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 mailed to the CalPERS address at the bottom of page 8 of the application.
- Application Resources: Regional Offices
Prefunding Of Postretirement Health Benefits
The State and Bargaining Unit 10 hereby agree to share in the responsibility toward the prefunding of post- retirement health benefits for members of Bargaining Unit 10 and agree that the foregoing concepts will be implemented as a means to begin to offset the future financial liability for health benefits for retired members.
A. Beginning July 1, 2017, the State and Bargaining Unit 10 will prefund retiree healthcare with the goal of reaching a 50 percent cost sharing of actuarially determined total normal costs for both employer and employees by July 1, 2019. The amount of employee and matching employer contributions required to prefund retiree healthcare shall increase by the following percentages of pensionable compensation
1. July 1, 2017: by 0.7 percent,
2. July 1, 2018: by 0.7 percent, for a total of 1.4 percent,
3. July 1, 2019: by 1.4 percent, for a total of 2.8 percent.
C. Employees Subject to Other Post Employment Benefit Prefunding
Bargaining unit members not subject to OPEB prefunding shall begin contributing upon attaining eligibility for health benefits. New hires and employees transferring into Bargaining Unit 10 shall begin contributing immediately, unless they are not subject, as set forth above.
D. Withholding of Contributions
When Can You Retire
Now that weve discussed how much money you can get in retirement, lets talk about when you can retire. You need 5 or more years of service to qualify for a retirement with PERS Plan 2. Full retirement age is 65. You can also choose to retire as early as age 55, but your benefit could be reduced depending on your total years of service.
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Factors To Consider If Youre Thinking Of Retiring Early
Ultimately, choosing your retirement age depends on your personal needs and circumstances. Before deciding, make sure you have the financial resources you need to make the most of this new stage of life. View our Planning Your Financial Future series on YouTube to help you prepare.
Do You Already Qualify For Retirement
If you are vested in your plan and qualify to retire, there is no financial benefit to taking disability vs retirement, even for early retirement. The income you receive for either retirement uses the same calculations. Early or full retirement is also a much faster process than disability retirement.
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How To Apply For A Disability Retirement
Once DRS receives the completed application and all supporting documentation, it usually takes about four to six weeks to determine your eligibility for a disability retirement.
The full application process averages 4-5 months from the time you request the estimate, but the timing can vary. Providing all requested documentation along with a complete application can help reduce the wait time.
If the disability retirement is approved, your retirement date would be the first of the month after your separation date. DRS would issue your monthly benefit payments on the last business day of the following month and every month after.
Death Of A Retired Member
Please contact DRS as soon as possible. If the retiree chose a survivor benefit, we must update the account for payments to continue. If the retiree did not select a survivor option, we need to stop monthly benefits to avoid an overpayment. When you contact us, please be ready to provide the deceased retirees full name, Social Security number and date of death.
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Calpers 2 Percents At 55 Chart
Calpers 2 Percents At 55 Chart. For example, if you wait to. View your retirement benefit formula chart in this publication: The chart below shows how the benefit factor increases for each quarter year. Calculate the percentage of a number.
Exact year ¼ year ½ year. Minimum age for retirement 50. The maximum percentage you can receive is 90%.
Percent of calculate a percentage. Divided by use this calculator to find percentages.
You get 60% of your highest year base salary as your pension. Using the 3% at 55 retirement formula , we review the chart on page 46 of his benefits breakdown to see that his chart maxes out at 90% of final compensation.
Minimum age for retirement 50. $6,000 x 30 x 2% = $3,600 a month.
You start at 25 years old and work until 55 years old. Retirement formulas and benefit factors 2 percent at 55. The chart below shows how the benefit factor increases for each quarter year of age from 50 to 55.
You get 60% of your highest year base salary as your pension. The chart below shows how the benefit factor increases for each quarter year of age from 50 to 55. Reading the retirement formula charts.
For example, if you wait to. The chart on the next page shows the percentage of final compensation you will receive. 30 times 2% equals 60%.
What is 2 percent of 55? Be greater than the amount provided by option 2w and is subjectto calpers approval. Some calpers employers also do an average of your highest 3 years instead of your highest year.
How Your Retirement Benefit Is Calculated
Three factors are multiplied together to calculate your service retirement:
- 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 . 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 , the pay rate used for final compensation calculation would be $4,000.
