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Retirement 

The California State University (CSU) supports the efforts of faculty and staff to plan a fulfilling, financially secure retirement. As part of its total rewards package, the CSU offers an array of retirement options to help employees meet thier financial goals.
 
Retirement program eligibility is based on appointment type, duration, full-time equivalency (FTE) and previous public agency or reciprocal agency employment. The state-mandated retirement program is the California Public Employees Retirement System (CalPERS) and is coordinated with Social Security. Employees excluded from CalPERS membership are covered by the CSU Part-time Seasonal Retirement Plan​.
 

CalPERS Retirement System


The California Public Employees' Retirement System (CalPERS) offers a defined benefit retirement plan. It provides benefits based on members' years of service, age, and final compensation. In addition, benefits are provided for disability death, and payments to survivors or beneficiaries of eligible members. By statute, the California State University (CSU) participates in the CalPERS program. Membership is mandatory for those CSU employees employed full-time for a period of six months or part-time for a period of one year in duration.

CalPERS uses contributions of the employer and the employee as well as income from investments to pay for employee retirement benefits. Employee and employer contributions are a percentage of applicable employee compensation and are made on a pre-tax basis; federal and state taxes are deferred until benefits are paid. Any investment return on an employee's account is also tax-deferred. The investment of contributions are managed by CalPERS; therefore, employees do not bear any investment risk. Employee benefits grow with years of service and final average salary.

Retirement benefits are calculated using a formula with three factors:

Service Credit (Years) x Benefit Factor (% per year) x Final Compensation (Monthly $) = Unmodified Allowance ($)

  • Service Credit - Total years of employment with a CalPERS employer. This could include other types of service credit such as sick leave and service credit purchase. Employees can view their Annual Member Statement by logging in to my|CalPERS to view service credit.
     
  • Benefit Factor - Percentage of final compensation for each year of service credit, based on an employee's age at retirement and retirement formula(s).
     
  • Final Compensation – Employee's highest average full-time monthly pay rate for 12 or 36 consecutive months of employment, depending upon the employee's benefit formula (if the employee pays into Social Security, $133.33 per will be deducted from the employee's final compensation)
     
  • Unmodified Allowance - Highest benefit payable

Pension Reform

The California Public Employees' Pension Reform Act (PEPRA), which took effect in January 2013, changes the way CalPERS retirement and health benefits are applied, and places compensation limits on members. The greatest impact is felt by new CalPERS members.
 
As defined by PEPRA, a new member includes:
  • A member who first established CalPERS membership prior to January 1, 2013, and who is rehired by a different CalPERS employer after a break in service of greater than six months
  • A new hire who is brought into CalPERS membership for the first time on or after January 1, 2013, and who has no prior membership in any California public retirement system
  • A new hire who is brought into CalPERS membership for the first time on or after January 1, 2013, and who is not eligible for reciprocity with another California public retirement system
  • All members that don't fall into the definitions above are considered classic members. Classic members will retain the existing benefit levels for future service with the same employer.
     
PEPRA is a complex law that can generate many questions. For more information, visit CalPERS website.
 
Retirement Benefits - All Employee Groups (Except Public Safety)

 

PEPRA Membership

Classic Membership

Employment and Membership

Hired by state and new CalPERS member on or after January 1, 2013.

Hired by state and new CalPERS member between January 15, 2011 and December 31, 2012

Hired by state and new CalPERS member prior to January 15, 2011

Retirement Formula

2%@62

2%@60

2%@55

Highest Benefit Factor

2.5%@67+

2.418%@63+

2.5%@63+

Vesting

5 Years

5 Years

5 Years

Minimum Retirement Age

52

50

50

Salary used to calculate retirement

Average highest 36 months (subject to cap)

Average highest to 36 months

Average highest to 12 months

PEPRA Compensation Cap

2017: $118,775 for Social Security Participants; $142,530 for Social Security non-participants

N/A

N/A

401(a)(17) Compensation Limit

N/A

2017: $270,000

2017: $270,000

(Not applicable to employees with CalPERS membership prior to 7/1/1996)

 


Retirement Benefits - Public Safety (Police Officer/Firefighter)

 

PEPRA Membership

Classic Membership

Employment and Membership

Hired by state and new CalPERS member on or after January 1, 2013.

Hired by state and new CalPERS member between July 1, 2011 (January 15, 2011 for Mgmt) and December 31, 2012

Hired by state and new CalPERS member prior to July 1, 2011

Retirement Formula

2%@57

2.5%@55

3%@50

Highest Benefit Factor

2%@57+

2.5%@55+

3%@50+

Vesting

5 Years

5 Years

5 Years

Minimum Retirement Age

50

50

50

Salary used to calculate retirement

Average highest 36 months (subject to cap)

Average highest 36 months

Average highest 12 months

PEPRA Compensation Cap

2017:$142.530

N/A

N/A

401(a)(17) Compensation Limit

N/A

2017:$270,000
 

2017:$270,000

(Not applicable to employees with CalPERS membership prior to 7/1/1996)

 


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