If you have State Second Tier service, you may be eligible to convert that service credit — or time worked — to First Tier and improve your retirement income.
Second Tier service reduces retirement income, especially for members with many years of service under that tier.
Converting from Second Tier to First Tier can improve your retirement benefit, but it also increases your contributions and cannot be undone. It’s a decision worth reviewing carefully before you act.
You are a state Second Tier member if your formula is:
- 1.25% @ 65 (Classic)
- 1.25% @ 67 (PEPRA)
You can view your retirement formula in myCalPERS on the homepage in the blue box labeled Retirement.
Who may be eligible to convert?
You may be able to convert past Second Tier service if you meet all of these conditions:
- You are not retired
- You have State Second Tier service credit with CalPERS
- You have elected First Tier for your future service credit
- You were an active state member on or after January 1, 2000
If you reinstate after retiring with Second Tier credited service, you may also elect to convert to First Tier if you earn at least one year of service credit from your reinstatement date.
Your conversion options
You can review three main options:
- Convert all of your Second Tier service credit to First Tier
You must first change your CalPERS retirement formula from Second Tier to First Tier on a prospective basis. After the change, First Tier contributions will be withheld from your paycheck. Once those deductions begin, you may elect to convert your past Second Tier service.
- Leave all of your service credit under Second Tier
If you choose this option, no action is required and your service remains under the Second Tier formula.
- Elect First Tier for future service only
This changes your retirement formula to First Tier on a prospective basis but allows you to leave your past service credit under Second Tier. After the change, First Tier contributions will be withheld from your paycheck.
Important things to consider
Before converting, carefully review the decision. The election to convert to First Tier is irrevocable, meaning it cannot be changed later. It will also increase the monthly retirement contributions withheld from your paycheck.
Second Tier and First Tier formula comparisons
The Second Tier formulas that may convert to First Tier are:
- 1.25% at age 65 → 2% at age 55
- 1.25% at age 65 → 2% at age 60
- 1.25% at age 67 → 2% at age 62
Your personnel office can help determine which formula applies to you.
Important Update: Beginning January 1, 2028, the Actuarial Equivalent Reduction (AER) payment option will no longer be available for new service credit purchases. That means members who purchase service credit on or after that date will need to pay the full amount before retiring.
How the cost is calculated
The cost to convert Second Tier service credit may include:
- Retirement contributions you would have paid as a First Tier member, plus interest, minus any Second Tier contributions
- Past service credit purchases originally credited under a Second Tier formula, recalculated as First Tier, plus interest
- Previously refunded First Tier member contributions, plus interest
How to request a conversion
You can request the conversion electronically in myCalPERS:
- Log in to myCalPERS
- Go to the Retirement tab
- Select Service Credit Purchase
- Select Convert to First Tier
After your election is processed, CalPERS will notify your employer. Once payroll reports and First Tier contributions begin, the cost and election details for purchasing your past Second Tier service will appear in myCalPERS.
If you are already in First Tier and want to purchase your past Second Tier service, you can also submit that request online through Available Purchase Options.
Once all required documents are received and eligibility is confirmed, the cost and election details should be available in myCalPERS within 60 days.