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Calpers Retirement: Vesting Requirement For Health/dental Benefits
In order to qualify for health/dental in retirement, you must retire from a benefit eligible position within 120 days of separation from the CSU AND meet either the five year or ten year vesting requirement. .
- Retirees pay the same health contribution as active CSU employees.
- Dental Retiree plan premium is paid by CalPERS.
- The vision benefit can be continued at the retiree’s expense.
In addition, benefits are provided for disability, death, and to survivors or beneficiaries of eligible members. Exception to Ten Year Vesting Requirement: Disabled employees would receive the full state health contribution if they separate and retire with a disability retirement within 120 days from a benefits eligible appointment.
Is An Annuity Right For Me
Annuities can provide guaranteed income for your life. And they offer security through a set monthly income which can increase annually if you are eligible for a Cost-of-Living Adjustment . However, flexibility is not a feature of annuities. Once you set it up, an annuity doesnt allow you to change the income amount. Once you begin receiving monthly payments, you cannot cancel the annuity.
With annuities, you take money out of market risk and use it to give yourself a monthly lifetime income. Annuities are the only investment withdrawal option that guarantee you will not outlive your account balance.
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Find Your Benefit Factor Chart
Once you know your retirement formula, go to our Benefit Factor Charts webpage to select the chart for your formula . Youll see how your benefit factor increases for each quarter year of age, and the percentage of final compensation you will receive. If you have multiple retirement formulas from different employers, read Planning Your Service Retirement to see calculation examples with multiple formulas.
Have You Checked Your Benefit Factor Chart
No matter where you are in your career, its never too early to plan for retirement by reviewing your CalPERS benefit factor chart to see your potential percentage of pay in retirement.
Lets start with some definitions:
- Benefit factor: This is the percentage of pay you are entitled to receive for each year of CalPERS-covered service. Its determined by your age at retirement and your retirement formula.
- Retirement formula: Your retirement formula is determined by your employers contract with CalPERS . Your retirement formula and your age determine what benefit factor is used to calculate your retirement benefit.
- Final compensation: This is the highest average annual compensation you earned for a 12-month or 36-month consecutive period of employment, depending on your employers contract.
Heres an example calculation:
Carla is retiring at age 55 under the state miscellaneous 2% at 55 formula with 25 years of service credit. Her final compensation average is $4,500 a month.
To estimate her pension amount, Carla multiples her years of service credit by the benefit factor. Then she multiples that result by her final compensation amount:
- 25 years × 2% benefit factor = 50%
- 50% × $4,500 final compensation = $2,250 unmodified allowance
- Note: The unmodified allowance is the highest amount payable when you retire.
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Your Retirement Age Affects Your Retirement Benefit
Your benefit factor, the percentage of pay to which you are entitled to for each year of service, is also commonly known as age factor. Its determined by your age at retirement along with your employer-contracted retirement formula based on your membership date.
Delay the age you retire, and youll increase your overall retirement benefit.
The minimum service retirement age for most members is 50 or 52 with five years of service credit. Once you reach your eligible retirement age, your benefit factor increases every birthday quarter, or every three months from your birthday, up to the maximum age determined by your retirement formula. For example, if your birthday is March 10, your birthday quarters are:
- Birthday March 10
| 2.032% | 2.048% |
To find your benefit factor for each quarter year of age, view your benefit factor chart.
Are you still unsure of your earliest retirement age or CalPERS benefit factor? Find information on the home page of your myCalPERS account or check with your employer.
When Do You Get Paid
Your pension money will be direct deposited into your bank account on the last business day of the month, every month, for the rest of your life. The retirement application has a section for your bank information so your funds will be deposited. Once youve retired, you can make any updates to your direct deposit through your online account.
See live or recorded retirement planning webinars.
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What Is An Annuity
Annuities are lifetime income plans you purchase.
When its time to retire, you have some additional optionsoptions that can change your finite savings into a monthly, lifetime income called an annuity. An annuity is a guaranteed income plan you purchase. The monthly payments you receive are based on the dollar amount you choose to purchase. The annuity will provide monthly payments for your lifetime. The annuities DRS offers are administered by Washington state with investments provided by the Washington State Investment Board.
