PERS

The California Public Employees’ Retirement System (PERS) was established by state law in 1932 to provide retirement benefits for state employees. In 1939, public agency and non-teaching school employees were allowed to participate. PERS membership is divided approximately in thirds among current and former employees of the state, schools, and participating public agencies.

PERS is a defined benefit retirement plan. It provides benefits based on a member’s years of service, age, and highest compensation. In addition, benefits are provided for disability and death, with payments in some cases going to survivors or beneficiaries of eligible members.

Membership

Many non-STRS employees enter PERS membership immediately upon employment; however, there are some employees who must work a certain number of hours/days before they can qualify for membership.

Contributions

Members contribute 7% of their creditable compensation into their PERS account. PERS members are also subject to F.I.C.A. (Social Security) tax and Medicare tax. At the end of each fiscal year, interest is credited to the accumulated contributions and interest in each member’s account. The District contributes a percentage of each employee’s creditable compensation; however, employer contributions are not credited to individual member accounts. Employer contributions help fund the benefits payable to members and their beneficiaries.

Service Credit

Service credit is the accumulated period of time, in years and partial years, during which you receive creditable compensation for service as a member. Annual Statements are distributed to all members each fall and is one of your most important PERS records. Make sure you examine your statement carefully for accuracy and report any discrepancies immediately for correction. Also, you may be eligible to purchase service credit for past employment or redeposit previously withdrawn contributions. Additional service will be granted for any unused sick leave; however, sick leave credit cannot be used to meet eligibility requirements for service retirement.

Retirement

The earliest age at which you can retire for service with a monthly benefit is age 50 with at least 5 years of service credit. Your retirement allowance is calculated using the following formula:

Years of Service X Age Factor (2% at age 55) X Final Compensation = Retirement Allowance (Unmodified)

The age factor is the percent of pay to which you are entitled for each year of service credit. This percentage is determined by your age at retirement. Final compensation is the highest average annual compensation earnable by a member during any period of three consecutive years of paid employment covered by PERS.

Termination/Refund

Your PERS member contribution plus the accumulated interest, are refundable upon termination from all PERS covered employment. However, a refund of your contributions terminates your PERS membership, and you will not be eligible for any retirement benefits. Partial refunds are not permitted and employer contributions are not refundable. If you withdraw your contributions and interest before age 59 ½, you may be subject to income tax and a 10% federal excise tax. Contact PERS for more information.

Additional Information

Consult PERS publication "School Members 2% at 55" for additional information including the following:

• Redeposits

• Purchase of Additional Service Credit

• Reduced Workload

• Pre-Retirement Election of an Option

• CalSTRS 403(b) Program

• Home Loan Program

• Long-Term Care

• Publications

• Forms

Or PERS website: www.calpers.ca.gov (Check out the Retirement Benefits Calculator!)