How does a CalPERS pension work? A complete guide for members near retirement
Classic and PEPRA members, retirement formulas, age factors, final compensation, COLA, survivor options, health benefits and how to apply.
A CalPERS pension is service credit × benefit factor × final compensation. Your benefit factor depends on your formula and your age at retirement. Most state miscellaneous members hired on or after January 1, 2013 (PEPRA members) are on 2% at 62, which pays 2.0% per year of service at 62 and up to 2.5% at 67. You need at least 5 years of service, and the earliest age is 50 or 52 depending on when you joined.
Classic or PEPRA: which are you?
CalPERS (the California Public Employees' Retirement System) covers state workers, employees of cities, counties and special districts that contract with CalPERS (called public agencies), and school classified staff such as office workers, bus drivers and custodians. Teachers are usually in CalSTRS instead (see our CalSTRS guide).
The Public Employees' Pension Reform Act of 2013, called PEPRA, split members into two groups:
- PEPRA (new) members: people who first joined CalPERS on or after January 1, 2013, with no earlier California public retirement membership, or who had earlier membership but are not covered by reciprocity. A pre-2013 member who goes to a different CalPERS employer on or after January 1, 2013, after a break in service of more than six months, also becomes a PEPRA member.
- Classic members: everyone else. Classic members keep their existing benefit levels for future service with the same employer.
Reciprocity is an agreement between CalPERS and certain other California systems that can let you keep classic status. Source: CalPERS: Summary of PEPRA.
To vest (earn the right to a pension), you need at least 5 years of CalPERS service credit, or 10 years for State Second Tier members. The earliest retirement age is 50 for classic members and local safety members, and 52 for PEPRA miscellaneous members. People with both classic and PEPRA service may be able to retire at 50 (CalPERS: Planning Your Service Retirement).
The pension formula
service credit × benefit factor × final compensation = yearly pension
- Service credit is the years (and partial years) you worked in a CalPERS job. Unused sick leave can add to it if you retire within 120 days of leaving your job: CalPERS divides your hours by 8 to get days, then multiplies the days by 0.004. For example, 250 hours is 31.25 days, which adds 0.125 years.
- Benefit factor is the percentage you earn for each year of service. It comes from your retirement formula and your age on the day you retire, measured in quarter years.
- Final compensation is your highest average yearly pay over a 12-month or 36-month stretch in a row. Which period you get depends on your membership date and, for public agencies, your employer's contract. PEPRA members always use at least 36 consecutive months. Classic and PEPRA service each get their own final compensation, and pay from one can't be used for the other.
A formula's name, such as "2% at 55," gives the factor at a key age: 2.0% per year of service at 55. It is lower if you retire younger and, on most miscellaneous formulas, rises to a cap if you retire older.
Common formulas
| Group | Classic formulas | PEPRA formula |
|---|---|---|
| State miscellaneous | 2% at 55 or 2% at 60 (Second Tier: 1.25% at 65) | 2% at 62 (Second Tier: 1.25% at 67) |
| Local miscellaneous | By contract: 2% at 55, 2% at 60, 2.5% at 55, 2.7% at 55, 3% at 60 and others | 2% at 62 |
| School classified | 2% at 55 | 2% at 62 |
| Safety (police, fire and others) | Varies, for example 3% at 50 or 3% at 55 | 2% at 57, 2.5% at 57 or 2.7% at 57 |
Sources: CalPERS: Benefit Factor Charts and CalPERS: Summary of PEPRA. Local formulas are set in each employer's CalPERS contract. Your Annual Member Statement and myCalPERS show yours.
The PEPRA pay cap
PEPRA members can't count pay above a yearly limit toward final compensation. For 2026, the limit is $159,733 if your job is also covered by Social Security and $191,679 if it isn't. Classic members are subject to the federal limit, which is $360,000 for 2026 (CalPERS: 2026 Compensation Limits). The limits change each year with inflation.
