CalPERS Retirement Plan
The California Public Employee Retirement System, also known as CalPERS, is a defined benefit retirement plan and is coordinated with Social Security. CSU, Maritime Academy employees, other than Peace Officers, who are members of the CalPERS system are in the "State Miscellaneous, First Tier" plan.
Three sources fund the defined benefit plan. First, employees make contributions into the system based on a percentage fixed by statute and varies from 5% to 11% of employee earnings. The second funding source is earnings from investments in stocks, bonds, real estate, and other investment vehicles. The balance of funding is provided by employer contributions.
In a defined benefit retirement plan, you will receive a lifetime benefit determined
by a set formula. CalPERS uses your credited years of service, age at retirement,
and highest one-year compensation or three-year compensation while employed. This
contrasts with a defined contribution plan such, as a 401(k), in which benefits are
determined solely by the amount of contributions in an account.
Positions that mandate CalPERS membership are:
- Full-time appointments that exceed six months
- Half-time appointments averaging 20 hours per week for one year or longer
- Appointments of 3 consecutive semesters at 7.5 WTU units or more
- Membership is mandatory and employee contributions range from 5% to 11%, based on several factors, such as position held and date of employment.
- Members are strongly encouraged to create a user account on my.calpers.ca.gov, where you can create retirement estimates, update beneficiaries, and view other helpful information.
Your Retirement Formula
Retirement formulas differ and are based on dates of hire, prior service, and position held.
How Your Retirement Benefit is Calculated
- Service Credit – You earn service credit for each year or partial year you work under CalPERS membership. A full-time employee who works at least 10 months per fiscal year will earn 1.0 years of service credit. Part-time employees accrue service credit on a pro-rated basis.
- Benefit Factor – Your benefit factor is the percentage of pay to which you are entitled for each year of service. It is determined by your age at retirement and the benefit formula that you qualify for.
- Final Compensation – Final compensation is your average full-time monthly pay rate and special compensation for your 12 or 36 months (see Retirement Formula above). The full-time pay rate is used, not your earnings. If you work part-time, your full-time pay rate will be used to determine your final compensation. For example, if an employee works half-time and earns $2,000 per month ($4,000 full-time), the pay rate used for final compensation calculation would be $4,000.
Employees are vested (eligible for retirement) when they have 5 years or 10 years of CalPERS membership and have reached the minimum retirement age, based on their date of hire.
New 10 year Retiree Health and Dental Vesting Period
- New faculty hired by the CSU for the first time and who first become CalPERS members on or after July 1, 2017 or on or after July 1, 2018 for non-represented employees (Management, Confidental and Excluded groups) and represented employees in Units 1, 2, 4, 5, 6, 7 and 10. Both the new CSU hire and CalPERS membership must happen on or after July 1, 2017 for faculty or on or after July 1, 2018 for the other employees groups, cited above.
- Faculty working for the CSU prior to July 1, 2017 who become CalPERS members after July 1, 2017 are not subject to the new 10 year vesting period.
- Non-represented employees (Management, Confidental and Excluded groups) and represented employees in Units 1, 2, 4, 5, 6, 7 and 10 working for the CSU prior to July 1, 2018 who become CalPERS members after July 1, 2017 are not subject to the new 10 year vesting period.
- Prior state employment (non CSU) is not considered "CSU" employment.
How is the 10 year service credit vesting period calculated?
- 10 years of CalPERS service credit as determined by CalPERS.
- CalPERS service credit includes credit earned at any CalPERS public agency including the State of California (including CSU) and public contract agencies.
- The CalPERS website has helpful information. A member can create a user account, view videos and publications and sign up for webinars.
- The CalPERS Special Power of Attorney allows the member to designate a representative or agent to conduct their retirement affairs if they are unable to act on their own behalf.
- Active CalPERS members who want their death benefits paid to a designated beneficiary must complete a Beneficiary Designation and mail it to the address listed on the form.
- CalPERS can be reached Monday – Friday, 8:00 a.m. to 5:00 p.m. at 888-225-7377, or by sending them a confidential message at CalPERS Questions, Comments, & Complaints.