The California Public Employees’ Retirement System covers state workers, school employees who are not teachers (classified staff such as aides, office workers and bus drivers), and the employees of hundreds of cities, counties and special districts. Each employer contracts for its own formula, so CalPERS has dozens of benefit formulas. This page focuses on the one most new members get: the PEPRA 2% at 62 formula for miscellaneous (non-safety) members hired in 2013 or later.
Classic or PEPRA
You are a PEPRA member if you were first hired by a CalPERS employer on or after January 1, 2013, and were not already a member of CalPERS or a reciprocal California system. Members hired before 2013, or who moved between reciprocal systems without a long break, are classic members and keep their employer’s older formula, such as 2% at 55 or 2.5% at 55. Your annual statement shows which you are.
The formula
Your yearly pension is the benefit factor for your age at retirement, times your years of service credit, times your final compensation. A PEPRA member retiring at 62 with 25 years and $80,000 final compensation gets 2% × 25 × $80,000 = $40,000 a year, or about $3,333 a month.
Benefit factor by age
The PEPRA factor starts at 1.0% at age 52 and rises by about 0.1% each year until it tops out at 2.5% at 67. CalPERS publishes it in quarter-year steps.
| Age | Factor | Age | Factor |
|---|---|---|---|
| 52 | 1.0% | 60 | 1.8% |
| 54 | 1.2% | 62 | 2.0% |
| 56 | 1.4% | 64 | 2.2% |
| 58 | 1.6% | 67 and up | 2.5% |
That slope makes timing powerful. Retiring at 57 instead of 62 cuts the factor from 2.0% to 1.5%, a quarter less for life before you even count the lost years of service. Waiting from 62 to 67 lifts it by a quarter.
Final compensation and the pay cap
PEPRA members use their highest average pay over 36 consecutive months. Only base pay counts. Overtime, bonuses and most special pay are excluded, and pensionable pay is capped each year, with a lower cap for jobs that also pay Social Security. Classic members may use 12 or 36 months depending on their employer’s contract.
Social Security
Most State of California workers pay into Social Security alongside CalPERS, so they retire with both. Many local agencies and some school districts do not participate. If your job did not pay into Social Security but you have covered work elsewhere, the Social Security Fairness Act now pays that benefit without the old WEP cut. The pension and Social Security calculator shows the total.
COLA
CalPERS raises pensions each May by up to 2% a year, compounded, based on inflation. Some employers contract for a higher cap of 3%, 4% or 5%. When inflation runs above your cap, the Purchasing Power Protection Allowance can add a supplemental payment to keep your benefit from falling too far below its original buying power.
Before you retire
CalPERS estimates use your actual service and pay history, and you can run them in myCalPERS. Use the pension estimate calculator to see how the age factor changes the number, then confirm with your official estimate before you set a date.