CalPERS Retirement System

The California Public Employees Retirement System (CalPERS) is the defined benefit retirement system in which CSU Monterey Bay participates. CalPERS is coordinated with Social Security and membership is mandatory for those persons employed full time for more than six months or part-time (50 percent or more) for one year. Active CalPERS members who are hired at CSUMB automatically contribute to CalPERS regardless of the nature of their employment. Temporary faculty are required to enter CalPERS membership commencing with the third consecutive semester of appointment at half time or more.

CalPERS is considered one of the biggest and most stable pension funds in the country. CSU employees are generally covered by the CalPERS state, first tier, 2 % @ 55 program. Public safety officers are generally covered by the 3 % @ 55 program. Based on your actual hire date, you may be covered under a different retirement formula than stated above. For additional information please reference the chart below or contact University Personnel/Benefits.

Working after Retirement for a CalPERS Covered Employer 

Recent information from CalPERS, and rules from the IRS, provide the following guidelines for employees who retire before the normal retirement age (55) and return to work. CalPERS recommends the following to comply with the federal requirements for retiring members and employers:

Prior to a member's service retirement, there can be no agreement to render service after retirement (either verbal or written) by members who retire before reaching their normal retirement age, regardless of the length of the separation. A member/retiree who has not reached their normal retirement age must have a separation from service prior to returning to CalPERS-covered employment.

Normal retirement is taken to mean the age specified in the retirement formula, e.g., age 55 years for the "2%@55" formula. Please refer to HR 2008-23

Service Retirement Eligibility 

Employees must be at least age 50 and have five (5) years of service credit to apply for service retirement.

Three factors are used to calculate retirement allowance:

  • Service credit
  • Benefit factor based on age at retirement
  • Final contribution (or highest 12 month average salary, if different)

Service Credit 

CalPERS members earn service credit for each year or partial year they work for a CalPERS-covered employer. It accumulates on a fiscal year basis, July 1 through June 30, and is one of the factors used to calculate your future retirement benefits.

In some cases, you may be able to purchase additional service credit that can help you maximize your retirement benefits. First, you should check your latest Annual Member Statement against your own employment records. Look for times you might have, for example, withdrawn your CalPERS contributions, were in the military, took a leave or break in employment, etc. Then review the Service Credit Purchase Options information to see if you may be eligible for any of the available options.

View Service Credit Purchase Online 

CalPERS is pleased to announce that it is now easier than ever for members to view their service credit purchase request status using My CalPERS.

My CalPERS online service lets members:

  • View the date CalPERS received the member's service credit purchase request
  • View the service credit purchase type
  • View the date CalPERS mailed service credit information to the applicant
  • View the date CalPERS received the member's formal service credit purchase election
  • View the service credit processing status

Before using this service, CalPERS members must first obtain a User ID and Password by registering on the My CalPERS website at www.calpers.ca.gov. Members who already have a User ID and Password can begin using the online service immediately.

For further assistance, please call CalPERS toll free at 888 CalPERS (or 888-225-7377), Monday through Friday, 8:00 a.m. to 5:00 p.m.

Vesting

As a CSU employee, if you are a CalPERS member, you can become vested after five years of full-time equivalent service with the CSU. Vested members are eligible for service retirement as early as age 50. To be eligible for lifetime medical and dental benefits, employees must meet the CSU vesting requirements and retire within 120 days of their separation date with the CSU.

CalPERS vesting requirements vary for each CalPERS employer. The employer you retire with determines the vesting requirements you are subject to, regardless if you are considered vested by CSU standards. For example, should you be vested with the CSU and resign, yet prior to retirement regain CSU employment, you would still be considered vested by CSU standards and would be eligible for CSU service retirement benefits.

Vesting eligibility can vary for each individual, as there are many factors involved. It is recommended that you contact HR for specific information as it relates to your situation.

Contributions 

The employee's monthly contribution is 5 percent of gross salary, less an exclusion allowance for coordination with Social Security. Employer contributions vary annually. Employee contributions are made on a pre-tax basis.

CalPERS uses the contributions of the employee and the employer as well as income from investments to pay for employee benefits. Interest is credited to contributions annually as of June 30. Statements are sent to each member in October.