How Much Does Your Retirement Age Matter
The key to maximizing your retirement benefit is to understand how your age, service credit, and final compensation are used to determine your monthly pension benefit. Once you retire, your benefit is payable to you for life.
Your retirement benefit is calculated using a formula with three factors: service credit, benefit factor, and final monthly compensation.
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Employer Contribution For Retiree Health Benefits
This section shall apply to all employees in Unit 10 first employed by the State on or after January 1, 2016.
A. The employer contribution for each annuitant enrolled in a basic plan shall not exceed 80 percent of the weighted average of the Basic health benefit plan premiums for an employee or annuitant enrolled for self-alone, during the benefit year to which the formula is applied. For each employee or annuitant with enrolled family members, the employer contribution shall not exceed 80 percent of the weighted average of the additional premiums required for enrollment of those family members, during the benefit year to which the formula is applied.
2. This section shall apply to all employees first hired on or after January 1, 2016.
3. This section shall apply to all employees and annuitants first hired on or after January 1, 2016.
D. This section does not apply to:
E. The parties agree to support any legislation necessary to facilitate and implement this provision.
Tax Treatment Of Employee Retirement Contributions
In accordance with that Executive Order and with Internal Revenue Service guidance under Revenue Ruling 2006-43, this formalizes the implementation of section 414 with regard to Employee Contributions to CalPERS that are made by the Employer on behalf of its employees. For this purpose, Employee Contributions means those contributions that are deducted from employees salary and credited to individual employees accounts under CalPERS. This Article specifically covers Employee Contributions made on behalf of employees covered by the collective bargaining agreement to which the Article relates.
A. Pick up of Employee Contributions
In accordance with section 414 of the Internal Revenue Code, the Employer may pick up the Employee Contributions under the following terms and conditions:
- The contributions made by the Employer to CalPERS, although designated as Employee Contributions, are being paid by the Employer in lieu of contributions by the employees who are members of CalPERS
- Employees do not have the option of choosing to receive the contributed amounts directly instead of having them paid by the Employer to CalPERS
- The Employer is paying to CalPERS the contributions designated as Employee Contributions from the same source of funds as used in paying salary and
- The amount of the contributions designated as Employee Contributions and paid by the Employer to CalPERS on behalf of an employee is the entire contribution required of the employee under CalPERS.
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Public Employees Pension Reform Act Of 2013
A. PEPRA Definition of Pensionable Compensation
Retirement benefit for employees subject to PEPRA are based upon the highest average pensionable compensation during a thirty-six month period. Pensionable compensation shall not exceed the applicable percentage of the contribution and benefit base specified in Title 42 of the United States Code Section 430 . The 2013 limits are $113,700.00 for members subject to Social Security and $136,440.00 for members not subject to Social Security. The limit shall be adjusted annually based on changes to the Consumer Price Index for all Urban Consumers.
B. Alternate Retirement Program New Employees
Employees first hired on or after July 1, 2013 shall not be subject to the Alternate Retirement Program . Existing ARP members are required to complete the twenty-four month enrollment period. Upon completion of the twenty-four month period, the employee shall make contributions to CalPERS. ARP members shall continue to be eligible for payout options beginning the first day of the 47th month of employment and ending on the last day of the 49th month of employment following his or her initial ARP hire date.
C. Equal Sharing of Normal Cost
How Does Retiring Early Affect My Monthly Benefit
When you retire early, your monthly benefit amount is reduced to reflect that you will be receiving your pension payments for a longer period of time. The amount of the impact depends on the amount of service credit you have, the date you retire, your age and the early retirement factor used.
If you retire with between 20 and 30 years of service credit, your monthly benefit is reduced by a factor that is based on your average life expectancy. The reduction is greater than if you retire with at least 30 service credit years.
If you retire with at least 30 years of service credit, you can choose one of the following options:
- A 3% Early Retirement Factor reduction for each year before you turn age 65
- The 2008 ERF, which provides a smaller benefit reduction but imposes stricter return-to-work rules
Early retirement rules are different for members who are first hired on or after May 1, 2013. At age 55 with 30 years of service credit, your benefit is reduced by 5% for each year before you turn age 65.
The ERFs are subject to change based on State Actuary figures. The administrative factors used in this table are for illustrative purposes only.
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