At the November 17, 2021, board meeting, the CalPERS Board adopted new actuarial assumptions that impact retirement benefit amounts for some members and the cost of some present value service credit purchases immediately.
The board reviews both economic and demographic actuarial assumptions every four years as part of the Asset Liability Management (ALM) process. The goal of the ALM process is to balance the expected cost of future pension payments with the expected future investment returns.
While most demographic assumptions changed, the primary demographic assumptions that changed involved the slightly longer life expectancies for retirees and beneficiaries, earlier than expected retirement ages for some safety groups, and higher than expected future pay increase for some groups.
These actuarial changes impact two key areas for members:
- Typically, increased retirement benefit amounts, in general, if you choose a payment option at retirement that provides a benefit for a spouse or beneficiary (it does not impact your retirement if you choose an unmodified benefit allowance).
- Increased cost of service credit purchases for some types of service credit.
How much will my retirement benefit increase?
In general, your retirement allowance may increase by a few dollars ($2-$3) per every $1,000 of your retirement allowance.
How much will the cost to purchase service credit increase?
For most members, the cost increase varies depending on the type of service credit you purchase. See the types of service credit that are impacted in our FAQs under the member section. To see what you may be eligible to purchase and the potential cost, log in to your myCalPERS account and request a service credit purchase estimate.
When do these changes go into effect?
- Retirement applications with a retirement date of November 18, 2021, or after will be calculated using the new rates.
- Service credit purchase requests received by CalPERS November 18, 2021, or after will be calculated using the new rates. If we received your request before this date, then we will use the prior calculation methods.
For More Information
For more information about these changes, visit 2021 ALM Decision FAQs or call our Customer Contact Center at 888 CalPERS (or 888-225-7377).