In the event that you leave CalPERS-covered employment, you can do the following with the employee portion only:

  • Elect a refund of your contributions. A refund terminates your memberships in CalPERS. If you later return to CalPERS- covered employment you can buy back the service credit by returning your withdrawn contributions plus interest.
  • Leave your funds in CalPERS and withdraw at a later date if you are not a vested member
  • Request a rollover to an Individual Retirement Account (IRA)

Application for Retirement 

Employees wishing to apply for service retirement should contact CalPERS directly and/or HR for assistance. To ensure timely processing, the application should be submitted to CalPERS 90 days before your retirement date. Your effective retirement date cannot be earlier than the first of the month in which your application is received. CalPERS publishes retirement brochures and offers retirement and financial planning seminars locally on a regular basis, which employees contemplating retirement are strongly encouraged to attend.

Employees thinking about retirement are also encouraged to notify University Personnel/Benefits at (831) 582-4426 and set up a meeting to review the retirement process and receive important benefit continuance information.

To find out more, please visit the CalPERS website at: http://www.calpers.ca.gov/ or call CalPERS at (888) 225-7377.

Unused Sick Leave 

The CSU contract provides for conversion of unused sick leave to additional service years on a percent basis. One year of service is equivalent to 250 full-time days or each unused sick leave day is equivalent to .004 of a fiscal year.

Benefit Settlement Options 

At retirement, the highest allowance (called the Unmodified Allowance) may be chosen or an employee may take a reduction and choose one of six other optional settlements, which may provide a beneficiary a lifetime benefit.

Please review the CalPERS Service Retirement Election Application booklet for information about each retirement option available.

Benefits after Retirement 

If you are eligible to retire, you will receive the full state contribution for medical premiums for you and your spouse (enrolled dependents up to age 26) for as long as you live if you meet the following requirements:

  • Retire within 120 days of separation from CSU employment and draw a lifetime monthly benefit.
  • Member must be enrolled under his/her own name or as a dependent under the spouse's CalPERS health and dental plan at the time of separation. (Individuals participating in a "Flex" program are considered enrolled in the CalPERS Health Program.)

CSU currently pays for retiree Dental premiums consistent with the above criteria.

CSU Retiree Vision Plan 

SB 235, the CSU Retiree Vision bill, was signed into law by the governor. As a result, the Chancellor's Office has developed the vision plan that will be offered to eligible CSU retirees. This vision plan will be retiree paid, is a 12-month commitment, and benefits will mirror the active employee plan we have with VSP.

To enroll in the VSP Retiree Vision Plan, please complete the VSP Retiree Vision Enrollment form below and mail it directly to VSP's address on the form.

For more information, please call VSP at 1-800-877-7195.

Other CalPERS Programs

 Pre-Retirement Death Benefit 

If an active CalPERS member dies before he/she is eligible for 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 member is eligible to retire at the time of death, other optional benefits may apply.

Beneficiaries: CalPERS has established beneficiaries that are automatically designated to receive benefits in the event of the employee's death.

Disability Retirement 

You may apply for disability retirement benefits if you become disabled and cannot work. Five years of service credit with CalPERS is necessary, but there is no minimum age requirement.

Emergency Retirement 

CalPERS will expedite retirement processing for those who are terminally ill or facing imminent death. Contact CalPERS or HR immediately if there is a need for emergency retirement.

Reciprocity 

CalPERS has established agreements with many public retirement systems that allow movement from public employer to public employer within a specified time limit without losing valuable retirement and related benefit rights. This is called "reciprocity."

There is no transfer of funds or service credit between retirement systems when you establish reciprocity. You become a member of both systems and are subject to the membership and benefit obligations and rights of each system (for example, minimum retirement age), except as modified by the reciprocity agreement.

Upon retirement, separate retirement allowances are received from each system, and you must apply to retire from each system separately. You must retire on the same date from all public retirement systems participating in a reciprocal agreement for all benefits of reciprocity to apply.

CalPERS has an agreement with the State Teachers' Retirement System, Judges' Retirement System, and Legislators' Retirement Systems that provides similar benefits, although there is no reciprocity between the systems. For more information regarding benefits arising from movement to a non-reciprocal retirement system contact HR.