How many years of service is required for full pension

The Alternate Retirement Program (ARP) is administered by the California Department of Human Resources (CalHR) and is for new, first-time state miscellaneous and industrial employees hired between August 11, 2004, and June 30, 2013.

There are several important milestones in the first four years of state miscellaneous industrial employment that will transition you into full CalPERS membership.

First 24 Months: ARP Period

You don't receive CalPERS retirement service credit.
Your retirement contributions go into your ARP account managed by CalHR.
Your time worked counts toward retirement and health benefit vesting.

Month 25 Forward

You begin to earn CalPERS retirement service credit.
You move from ARP into CalPERS First Tier membership.
Your ARP funds remain at CalHR.
Your retirement contributions begin to go to CalPERS.

Months 47-49: Decision Time

You'll receive a notice of your upcoming ARP election period in the 45th month following your ARP enrollment date. You'll have three options regarding what to do with your ARP funds once your 47th month arrives:

Option 1 – Receive CalPERS Service Credit
Transfer your ARP funds to CalPERS and receive retirement service credit for the actual amount of time you worked at no additional cost. More service credit increases your pension benefit allowances.
Option 2 – Distribution of Funds
Receive a lump sum distribution. No service credit is earned for your ARP period; however, your time worked will count toward your retirement and health vesting.
Option 3 – Transfer to Savings Plus 401(k) at CalHR
No service credit is earned for your ARP period; however, your time worked will count toward your retirement and health vesting.

If you select Option 2 or 3 during the ARP election period, or take no action, you can purchase your ARP time with CalPERS at a future date, as long as you meet the eligibility requirements. However, the cost to you will be substantially higher than the amount in your ARP account. If you wait to purchase your ARP time at a future date, the law requires you to pay the entire present value cost of the service credit, which includes member and employer contribution amounts and is based on your highest pay rate and other actuarial factors.

To help you make important decisions that can affect your future CalPERS retirement benefit:

Contact your personnel office.
Refer to our Alternate Retirement Program (PUB 10) (PDF).
Visit CalHR.

Transitioning from ARP to Full CalPERS Membership

At the end of your 2-year (24-month) ARP period, you'll begin earning CalPERS service credit and receiving an Annual Member Statement each fall. This statement provides a record of your CalPERS contributions, interest, and service credit. Your service while in ARP will not be included in the total until you either:

Elect to transfer your ARP funds to CalPERS during your ARP election period (47th to 49th month following your ARP enrollment date)
Purchase ARP service credit any time after your ARP election period but before retirement

To view your Annual Member Statement, you'll need to log in to myCalPERS.

If you separate from CalPERS-covered employment, refund your ARP contributions, and return to CalPERS contracted employment; you can elect to purchase your ARP service. The cost for purchasing ARP service credit is calculated at present value. Present value cost includes member and employer contribution amounts and is based on your highest pay rate and other actuarial factors.

Membership Type

As you transition into CalPERS, you'll be either a state miscellaneous or industrial First Tier retirement plan member, based on your job classification (contact your personnel office for more information). However, after your 24th month of employment, you should receive notice from your personnel office that you're eligible to move to the state miscellaneous or industrial Second Tier plan. You'll have 180 days to make this election.

Effective July 1, 2013, Second Tier members started paying 1.5 percent of earnings in monthly member contributions. This contribution rate will be adjusted annually. Since members in the Second Tier plan make minimal contributions, this plan offers a reduced level of benefits at retirement. Be sure to carefully review the information you're provided before making your decision.

Coordinated Plan For ERS Tier 3 and 4 Members
(Articles 14 and 15)

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Eligibility

You will be eligible for a service retirement benefit when you reach age 55 and have five or more years of credited member service. If you are a Tier 3 member, you may retire under Article 14 or Article 15. However, your benefit, in most cases, will be greater under Article 15.

For the full retirement benefit, you must be 62 years old at retirement or, if you have 30 years of credited service, you may retire as early as age 55. With less than 30 years of service, you may retire as early as age 55, but you will receive a reduced benefit.

The Benefit

If you retire with less than 20 years of service credit, your benefit will equal 1.66 percent of your Final Average Salary (FAS) for each year of service.
With 20 to 30 years of service credit, your benefit will equal 2 percent of your FAS, multiplied by your years of credited service.
For each year of credited service beyond 30 years, you will receive 1.5 percent of your FAS.

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Examples:

At age 62, with 19 years of service and an FAS of $35,000:
$35,000 × 1.66% × 19 years =	$11,039 per year or $920 per month
At age 62, with 20 years of service and an FAS of $35,000:
$35,000 × 2% × 20 years =	$14,000 per year or $1,167 per month
At age 62, with 31 years of service and an FAS of $35,000:
$35,000 × 2% × 30 years =	$21,000 per year
	plus
$35,000 × 1.5% × 1 year =	$525 per year
=	$21,525 per year or $1,794 per month

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Estimate Your Pension

Most members can estimate their pension using the benefit calculator in Retirement Online. The calculator uses your salary and service credit information to create an estimate. You can fine-tune your estimate by entering different retirement dates, beneficiaries, earnings, and service credit amounts to see how they affect your potential benefit, and then save or print it. Sign in to your Retirement Online account, go to the ‘My Account Summary’ area of your Account Homepage and click the “Estimate my Pension Benefit” button.

Members in certain circumstances (for example, members who have recently transferred a membership to NYSLRS) are not able to use the Retirement Online calculator at this time. These members should contact us to request an estimate.

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Filing

Your service retirement application must be on file with the Office of the State Comptroller at least 15 days, but not more than 90 days, before the date on which your retirement will occur. The 15-day filing requirement is waived if you are over age 70 at retirement.

To apply for retirement, sign in to your Retirement Online account, go to the ‘My Account Summary’ area of your Account Homepage and click “Apply for Retirement.” You can also apply by mail by submitting the Application for Service Retirement (RS6037).

Read the Receiving Your Benefits section for more information about filing.

How many years of service do I need for a pension?

The minimum retirement age for service retirement for most members is 50 years with five years of service credit. The more service credit you have, the higher your retirement benefits will be.

Can I retire after 10 years of service?

Normal Retirement: With 10 years of service you are vested. You are eligible to receive benefits upon reaching age 60.

Can you retire at 20 years of service?

Members who accumulate 20 or more years of active service are eligible for retirement. There are three non-disability retirement plans currently in effect for active duty retirees. These are Final Pay plan, High-36 Month Average plan, and Military Retirement Reform Act of 1986 (more commonly referred to as REDUX) plan.