Retirement Fund

We’ve got some great news to share about your future retirement! Child Care Providers United (“CCPU”) members united to prioritize ensuring providers could earn a retirement benefit in recognition for the essential work providers do, and as such secured up to $80 million per year in this bargaining agreement for eligible child care providers to help provide you with retirement security. These benefits will be provided by the Child Care Providers United – California Child Care Providers Retirement Plan (the “Retirement Plan”), a program governed by the Board of Trustees, with representatives from SEIU Local 521, SEIU Local 99 and the United Domestic Workers/AFSCME Local 3930. The CCPU Retirement Plan is historic as the first-ever in the country for home-based child care providers.

This is a summary of the Plan for eligible providers. Later this summer eligible providers will receive detailed information, including information about your benefit, from Zenith American Solutions, who we’ve chosen to administer the Plan. Therefore, this notice does not contain information about the actual benefit each eligible provider will receive.

WHAT – What benefits does the Retirement Fund expect to offer providers?

Plan Rules
Eligible participants* You are eligible to participate in the Retirement Plan for a 2024 contribution if you are:

  • A licensed child care provider
  • Who has been paid 6 or more months of child subsidy in the 2023 calendar year (can be non-consecutive months).
Eligibility for benefit credit for contributions in 2024* You will earn your full service credits for 2023 if you were paid for ten or more months of child subsidy in 2023.

If you were paid for 6 or more months of child subsidy, you will receive 60% of your service credits, 70% for 7 months, 80% for 8 months and 90% for 9 months. You will not earn any service credit if you were paid for less than 6 months.

Contributions The only contributions to the Retirement Plan will be paid by the State. The Plan does not accept contributions from you.
Amount of annual employer contributions for 2023 service allocable to participants in 2024* The amount of the State contribution on your behalf in 2024 will be based on two factors:

(1)  the number of years and months that you held a license as of 12/31/23; AND

(2)  the number of months that you were paid for a subsidized child in 2023.

  • If you were paid for ten or more months, you will receive your full contribution.
  • If you were paid for 6 to 9 months, you will receive a pro-rated contribution.
  • If you were paid for less than 6 months, you will not receive a contribution in 2024.
Amount of annual employer contributions for 2024 service allocable to participants in 2025* You will earn one full service credit for the State contribution on your behalf in 2025 if you were paid for ten or more months of child subsidy in 2024. If you were paid for 6 to 9 months in 2024, you will receive a pro-rated service credit. You will not earn any service credit if you were paid for less than 6 months in 2024.
Vesting You are “vested” in any contribution correctly made to your account. You do not need to work a minimum number of years before 2024 to be entitled to a benefit.
Distribution events You can elect to receive your account when:

  • You stop all work as a licensed provider for 9 consecutive months at any age (“terminate from service”);
  • You stop all work as a licensed provider for 3 consecutive months at age 60 or older (“retirement”); or
  • You attain age 73, which is the age you are required to start receiving payments, unless you are still working.
Forms of distributions If you are age 60 or older and stop all work as a licensed provider for 3 consecutive months and elect to retire, you can choose to receive your account balance as:

  • One lump-sum payment
  • Approximately equal monthly payments for 5 years
  • Approximately equal monthly payments for 10 years

If you are younger than age 60 and stop all work as a licensed provider for 9 consecutive months, you can only elect to receive your account as one lump-sum payment.

Death benefits Since your account is 100% vested, you can designate a beneficiary (or multiple beneficiaries) to receive your account balance if you die before you receive it.
Investments The Board of Trustees will manage how the Retirement Plan is invested on your behalf, with the assistance of investment professionals.

*Special rules apply to providers where more than one provider is on the payment record.

WHO – Who is eligible for the RETIREMENT Fund benefits?

State contributions to the Retirement Plan are tied to the child care subsidy program. To be eligible for retirement benefits in 2024, you must be a licensed provider who has have been paid for work with a subsidized child in at least 6 months in 2023-these months do not need to be consecutive. License exempt providers are not eligible; however, if you become licensed in a year, your work in that year may count for eligibility.

WHEN – When will the benefits be available?

The Plan is effective January 1, 2024, and will be implemented by June 30, 2024. Since it will take time to set up the Plan, payments for benefits likely will have a delayed start but will cover your eligible employment based on your work in 2023.

HOW – How can I get help enrolling?

The Plan will automatically enroll you based on the information it has but you should immediately complete the form that the Plan will send you over the summer to be sure that the Plan has all of your current information and that you receive credit for your years of licensed work.

FAQ #1: Are the benefits from the RETIREMENT Plan taxable income to me?

Answer #1: The State contributions to your Retirement Plan account are not taxable to you until you receive a distribution. There may be distributions options to defer those taxes.

FAQ #2: When can I sign up? Where can I learn more?

Answer #2: You will receive more information in the coming months. The Plan also will have a website and an administrative office for you to call shortly.

CCPU will be holding two zooms to review Plan information and to answer many common questions. Register at the links below, including any questions you may have.

  • Tuesday, July 9 at 6:30pm: Register HERE
  • Thursday, July 18 at 6:30pm Register HERE

Additionally, providers with retirement questions that may not be addressed on the Zoom can call 888-583-CCPU (2278) from 12pm to 8pm Monday-Friday. Important: only communication from Zenith later this summer will be able to provide individual-level information on your actual benefit amount and circumstances.