If you work for the State of California, or for a local agency or school district that contracts with CalPERS, your pension comes from the California Public Employees' Retirement System. Here's how CalPERS figures it, using CalPERS's own benefit factor charts and publications.
The formula
CalPERS multiplies three numbers: your benefit factor, your years of service credit and your final compensation. The factor is a percentage per year of service, and it depends on which formula you're under and how old you are when you retire.
CalPERS publishes a chart for each formula. For State miscellaneous and industrial members, the charts are 2% at 55, 2% at 60, 2% at 62, 1.25% at 65 and 1.25% at 67. Local miscellaneous formulas include 2% at 55, 2.5% at 55, 2.7% at 55 and 3% at 60. Safety charts include 3% at 50 and 3% at 55, plus 2% at 57, 2.5% at 57 and 2.7% at 57.
The name of a formula is the factor at one age, not a flat rate. Under State miscellaneous 2% at 55, the factor is 1.1% at 50, 2.0% at 55 and 2.5% at 63 or older. Under PEPRA 2% at 62, it's 1.0% at 52, 2.0% at 62 and 2.5% at 67.
Classic and PEPRA
Classic members generally joined before January 1, 2013, or moved from another CalPERS or reciprocal employer without a long break. Their formula depends on their employer's contract and their hire date.
PEPRA members joined on or after January 1, 2013 as new members. Miscellaneous PEPRA members are on 2% at 62, can't retire before 52, use a 36-month final compensation, and have a cap on pensionable pay. For 2026 the cap is $159,733 for members covered by Social Security and $191,679 for those who aren't (CalPERS Circular Letter 200-001-26).
The gap at the same age is large. A State miscellaneous classic member on 2% at 55 who retires at 55 with 30 years gets 60% of final compensation. A PEPRA member retiring at 55 with 30 years gets 1.3% x 30 = 39%.
Final compensation
Final compensation is the average of your highest 12 or 36 consecutive months of pay, depending on your employer's contract and when you joined. PEPRA members always use 36 months. Only pay that CalPERS counts as reportable compensation goes in. Your gross W-2 may be higher than the figure CalPERS uses, so check the compensation on your official estimate.
Vesting
Most members need 5 years of service credit to retire. State Second Tier members need 10. If you leave after vesting and don't take a refund, you can apply for your pension once you reach retirement age.
No lump sum
CalPERS pays the pension as a monthly allowance, with no lump sum option. A member who leaves all CalPERS-covered employment can take a refund of their own contributions plus interest, but that ends their membership and every CalPERS benefit. Employer contributions are never refunded.
Social Security
Most CalPERS members pay into Social Security, but some don't, which is why CalPERS sets two different PEPRA pay caps. If yours isn't covered, the Windfall Elimination Provision used to cut any Social Security you earned elsewhere. The Social Security Fairness Act, signed January 5, 2025, repealed it for benefits payable after December 2023. Check your my Social Security account to confirm the change.
An example
A State miscellaneous member on 2% at 55 retires at 58 with 28 years and $95,000 of final compensation. The factor at 58 is 2.188%. Pension: 28 x 2.188% x $95,000 = about $58,200 a year, or $4,850 a month.
Retiring early costs a lot under these charts. The same member retiring at 50 instead would get a 1.1% factor on whatever service they had by then.
Service credit
Full-time work earns a year of service credit a year, and part-time work earns a proportional share. CalPERS lets members buy some kinds of service credit, such as certain military and earlier public service, and redeposit refunded contributions. The price for many purchases is set to cover the present value of the added benefit, using CalPERS's assumptions. Compare the price with the extra pension: if 2 years cost $40,000 and add 2 x 2% x $120,000 = $4,800 a year, you'd recover the cost in about 8.3 years of retirement.
Payment options
When you retire, you pick how your allowance is paid. The Unmodified Allowance pays the most and stops at your death. Option 1 pays any remaining contributions to your beneficiary after your death. Option 2 continues 100% of your reduced allowance to your beneficiary, and Option 3 continues 50%. Options 2W and 3W add a pop-up, so your allowance rises to the unmodified amount if your beneficiary dies first. Option 4 lets you design a custom survivor benefit. Every option except Unmodified lowers your own check, by an amount that depends on both ages. The choice is permanent once your retirement is processed.
COLA
CalPERS raises allowances each May, starting in the second calendar year after you retire. The increase is the lesser of inflation (measured by the CPI-U) or your employer's contracted COLA, compounded. School and first-tier State retirees have a 2% maximum, Second Tier State retirees get a fixed 3%, and public agencies can contract for 2%, 3%, 4% or 5%. If the computed increase is under 1%, nothing is paid that year. When the COLA falls behind inflation, the Purchasing Power Protection Allowance keeps benefits at no less than 75% of their original purchasing power for State and school retirees and 80% for public agency retirees.
Retiree health
CalPERS also runs the health program for State employees and for local agencies that join it. Whether you can keep coverage in retirement, and how much your employer pays toward it, depends on your employer, your bargaining unit and your service. Ask your HR office for your retiree health vesting schedule before you pick a date. At 65, CalPERS retirees who qualify for Medicare generally have to enroll in Parts A and B and move to a Medicare plan.
Working after retirement
If you go back to work for a CalPERS employer without reinstating, you're generally limited to 960 hours per fiscal year, and retirees under normal retirement age usually have to wait 180 days after retiring before returning, with limited exceptions. Work for an employer outside CalPERS doesn't count against those limits.
What the pension is worth
Run a $4,500 a month allowance starting at 60 through our present value calculator with the 2026 IRS 417(e) rates and mortality table, and it's worth about $730,000 with no COLA, or about $893,000 with a 2% annual COLA. That's often the biggest asset a long-service member owns.
Using the calculator
The CalPERS calculator at the CalPERS calculator uses CalPERS's own factor charts for the common miscellaneous and safety formulas. Enter your formula, service, age and final compensation. Then compare the result with the estimate in your myCalPERS account. If they differ, the usual reasons are part-time service, purchased service that isn't posted yet, or pay that CalPERS doesn't count. Fix those before you retire, not after.