Public Employee Retirement System (PERS)
Eligibility with the California Public Employees' Retirement System (CalPERS) for retirement membership is based on full-time employment for more than six months or half-time employment for more than one year. Lecturers qualify for CalPERS retirement at the beginning of their third consecutive semester at half-time or greater. Membership is mandatory once an employee qualifies.
CalPERS, a defined benefit plan, is the largest pension fund in this country and third largest in the world. As a CalPERS member under this formula (State Miscellaneous 2% at Age 55), which is applicable to all employees except Public Safety Officers (see Public Safety Officers' section below), an employee contributes 5% of their monthly gross pay that exceeds $513, on a pre-tax basis to their retirement account. The amount of an employee's contributions, and the interest earned, is shown on their CalPERS Annual Member Statement. The California State University, as an employer, contributes a substantial amount each month on the employee's behalf. The employer contribution amount is not shown on the employee's statement as it is placed in a separate account. CalPERS uses the employee's contributions and those of the employer, as well as income from investments, to pay for the employee's life-time retirement benefits.
Upon permanent separation from CalPERS covered employment, the employee may withdraw their CalPERS contributions, plus interest earned through the preceding June 30. Or the employee may rollover all or any portion of the taxable amount to an IRA or qualified defined contribution plan that accepts rollovers. To withdraw or rollover CalPERS contributions, the employee must complete and submit a Separation/Disposition of CalPERS Contributions (STD. 687) form, available at the Payroll & Benefits Office or a CalPERS field office. Your contributions will be subject to taxation (and if you are under 59-1/2 years of age, they are subject to a 10% Federal income tax penalty).
Note: With the exception of Public Safety Officers (see Public Safety Officers notation below) and a few employees who have been in the CSU's employ since prior to 1961 and opted out of Social Security, it is mandatory for employees contributing to CalPERS to also contribute to Social Security. CalPERS benefits are coordinated with Social Security.
Employees are eligible for service retirement at age 50 or older with five or more years of full-time equivalent CalPERS service credit.
There are some exceptions to the five-year requirement. If an employee wishes to retire and is age 50 or greater with less than five years of service credit, they should contact a CalPERS field office to find out if an exception will apply.
Also, if an employee has at least five years of CalPERS service credit and becomes disabled for more than six months they may qualify for disability retirement through CalPERS, even if the employee has not yet attained age 50.
Pre-Retirement Death Benefit
If an employee should die prior to retirement, a death benefit of $5,000 group term life insurance plus six months salary and the return of employee contributions, plus interest, will be provided to the designated beneficiary. If the employee is eligible to retire at the time of death, other optional benefits may apply.
Beneficiary
CalPERS has established beneficiaries who are automatically designated to receive benefits in the event of the employee's death. Automatic beneficiaries are:
- Surviving spouse (whether or not you were living together at the time of your death); or, if none,
- Natural and adopted children (including natural child adopted by another), share and share alike; or, if none,
- Parents, share and share alike; or, if none,
- Brothers and sisters, share and share alike; or, if none,
- Your estate (if probated, or subject to probate), or, if not,
- Your trust (if one exists), or if not,
- Stepchildren, share and share alike; or , if none,
- Grandchildren, including step-grandchildren, share and share alike; or, if none,
- Nieces and nephews, share and share alike; or, if none,
- Great-grandchildren, share and share alike; or, if none,
- Cousins, share and share alike.
If you wish to designate beneficiaries other than the statutory beneficiaries shown above, or in a different order, you may do so any time prior to retirement by completing State Form 241, available at the Payroll & Benefits Office or a CalPERS field office.
Application for Retirement
To officially retire from CalPERS, a Retirement Service Application (form PERS-BEN-369S) must be completed and submitted to CalPERS at least 90 days prior to the intended retirement date. Applications are available at the Payroll & Benefits Office or a CalPERS field office. Upon receipt of the application, CalPERS will send you an Election Document (form PERS-BEN-898), with which an election of benefit settlement option is to be made. If you are not sure if you are ready to retire schedule an appointment with the University's Benefits Coordinator or visit the CalPERS Retirement Planning page.
Benefit Settlement Options
At retirement, you can choose to receive the Unmodified Allowance, the highest amount payable and provides a monthly benefit to you that ends upon your death, or you can take a reduction to that allowance and choose one of six other options. Each option provides a benefit to your named beneficiary after your death. Option 1 provides a lump-sum payment of your remaining contributions. Option 2, 2W, 3, 3W, or 4 provides a monthly allowance.
The Unmodified Allowance formula is: Years of Service x Age Factor x Final Compensation
Accumulated sick leave may impact retirement benefits since any unused sick leave will be converted to additional service credit on a percent basis; 2,000 hours equal one year of service credit.
Health and dental coverage are continued, including the State's contribution to these plans if you retire within 120 days following a separation from PERS covered employment.
Coordinating Work Plans
Pre-Retirement Reduction in Time Base (PRTB) allows academic employees including Student Services Professionals, Counselors, and Librarians to phase into actual retirement through reduction in timebase to an average of two-thirds, one-half, or one-third of full time while maintaining full retirement and other benefits for a maximum of five years.
Faculty Early Retirement Program (FERP) allows tenured faculty members who are eligible for service retirement to elect service retirement and teach one term each succeeding academic year for a prescribed amount of time.
Post Retirement Program allows a retired person to return to work as a retired annuitant provided the appointment does not exceed a total of 960 hours in any calendar or fiscal year. Academic appointments may not exceed 960 hours or 50% of the hours the member was employed during the year prior to retirement.
Other Information
Other information including Social Security, retirement cost-of-living adjustments, temporary annuity, taxes and restoring past service (buy back) may be important considerations. For more detailed information regarding CalPERS retirement benefits, visit the CalPERS web site, contact a CalPERS field office, or schedule an appointment with the University's Benefits Coordinator at (562) 985-8266.
Public Safety Officers
CalPERS provides a separate formula for Public Safety Officers (State Peace Officer/Firefighter, 3% at Age 55). For Public Safety Officers (Bargaining Unit 8 employees) the CSU currently contributes 100% of the employee's contribution to CalPERS. For Management Personnel Plan (MPP) Public Safety Officers, the employee contributes 8% of their monthly earnings in excess of $238.00. Additionally, Public Safety Officers, including MPP Public Safety Officers, do not contribute to Social Security.
For more information visit the CalPERS website