Age factor tables
Benefit factors at whole-year ages for the two most common miscellaneous formulas. CalPERS also publishes quarter-year steps.
| Age at retirement | PEPRA 2% at 62 | Classic 2% at 55 |
|---|---|---|
| 50 | Not eligible | 1.100% |
| 52 | 1.000% | 1.460% |
| 55 | 1.300% | 2.000% |
| 57 | 1.500% | 2.126% |
| 60 | 1.800% | 2.314% |
| 62 | 2.000% | 2.438% |
| 63 | 2.100% | 2.500% (cap) |
| 65 | 2.300% | 2.500% |
| 67 or older | 2.500% (cap) | 2.500% |
Sources: CalPERS: 2% at 62 benefit factors and CalPERS: 2% at 55 benefit factors (state miscellaneous charts). PEPRA 2% at 62 rises 0.1 point a year from 52 to 67.
Safety formulas peak earlier: PEPRA 2.7% at 57 starts at 2.0% at 50 and reaches 2.7% at 57 (CalPERS: State Safety 2.7% at 57).
A worked example
Maria is a made-up state miscellaneous PEPRA member. She was hired in 2013, so she'll have 25 years of service credit at 62. Her highest 36 months in a row average $72,000 a year, which is $6,000 a month.
- Benefit factor at 62 on 2% at 62: 2.0%.
- 2.0% × 25 years = 50% of final compensation.
- 50% × $6,000 = $3,000 a month, before any survivor option, taxes or health premiums.
- If her job is also covered by Social Security, CalPERS may first reduce final compensation by a one-time offset of $133.33: $5,866.67 × 50% = $2,933.33 a month. Her official estimate will show whether this applies.
- Compare other ages, using $3,000 as the base: at 60 she would have 23 years and a 1.8% factor (41.4%, or $2,484). At 65 she would have 28 years and a 2.3% factor (64.4%, or $3,864).
Working longer helps twice: more years and a higher factor.
Yearly cost-of-living raises
CalPERS raises pensions each year with a cost-of-living adjustment (COLA), paid on the May 1 check. Your first COLA comes in the second calendar year after you retire. For example, a member retiring December 31, 2025, is first eligible May 1, 2027, while one retiring January 1, 2026, waits until May 1, 2028 (CalPERS: Planning Your Service Retirement).
- State First Tier and school members: up to 2% a year, compounded.
- State Second Tier: a fixed 3%.
- Public agency members: a contract maximum of 2%, 3%, 4% or 5%, so ask your former employer.
Each year CalPERS uses the lower of inflation or your COLA rate, compounded on your starting allowance (CalPERS PERSpective: About Your COLA and Inflation). When inflation has outpaced the COLA for years, a separate Purchasing Power Protection Allowance (PPPA) can add a payment to keep benefits from falling below a set share of their original buying power (CalPERS: Cost-of-Living Adjustment).
Survivor options
When you apply, you pick how your pension is paid. Every option except Unmodified lowers your check so someone else can receive money after you die; the cut depends on your age and your beneficiary's age.
| Option | What happens after you die |
|---|---|
| Unmodified | Highest check. Payments stop at your death, and unused contributions aren't returned. |
| Option 1 | Any remaining contributions are paid as a lump sum to your beneficiaries. No monthly benefit. |
| Option 2 | One beneficiary gets 100% of the option amount for life. |
| Option 2W | Like Option 2, but your check rises to the Unmodified amount if your beneficiary dies first. |
| Option 3 | One beneficiary gets 50% of the option amount for life. |
| Option 3W | Like Option 3, with the same rise to Unmodified if your beneficiary dies first. |
| Option 4 | You name one or more beneficiaries and set a dollar amount or percentage for each. |
Some employers also contract for a 25% or 50% survivor continuance, which a spouse can receive on top of the option you pick. You have 30 days after your first retirement check is issued to change your option, beneficiary or retirement date (CalPERS: Planning Your Service Retirement).
