Retirement - cagov/ODI-Onboarding-and-State-of-CA-Benefits GitHub Wiki

Table of Contents

CalPERS Pension

New State employees are automatically enrolled into the Miscellaneous Tier 1 plan, where the employee contribution is approximately 8% and the state's employer contribution is approximately 32%.

At Retirement: when an employee retires they will receive approximately 2% of the salary they earned at time of separation from the organization.

Example: Jane is hired by the state at an annual salary of $100,000. Employee Contribution: an employee contributes approx. 8% of their salary to their pension. Therefore Jane is contributing approx. $8,000 annually to her pension Employer Contribution: the state contributes approx. 32% of an employees salary to their pension. Therefore the state is contributing $32,000 annually to her pension.

Annually, Jane has $40,000 put aside for her pension. In addition, when Jane retires she will receive $2,000 annually from the state.

please be aware this is an estimate as contribution amounts vary on a few factors (ex. employee has worked for the state in the past) AND rates are determined by CalPERS and changes may be implemented

Civil Service employees contribution rate depends on what Bargaining Unit they are in. These contribution rates can be found in the Bargaining / Contracts page on the CalHR website. Most ODI staff should fall in Unit 1 - Professional, Administrative, Financial, and Staff Services

Exempt employees must complete the State-Appointee Election form in order to contribute to and receive a state pension. Once form submitted to CalPERS, membership will not become effective until first day of following month.

401(K) & 457(b)

Full-time employees

In addition to employee pensions, the state also offers enrollment to Savings Plus, the voluntary retirement program used by the State. There are no Employer Contributions and there is a monthly administrative fee of $1.50. You can learn more about these two programs here:

Key Differences between 401(k) & 457(b)

  • If you plan to retire before age 55 and begin withdrawals immediately, you should know that early withdrawal penalties apply to the 401(k), but not the 457(b) Plan.
  • You can withdraw funds from a 401(k) for a home purchase or college tuition, but not from a 457(b) account.
  • The 457(b) plan contains a "catch up" provision that allows you to contribute a higher amount to make up for the years that you were eligible to contribute but did not contribute the maximum, as long as you remain a State employee during the time you contribute at the higher amount.

Part-time, Student Assistants, Temporary employees

Employees hired to work part-time or temporarily are automatically enrolled in the state's Part-time, Seasonal and Temporary (PST) Employees Retirement Program. PST is mandatory retirement plan where employees contribute 7.5% of each paycheck.

When an employee separates from the state they can close their account and withdraw the full amount (90 days after the last transaction posts into the account).

If an employee stays in state service and converts to a full-time employee, 100% of their PST will automatically transfer to the states 457(b) account under Savings Plus.

Medical Benefits after Retirement

Employees who retire and have worked for the state for at least 10 years are eligible to participate in the state's Dental, Vision, and Health Insurance plans upon retirement. Retirees pay 50% of the cost of their health insurance when they retire at 10 years of service. Each year after that, the percentage they pay goes down 5% until they reach 20 years, where health insurance is at no cost to the retiree. For example:

  • 11 years of service: retirees pay 45% of coverage; state pays 55% of coverage
  • 12 years of service: retirees pay 40% of coverage, state pays 60% of coverage

State Retiree Benefits