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The Part-time, Seasonal, and Temporary (PST) Employees Retirement Program is a mandatory retirement savings program created by federal law for State employees and California State University employees who are not covered by a retirement system or Social Security. Savings Plus administers the PST Program in accordance with the Internal Revenue Code Section 457 Deferred Compensation Plan (DCP).
Employees in the PST Program are not covered by Social Security and are excluded from a pension through the California Public Employees' Retirement System (CalPERS), based upon their length of employment or time base.
There are no employer contributions or matching of funds in the PST Program. Participation in the PST Program does not limit employee contributions to an Individual Retirement Account (IRA).
PST Program participation is mandatory for employees who meet the eligibility requirements, unless an exclusion applies. Employees who are eligible for participation in the PST Program generally include the following employees, if excluded from membership in CalPERS:
The following employees are excluded from PST Program participation:
All employees who meet the requirements are enrolled in the PST Program. Per Federal regulations, PST employees are fully vested (100%) upon enrollment and are entitled to receive a benefit immediately. HR professionals are responsible for establishing PST coverage for eligible employees. (See PPM Section H 200 or PAM Item Code 505 for instructions about document processing).
PST employees are also eligible to enroll and contribute to the 401(k) and 457(b) Plans. The 401(k) and 457(b) Plans provide the employee an opportunity to invest a portion of their salary on both a pre-tax and Roth basis and provide the employee the flexibility to select from an array of investment options. It is easy to enroll, employees can visit savingsplusnow.com or contact the Savings Plus Solutions Center.
The PST Program withholds 7.5% of an employee's gross wages (pre-tax). PST Program contributions are in addition to Medicare taxes.
Savings Plus invests PST Program deductions in the Savings Plus Short-Term Investment Fund – PST (STIF-PST), under the employee's name. This fund seeks to maximize total return consistent with capital preservation. For more information refer to the PST Fund Fact sheet located at savingsplusnow.com.
Savings Plus issues semi-annual statements reflecting employee contributions, earnings, and their current balance. PST statements are mailed to the employee's address on record.
It is important employees keep their address updated with Savings Plus to ensure receipt of their PST statement. Savings Plus continues to send statements as long as the employee has a balance in the PST Program account.
Savings Plus issues PST statements each February and August for the periods of July 1 through December 31 and January 1 through June 30.
Employees who are actively employed must submit address and name changes to their HR Office via the Employee Action Request (EAR) form.
Employees who are no longer employed with the state and want to change their address with Savings Plus, may contact a Customer Service Representative toll-free at (855) 616–4776, available Monday through Friday from 5 a.m. to 8 p.m. PT
For name changes, the employee must provide a copy of the marriage license, dissolution of marriage, or court document authorizing the name change.
Contact Savings Plus for more information.
After they retire or separate from all state employment, employees may request a PST Benefit Payment Booklet found in the Forms/Publications section of savingsplusnow.com.
For more information contact a Customer Service Representative at (855) 616-4776, 5 a.m. to 8 p.m. (Pacific Time), Monday through Friday. Use the queue word "Representative" to speak directly with a Customer Service Representative.
Savings Plus issues PST distributions no sooner than 90 days after the last PST Program contribution posts into or out of the employees account and their eligibility has been verified. Employees may request a direct payment or a direct rollover to an Individual Retirement Account (IRA) or other retirement plan. Payments are issued via direct deposit, at no charge, to one financial institution of the employee's choice or via check ($2 fee deducted from the employee's account) to their address on file.
Savings Plus mails the employee's Form 1099-R by January 31 of the following year for tax reporting purposes. The Form 1099-R applies to both direct payment and direct rollover (non-taxable event) payment options.
Employees may request a direct payment to receive their entire account balance. Savings Plus reports direct payments to the IRS as ordinary income. A mandatory 20% is withheld from the payment for federal income taxes on amounts of $200 or more. Additionally, California residents are subject to state income tax withholding at a rate of 10% of the federal tax withholding unless the employee requests otherwise by completing a California State Withholding Certificate for Pension or Annuity Payments (DE-4P) found in the Forms/Publications section of savingsplusnow.com.
Employees may request a direct rollover to roll over funds from their PST account to an IRA, 401(k) Plan, 457(b) or 403(b) Tax Sheltered Annuity as long as the entity sponsoring the plan accepts 457(b) funds. To request a direct rollover to a new provider, the employee must attach a Letter of Acceptance from the new provider on the new provider's letterhead to the PST Benefit Payment Application.
If the employee is age 72 or older and elects to rollover funds, Savings Plus will process the Required Minimum Distribution (RMD) and issue payment directly to the employee before transferring funds to the new provider. Refer to the Summary 402(f), which can be found in the Forms/Publications/Governing Documents and Reports section of savingsplusnow.com.
Employees, who become eligible for CalPERS, are no longer eligible for the PST Program. The 7.5% deduction from their paycheck stops and all accumulated contributions and earnings in the account will automatically transfer to a 457(b) Plan account with Savings Plus (a Welcome Letter will be sent). If the employee does not have a 457(b) Plan, Savings Plus will set one up. The PST Program is a type of 457(b) Plan.
Employees, who contribute to a 457(b) Plan in the same year in which they contributed to the PST Program, must include their PST contributions in determining their total annual contributions to the 457(b) Plan.
Employees, who become eligible for CalPERS, should review the Welcome Letter they receive from Savings Plus to select investment options and manage their account. In addition, Savings Plus Retirement Specialists are available for workshops and one-on-one assistance in retirement planning, developing an asset allocation model, and the benefits of tax advantaged investing
Employee PST accounts may be considered "unclaimed" or dormant if no payroll deductions go into or out of the account for two years. Once an account becomes dormant, Savings Plus will send a check in the amount of the account balance if it is less than $1,000. If the amount is a $1,000 or more, it is transferred to the State Controller's Office (SCO), Unclaimed Property Unit after three years from being considered dormant. To claim funds, employees may call SCO at (800) 992-4647 (residents of CA) and (916) 323-2827 (out-of-state or foreign). SCO requires the individual's name and social security number to confirm their funds were escheated. Upon confirmation, the employee may request a claim form. Employees may "Search for Unclaimed Property" online at sco.ca.gov.
The employee is not required to provide a receipt of a cash balance notification from U.S. Claims Service or any other private company in order to claim the money. Employees do not have to pay for a service they can perform themselves.
The PST Program is governed by the Internal Revenue Service (IRS), Internal Revenue Code Section 457. The Federal Omnibus Budget Reconciliation Act of 1990 amended the Internal Revenue Code (26 U.S.C. 3121 (b)(7)(F) to mandate that wages of a state or local government employee (for service after July 1, 1991) shall be subject to Social Security taxes unless the employee is a member of a retirement system maintained by the employer. The PST Program satisfies this mandate. This requirement generally applies to part-time employees who work less than half-time and to employees who are not considered permanent (e.g. seasonal, intermittent, or limited-term), who are excluded from membership with the CalPERS and are not covered by Social Security.
PST Program coverage began with the August 1991 pay period, as the regulations did not require coverage retroactive to July 1, 1991.