Benefits - Retirement

Employees with full-time appointments that exceed six months, or half-time appointments averaging 20 hours per week for one year or longer, are required to be enrolled in the California Public Employees Retirement System (CalPERS). The plan is a defined benefit plan with retirement benefits calculated on age at retirement, years of service, and compensation. Both the CSU and the employee contribute to the employee's CalPERS Retirement Plan. Employees contribute a percentage of gross monthly income minus the applicable offset amount (Gross Income - offset amount x applicable %). Employee contributions are not subject to federal and state taxes.

• Unit 3 - California Faculty Association
  • Prior to 2017 - Plan vesting is at five years of PERS credited service
  • 2017 to current - Plan vesting is at ten years of PERS credited service
• All Other Bargaining Units
  • Prior to 2018 - Plan vesting is at five years of PERS credited service
  • 2018 to current - Plan vesting is at ten years of PERS credited service

Employees excluded from CalPERS membership are covered by the CSU Part Time Retirement Plan also known as the Part-Time Seasonal, Temporary Employees Retirement (PST) Program.

CSU employees who are members of the CalPERS system are in the "State Miscellaneous, First Tier" plan, or one of the Public Safety plans, depending on classification. In addition, due to recent Pension Reform legislation that went into effect on January 1, 2013, please note the previous and new retirement formulas that are applicable to CSU employees:

CSU Employees

Public Safety Employees

Additional Contribution & Retirement Information

Employees in retirement formulas 2% at 62, and 2% at 57 and 2.5% at 57 are not subject to the offset amount.

With the exception of members in the 2% at 62 formula (minimum retirement age is fifty-two (52), employees are eligible to retire and receive a monthly pension benefit when they are at least age 50 and have a minimum of five years of CalPERS-credited service.

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. For 2014, the limit is $260,000.

Employees who become new members of CalPERS on or after 1/1/2013, are subject to a compensation cap of $115,064 if participating in Social Security or $138,077 if not participating in Social Security (such as Public Safety employees). These amounts represent the maximum salary that can count toward final compensation and calculation of retirement benefits for employees that are placed in the 2% at 62, 2.5% at 57, or 2% at 57 retirement formulas.

In addition, once an employee's salary reaches the compensation cap during the year, the employee's retirement contributions will be stopped and restarted in January of the following year.

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).

CalPERS is taking an average of 3 months to calculate sick leave. Once completed, your adjusted pension will be retroactive to date of retirement.

CSU retiree medical, dental and vision benefits are available to employees (and their eligible dependents) who retire within 120 days from the date of separation from employment. Retiring employees may view the Retiring Benefits FAQs for more information.

Applying for CalPERS Service Retirement

Employees should begin their retirement planning at least one year before their anticipated retirement date. Use this Retirement Checklist to help you through the process.

CalPERS Power of Attorney

The CalPERS Special Power of Attorney allows the member to designate a representative or agent to conduct their retirement affairs if they are unable to act on their own behalf.

More information on CalPERS Power of Attorney

CalPERS Beneficiary Designation

The CalPERS Beneficiary Designation form allows the member to designate Primary and Secondary Beneficiaries for payment of specific Death Benefits in the event the member dies before retirement.

More information on CalPERS Beneficiary Designation

Social Security

As a member of CalPERS, employees also participate in Social Security.

• Social Security and Medicare taxes are withheld from your paycheck.
• 2013 withholding rates are 6.2 percent for Social Security and 1.45 percent for Medicare.
• Social Security maximum taxable earnings is $113,700, effective January 1, 2013.
• There is no limit for Medicare.
• Beginning in 2013, an additional Medicare tax of 0.9% will be applied when an employee's wages and compensation exceed $200,000.

FAQs

Retiree Health Benefits Coverage FAQs

The Part-Time Seasonal Temporary (PST) Employees Retirement Program is a mandatory retirement savings program authorized by federal law for employees who are not covered by a retirement system (CalPERS). Savings Plus, part of the California Department of Human Resources, administers the PST Program for California State employees and California State University employees.

If you're a CSU employee who is not covered by Social Security and you're excluded from coverage under CalPERS, you're automatically enrolled in the PST Program. PST employees generally include:

• Part-time employees who work less than half time
• Seasonal employees
• Temporary and Permanent-Intermittent (PI) employees, who work less than six months or 125 days if employed on a daily basis or less than 1,000 hours in a fiscal year (July 1 through June 30) if employed on an hourly basis
• Half-time CSU employees who have less than one academic year of credited service
• Student employees who are resident aliens for tax purposes and are not enrolled at half-time or more

The program deducts 7.5 percent of your pretax wages and deposits it in a PST Program account for you, allowing you to build retirement savings. It's set up as a 457 Plan, a type of retirement savings plan governed by IRS rules.

Your PST Program deductions from your paycheck are invested in a “stable asset” fund (specifically, the Short Term Investment Fund – PST), which preserves capital and provides a stable rate of return. Your account balance consists of the deductions from your paycheck and any potential earnings.

For more information on the PST plan, visit the Savings Plus website.

Eligible employees may defer taxes on a portion of their earnings by investing in the Savings Plus Program. Employees have the option of choosing between the State-Deferred Compensation Plan (457) and the State Thrift Plan 401 (K). The Savings Plus Program offers different investment options plus the opportunity to use a self-managed account to invest in mutual funds.

For more information and to enroll in this program, call Savings Plus at (855) 616-4776 or visit the website at www.savingsplusnow.com.

Eligible employees may participate in an IRC 403(b) tax-sheltered annuity plan. This plan allows an employee to defer a maximum pre-tax deduction of $20,500. There is no employer matching contribution. Fidelity is the Master Administrator.

The Fund Sponsor

Fidelity Investments
877-CSU-3699 (877-278-3699)

Catch-Up Allowance

Employees may be eligible for the 15-Year and/or Age 50 Catch-Up.

If an employee qualifies for both the 15-Year and Age 50 Catch-Up, the 15-Year Catch-Up must be exhausted before the Age 50 Catch-Up is applied.

Employees must demonstrate eligibility by contacting HRM Benefits for the CSU Maximum Contribution Allowance Worksheet.

Change or Reallocation of TSA Contributions

To reallocate your contributions within the Fund Sponsor’s investment options contact your Fund Sponsor: Fidelity Investments

The cutoff day to make changes in Fidelity is the 5th of each month by 9:59 p.m. Pacific Standard Time (PST) or the next business day by 9:59 p.m. if the 5th falls on a holiday or weekend.