Question 1

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 2

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.

Question 3

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 4

What are the survivor benefit options?

Accepted Answer

CalPERS offers four retirement options: Unmodified (no survivor benefit, highest monthly payment), 100% Survivor (your beneficiary receives the same monthly benefit after your death), 75% Survivor, and 50% Survivor. Choosing a survivor option reduces your monthly pension. The reduction depends on your age and your beneficiary's age at retirement.

Question 5

What is service credit?

Accepted Answer

Service credit is the years (and partial years) you have worked under a CalPERS or CalSTRS covered position. One year of full-time employment equals one year of service credit. Part-time employees earn proportional service credit.

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