offices of education and regional occupational programs. Calstrs is on of the top 10 largest pension funds in the world with more than 800,000 members. Calstrs was formed in 1913 and has their head office located in Sacramento California.
What is a CALSTRS Pension/Retirement Division?
During the completion of a divorce property rights are often determined. Pension/Retirement accounts are sometimes one of the largest assets that need to be divided. Once the divorce judgment awarding the former spouse a portion of the CALSTRS member’s benefits is filed, the next step to divide the funds can begin. A common misconception is that the divorce judgment alone is enough to gain access to the account. A document known as a “Qualified Domestic Relations Order” or QDRO (Quad’-row) must also be filed at the court. This court order incorporates the terms of the divorce judgment regarding the CALSTRS benefits and gives specific and binding instructions to CALSTRS to complete the pension/retirement division. Once CALSTRS receives the filed QDRO they will process the division of benefits.
What is involved in a CALSTRS Pension/Retirement Division?
With most pension/retirement splits in California there’s a specific process outlined by the court to properly complete the division of an account awarded in a divorce order. A CALSTRS pension/retirement division is no different. The court initially requires that CALSTRS must be brought into the court case. Similar to the initiation of the divorce case when documents were filed and served on the other party, CALSTRS must also be served with documents that were prepared and filed indicating a party is attempting to complete a CALSTRS pension/retirement division. Similar to the divorce again, CALSTRS has 30 days to respond once they are served and then after the 30 days the parties are now permitted by the court to turn in their order for review and then the Judges signature if approved. Once signed by the Judge, the order can then go back to CALSTRS as an order directing them to divide accounts. Important note, most Judges in California are requiring an approval letter from CALSTRS indicating the QDRO has already been reviewed and approved by their legal team. We will talk more about this below.
The Different Model QDROs for the CALSTRS Pension/Retirement Division.
There are 2 formulas for division of the account.
The “Segregation Order”, used by members who divorce prior to receiving a retirement or disability benefit. This method does a direct split of the account and makes a brand new account for the former spouse in which they have full control of as if they were a member of CALSTRS.
The other option, called the “Time Rule Order” is used by members who divorce either prior to or while receiving a retirement or disability benefit. It akes into account service credits and other benefits. Some other options and variables not found in the segregation model are available in the time rule order.
For more information on each plan and the details of how it functions, visit the CALSTRS community property guide here. As mentioned above, each option is a bit different as to who can use that model and what the division options are. For information on which model would be best for you, contact a family law attorney as well as your tax professional.
What is the Time Frame for a CALSTRS Pension/Retirement Division?
Time frame for the CALSTRS pension/retirement division can vary on several different factors but below we have outlined some general timelines our team is experiencing. In California, before a QDRO or CALSTRS pension/retirement division can be processed the court requires a “joinder” to be completed. This is the initial set of documents prepared, filed and served on CALSTRS. This can be done within a few days, but does require a 30 day wait period after the serve before moving forward. Once the 30 days has elapsed the court will accept the QDRO for the CALSTRS pension/retirement division. Many of the California courts are taking about 3-5 weeks for the Judge to sign the QDRO. These two major steps in a best case scenario can be completed within about 60 days but don’t forget, as listed above, most Judges require an approval letter from CALSTRS to sign the QDRO.
Right now the CALSTRS approval process for pension/retirement division is amazingly fast. We have received approval as soon as just a few days. From what we see, this is one of the quickest timelines in the industry. Adding the CALSTRS review time to the legal timeframes and court processing times, you could be looking at around 2 months from start to finish.
How Our Team Handles CALSTRS Pension/Retirement Divisions
Understanding the complexity of the task is necessary to effectively divide a CALSTRS pension/retirement division. If we have all the information, our team can have your joinder documents ready to sign the same day of your appointment and filed at the court shortly after. We then immediately facilitate the serve on CALSTRS while concurrently working on the QDRO draft for CALSTRS review. As soon as an approval is obtained we obtain signatures and dispatch the approved CALSTRS pension/retirement division to the Judge for final execution. Once processed by the court and sent back to each party, the division of benefits can begin.
Learn more about how we handle CALSTRS pension/retirement divisions here: https://justdocprep.com/qdros/ .
More information for CALSTRS members and former spouses of members can be found at the CALSTRS website here http://www.CalStrs.com/ .
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