Understanding Your CalPERS Mandatory Contributions
An overview of how CalPERS retirement contributions work, including employee and CSU contribution rates, compensation limits, and key policies that impact your pension calculation.
Benefits
CalPERS is a defined benefit retirement plan that provides lifetime monthly retirement income to eligible CSU employees. Pension amounts are calculated using a formula based on years of service, age at retirement, and final compensation—typically the highest consecutive 12 or 36 months of salary.
CalPERS also provides disability, survivor, and death benefits to eligible members and their beneficiaries.
Employees do not bear investment risk, as CalPERS manages the investment of employer and employee contributions to fund retirement benefits.
Most CSU employees become vested after five years of CalPERS service credit. Service credit may include time worked at other CalPERS-covered agencies, including the State of California and participating public employers.
Retirement program eligibility is based on appointment type, duration, full-time equivalency (FTE), and previous public or reciprocal agency employment. Employees eligible for membership include:
- Full-Time appointments more than six months
- Half-Time appointments (50 percent or more) for one year or longer
- Temporary Faculty are required to enter CalPERS membership commencing with the third consecutive semester appointment at half-time or more (7.5 WTU’s)
There are exceptions to CalPERS membership eligibility, contact the HR office for more information.
| PEPRA Membership | Classic Membership | |
|---|---|---|
| Employment and Membership | Hired by state and new CalPERS member on or after January 1, 2013 |
Hired by state and new CalPERS member between January 15, 2011 and December 31, 2012
CalPERS member prior to January 11, 2011
|
| Retirement Formula | 2%@62 (2N) |
2%@60 (2Z) 2%@55 (08) |
| Employee Contribution* | 8% of gross pay |
5% of gross pay with $513 exclusion 5% of gross pay with $513 exclusion |
| CSU Contribution (FY 24/25) | 26.31% of gross pay |
26.31% of gross pay 26.31% of gross pay |
| Highest Benefit Factor | 2.5%@67+ |
2.418%@63+ 2.5%@63+ |
| Vesting | 5 years |
5 years
5 years
|
| Age Requirement to Retire | 52 |
50 50 |
| Salary used to calculate retirement | Average highest 36 months (subject to cap) |
Average highest 36 months Average highest 12 months |
| 2025 Compensation Limits** | $155,081 |
$350,000
$350,000
|
*As required by the Public Employees' Pension Reform Act (PEPRA), the employee contribution rate reflects a portion of the annual "normal cost" rate. Normal cost rates are set annually by CalPERS and are subject to change.
**Compensation limits for both Classic and PEPRA members do not restrict the salary an employer may pay. However, they do limit the amount of compensation that may be used in calculating benefits under the CalPERS defined benefit plan. These limits directly impact your monthly retirement benefit calculation.
Employees can view the applicable retirement benefit formula chart by choosing one of the membership benefit publications below. Employees uncertain of their benefit formula can contact the HR Office.
Welcome to CalPERS -A Benefits Guide for State Members (New)
CalPERS 2%@55 Formula
CalPERS 2%@60 Formula
CalPERS 2%@62 Formula
PEPRA Membership Clarification:
Under the Public Employees' Pension Reform Act of 2013 (PEPRA), new pension formulas
apply to individuals classified as “new members.” The CSU understands that if an employee
separates from one CalPERS-covered employer and is hired by another after a break
in service of more than six months, the employee is considered a “new member”—unless
the employment change occurs between state entities or public-school employers.
| PEPRA Membership | Classic Membership | |
|---|---|---|
|
OFFICERS |
Hired by state and new CalPERS member on or after January 1, 2013 |
Hired by state and new CalPERS member on or after July 01, 2011
Hired by state and new CalPERS member prior to July 1, 2011
|
|
MANAGEMENT |
Hired by state and new CalPERS member on or after January 1, 2013 |
Hired by state and new CalPERS member on or after January 15, 2011
Hired by state and new CalPERS member prior to January 15, 2011
|
| Retirement Formula | 2.5%@57 (3H/3Z) |
2.5%@55 (3P/3R)
3%@50 (52/54)
|
| Employee Contribution* | 13.25% of gross pay |
8% of gross pay
with $238 exclusion 8% of gross pay
with $238 exclusion |
| CSU Contribution (FY 24/25) | 30.72% of gross pay |
30.72% of gross pay
30.72% of gross pay
|
| Highest Benefit Factor | 2.5%@57+ |
2.5%@55+
3%@50+
|
| Vesting | 5 years |
5 years
5 years
|
| Age Requirement to Retire | 50 |
50
50
|
| Salary used to calculate retirement (subject to cap) | Average highest 36 consecutive months |
Average highest 36 consecutive months
Average highest 12 consecutive months
|
| 2025 Compensation Limits** | $186,096 |
$350,000
$350,000
|
*As required by the Public Employees' Pension Reform Act (PEPRA), the employee contribution rate reflects a portion of the annual "normal cost" rate. Normal cost rates are set annually by CalPERS and are subject to change.
**Compensation limits for both Classic and PEPRA members do not restrict the salary an employer may pay. However, they do limit the amount of compensation that may be used in calculating benefits under the CalPERS defined benefit plan. These limits directly impact your monthly retirement benefit calculation.
Employees can view the applicable retirement benefit formula chart by choosing one of the membership benefit publications below. Employees uncertain of their benefit formula can contact the HR Office.
Welcome to CalPERS -A Benefits Guide for State Members (New)
CalPERS 2.5%57 Formula
CalPERS 2.5%@55 Formula
CalPERS 3%@50 Formula
PEPRA Membership Clarification:
Under the Public Employees' Pension Reform Act of 2013 (PEPRA), new pension formulas
apply to individuals classified as “new members.” The CSU understands that if an employee
separates from one CalPERS-covered employer and is hired by another after a break
in service of more than six months, the employee is considered a “new member”—unless
the employment change occurs between state entities or public-school employers.
Retirement benefits are calculated using a formula with three factors:
Service Credit (years)1 x Benefit Factor (% per year)2 x Final Compensation (Monthly $)3 = Unmodified Allowance ($)4
1Service Credit - Total years of employment with a CalPERS employer. This could include other types of service credit such as sick leave and service credit purchase. Employees can view their Annual Member Statement by logging in to my|CalPERS to view service credit.
2Benefit Factor - Percentage of final compensation for each year of service credit, based on an employee’s age at retirement and retirement formula(s).
3Final Compensation - Employee’s highest average full-time monthly pay rate for 12 or 36 consecutive months of employment, depending upon the employee’s benefit formula (if the employee pays into Social Security, $133.33 per month will be deducted from the employee’s final compensation).
4Unmodified Allowance - Highest benefit payable.
Note: Any unused sick leave is converted to additional service credit if the employee retires within 120 days of separation from employment. Eight hours of sick leave equals one day (.004 of a year of service). It takes 250 days of sick leave to receive one year of service credit (.004 x 250 = 1 year).
Employees who became members of CalPERS on or after 7/1/1996, are subject to the IRC
401(a) (17) limit, which restricts the amount of compensation that can be used to
calculate the CalPERS retirement benefit. Employees who become new members of CalPERS
on or after 1/1/2013, and deemed PEPRA members, are subject to a PEPRA compensation
cap. These amounts represent the maximum salary that can count toward final compensation
and calculation of retirement benefits.
Additional CalPERS Retirement Education Resources and Publications
It is highly recommended to attend Instructor-led or online Member Education classes that are periodically offered. Making a one-on-one appointment at one of CalPERS Regional Offices is a great way to gain valuable knowledge. For additional information, visit CalPERS or call 888-225-7377.