California Public Employee's Retirement System
The California Public Employees' Retirement System (CalPERS) is a defined benefit retirement plan. It provides benefits based on members' years of service, age, and final compensation. In addition, benefits are provided for disability death, and payments to survivors or beneficiaries of eligible members. The California State University (CSU) participates in the CalPERS program. Membership is mandatory for those CSU employees employed full-time for a period of six months or part-time for a period of one year in duration.
Members are eligible to retire at the age specified in their benefit formulas. CSU members become fully vested in their retirement benefits after five years of credited service. The following benefit formulas apply to eligible CSU employees in the listed employee groups:
| Eligible CSU Employee Group | Benefit Formula | Employee Contribution | Employer Contribution |
|---|---|---|---|
| Benefit Plan: Miscellaneous Tier 1 | |||
| MPP (M80) Executive (M98) Confidential (C99) Physicians (R01) Faculty (R03) CSUEU (R02, 05, 07, 09) Academic Professionals (R04) Skilled Crafts (R06) Skilled Trades (R10) |
2% @ 55 | 5% of monthly salary, less an exclusion allowance of $513.00 for coordination of Social Security. | Set annually by CalPERS |
| Benefit Plan: Peace Officer/Firefighter | |||
| Public Safety (R08) | 3% @ 50 | $0.00 | Set annually by CalPERS |
| Public Safety Management (M80) | 3% @ 50 | 8% of monthly salary, less an exclusion allowance of $238.00. | Set annually by CalPERS |
| Firefighters (R09) | 3% @ 55 | 8% of monthly salary, less an exclusion allowance of $238.00. | Set annually by CalPERS |
The benefit structure for state employees (including the CSU) is defined by statute. CalPERS uses contributions of the employer and the employee as well as income from investments to pay for employee retirement benefits. Employee and employer contributions are a percentage of applicable employee compensation. The employer contribution is set annually by CalPERS based on annual actuarial valuations. The employee contribution is 5% of salary for Miscellaneous Tier 1 members and 8% for Peace Officer/Firefighter members (Public Safety Management and Firefighters only) less an exclusion allowance for coordination with Social Security. For eligible CSU Public Safety (R08) employees, the CSU pays for both the employer and employee contributions (see Premiums/Rates for further details).
Internal Revenue Code (IRC) 401(a)(17) provides dollar limitations on benefits and contributions under qualified retirement plans, including the California Public Employees’ Retirement System (CalPERS). The 2007 calendar limit is $225,000. Employees who first became members of CalPERS on or after July 1, 1996, are subject to the 401(a)(17) limit, which restricts the amount of final compensation that can be used to calculate the CalPERS retirement benefit. Employees subject to the limit are exempt from making contributions to CalPERS on earnings that exceed the current year maximum. However, campuses must continue to report the appropriate contribution code and pay the employer portion of contributions on all earnings that accrue in a calendar year, even those above the maximum, so that these employees continue to earn service credit.
For further information, visit the CalPERS web site. The following links provide specific information for the topics listed:
