Question 1

What is the difference between School and State formulas?

Accepted Answer

School formulas apply to employees of K-12 school districts, community college districts, and county offices of education who are members of CalPERS. State formulas apply to state government employees. The benefit factors and retirement age ranges may differ between categories.

Question 2

Is there a PEPRA compensation cap?

Accepted Answer

Yes. PEPRA limits the compensation used to calculate your pension. For 2024, the cap is $146,064 for members covered by Social Security and $175,250 for those not covered. The cap is adjusted annually based on CPI. Compensation above the cap does not increase your pension benefit.

Question 3

What is final compensation?

Accepted Answer

Final compensation is the average of your highest salary over a specific period, typically your highest 12 or 36 consecutive months depending on your formula. PEPRA members use a 36-month average; classic members typically use a 12-month average.

Question 4

Does the day I retire affect my first COLA?

Accepted Answer

Yes. CalPERS pays the annual COLA each May based on retirees with at least one full year of retirement. Retiring before April 1 generally qualifies you for the next May's COLA payment; retiring after April 1 means waiting an extra year. This single timing choice can shift your first COLA by 12 months.

Question 5

Does the PEPRA salary cap affect my pension?

Accepted Answer

Yes, if your final compensation exceeds the cap. PEPRA limits the compensation used in the pension formula to a published annual cap that is adjusted yearly. Compensation above the cap does not increase your pension benefit, regardless of years of service. Classic formulas do not have this cap, though their compensation is subject to IRS Section 401(a)(17) limits.

CalPERS 2% at 55 Retirement Calculator

CalPERS 2% at 55 — Frequently Asked Questions

More CalPERS Retirement Calculators