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 who are eligible.
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.
Employees Eligible for Membership
- Full-time appointments that exceed six months.
- Half-time appointments (50 percent or more) for one year or longer.
- Temporary faculty are required to enter CalPERS membership commencing with the third consecutive semester appointment at half time or more.
- Irregular-basis employees, such as seasonal, limited term and intermittent (special consultant and casual worker excluded) who work 1,000 hours or 125 days in a fiscal year.
Employees excluded from CalPERS membership are covered by the CSU Part Time Retirement Plan.
On January 1, 2013, a Pension Reform legislation went into effect. Please review the retirement formula chart to see the previous and new retirement formulas that are applicable to CSU employees.
CalPERS Retirement Contributions
- Employees contribute a percentage of gross monthly income minus the applicable exclusion amount (Gross Income - exclusion amount x applicable %).
- The contribution is not subject to federal and state taxes.
- The CSU also contributes to CalPERS.
CalPERS Retirement Benefits
- The plan is a defined benefit plan with retirement benefits calculated based on age at retirement, years of service and compensation.
- Retirement vesting is at five years of PERS credited service.
- With the exception of members in the 2% at 62 formula (minimum retirement age is fifty-two (52), employees are eligible to retire and receive a monthly pension benefit when they are at least age 50 and have a minimum of five years of CalPERS-credited service.
- Any unused sick leave is converted to additional service credit if the employee retires within 120 days of separation from employment. Eight hours of sick leave equals one day (.004 of a year of service). It takes 250 days of sick leave to receive one year of service credit (.004 x 250 = 1 year).
- CSU retiree medical, dental and vision benefits may be available to employees (and their eligible dependents) who retire within 120 days from the date of separation from employment.
Applying for CalPERS Service Retirement
Employees should begin their retirement planning at least one year before their retirement date. However, they should not submit their application to CalPERS sooner than 90 days prior to their retirement date. Completed applications should be returned to the CalPERS Regional Office closest to the employee.
CalPERS Power of Attorney
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.
As a member of CalPERS, employees also participate in Social Security.
- Social Security and Medicare taxes are withheld from your paycheck.
- Withholding rates are 6.2 percent for Social Security and 1.45 percent for Medicare.
- Social Security earnings limitation, commonly referred to as the taxable maximum is $147,000 effective January 1, 2022.
- There is no limit for Medicare.
- Beginning in 2013, an additional Medicare tax of 0.9% will be applied when an employee's compensation exceeds $200,000.
Social Security Resources: Social Security Administration (SSA) website