Health benefits in retirement
CalPERS runs health plans for the state and for many public agencies and schools. To keep CalPERS health coverage into retirement, you generally must be eligible for coverage when you leave, retire from an employer that contracts with CalPERS for health benefits, receive a monthly CalPERS pension, and retire within 120 days of leaving your job.
How much the employer pays depends on vesting rules, which are separate from pension vesting. Most state employees are on a 20-year or 25-year schedule:
| State service | 20-year schedule | 25-year schedule |
|---|---|---|
| Under 10 years | 0% | 0% |
| 10 years | 50% | 0% |
| 15 years | 75% | 50% |
| 20 years | 100% | 75% |
| 25 years | 100% | 100% |
The share rises 5% for each year past the first partly-vested year. Which schedule you're on depends on your first hire date and bargaining unit. Public agencies and schools set their own contributions and vesting in their agreements with CalPERS, so ask your employer (CalPERS PERSpective: Health Vesting 101).
At 65: if you qualify for premium-free Medicare Part A, CalPERS requires you to enroll in Medicare Parts A and B and move to a CalPERS Medicare plan. If you don't, your CalPERS coverage is canceled the first day of the month after you turn 65 (CalPERS: Medicare for retirees). If you retire before 65, see health insurance before Medicare.
Social Security and CalPERS
Your CalPERS pension and Social Security are separate. You don't need to be Social Security age to collect your pension. Whether you also earn Social Security depends on your job: state miscellaneous and industrial members pay into Social Security, while state safety, peace officer and firefighter, and Highway Patrol members don't (CalPERS: State Reference Guide). For public agencies, it depends on the employer. Your pay stub shows whether Social Security tax is withheld.
Until recently, a pension from a job without Social Security could cut your Social Security through two rules: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). The Social Security Fairness Act, signed January 5, 2025, ended both for benefits payable for January 2024 and later. If you never applied because of WEP or GPO, you may need to apply now (SSA: Social Security Fairness Act). More detail is in Does a pension reduce Social Security?
How to apply
You can apply up to 120 days before your retirement date, online in myCalPERS, by mail with a notarized application, or at a CalPERS Regional Office. Apply within nine months of leaving your job to keep the retirement date you want; after that, the earliest date is the first of the month CalPERS receives your application. You must stop working for every CalPERS employer before your retirement date, and your first check usually comes within 45 days (CalPERS: Planning Your Service Retirement).
What to do next
- Confirm your formula. Check your Annual Member Statement or myCalPERS for your formula, service credit and whether you are classic or PEPRA.
- Run an official estimate. Use the estimate calculator in myCalPERS at two or three retirement dates, with and without a survivor option.
- Check health vesting. State and CSU members can see it under the Health tab in myCalPERS. Others should ask their employer.
- Get your Social Security estimate. Sign in to my Social Security at ssa.gov to see how it fits with your pension.
- Apply on time. Submit your application within the 120-day window and line up your health enrollment.
Our countdown checklist lists each step from three years out to Medicare at 65, so nothing in your CalPERS application gets missed.
Open the retirement checklistCommon questions
What is the earliest I can retire from CalPERS?
Age 50 for classic and safety members, and 52 for PEPRA miscellaneous members, with at least 5 years of service.
Is final compensation 12 months or 36 months?
PEPRA members use at least 36 consecutive months. Classic members use 12 or 36 months depending on membership date and, for public agencies, the employer's contract.
How much is the CalPERS COLA?
Up to 2% a year, compounded, for state First Tier and school members, starting in the second calendar year after retirement. Public agency contracts can allow up to 3%, 4% or 5%, and the raise never exceeds inflation.
Will my CalPERS pension reduce my Social Security?
Not anymore. The Social Security Fairness Act ended WEP and GPO for benefits payable from January 2024. Your Social Security is still based only on work where Social Security tax was paid.
General information, not advice. We aren't part of CalPERS. For an official estimate of your pension and health benefits, use myCalPERS or call CalPERS at 888-225-7377.