The CalPERS Board of Administration in November approved updated actuarial assumptions based on recent demographic and economic trends that may impact your retirement plans. These assumptions reflect evolving retiree behavior and workplace trends that show slightly longer life expectancies for retirees and beneficiaries, and higher-than-expected salary growth due to inflation.
This process, part of the asset liability management (ALM) review, helps shape our investment strategy and actuarial assumptions for the next four years. It’s a cornerstone of CalPERS’ long-term planning, helping ensure you receive your lifetime retirement benefits.
What This Means for Active Members
The new actuarial assumptions took effect on November 20, and while most members won’t see any changes, here’s what you need to know:
- Retirement Benefit Amounts: If you retired on or after November 20, 2025, and your employer contracted for a 3 to 5% cost-of-living adjustment (COLA), your benefit amount may be slightly lower only if you choose a payment option that provides a continuing benefit to a spouse or beneficiary. If you select the unmodified benefit allowance, you will not experience any changes to your benefit payment amounts.
- Service Credit Purchases: The cost of purchasing certain types of service credit may increase under the new assumptions. To check which service credit types are affected, eligibility requirements, and how to estimate potential costs, view our ALM FAQs page for more information. This change will only affect service credit purchase cost requests submitted on or after November 20, 2025.
What About PEPRA Members?
Most miscellaneous Public Employees’ Pension Reform Act (PEPRA) members won’t see any changes. However, about 60% of public agency safety members will experience an increase in their contribution rates beginning with their July 2027 paycheck. For state and school employees, rates will remain unchanged, except for peace officer and firefighter members under the 2.7% at 57 formula.
By law, PEPRA employees must pay half of the plan’s total normal cost rate. The total normal cost rate is determined by looking at the annual cost of providing benefits to active PEPRA employees for the upcoming fiscal year. Decreases or increases to the PEPRA member contribution rate occur if the current total normal cost rate changes more than 1% from the base total normal cost rate (the rate used to set the current PEPRA member contribution rate).
If you’re a public agency member, you can always check your current and future PEPRA contribution rates on our webpage. We’ll post updates on this webpage once the new 2027-28 fiscal year rates are available.
Learn More
By addressing these complex issues, we’re building a framework that supports financial security for members and sustainability for employers. To explore more about the ALM process and what it means for you, visit our ALM FAQs.