Most people either have a 401(k) or a pension retirement plan. As a CalPERS member, you have a pension plan, where both employee and employers contribute.
It’s important to know what you can do with your pension when changing employers and what questions to ask your new employer about their retirement plan.
Changing Retirement Systems
If your new job is with an eligible county, city, or university system, then you may have the option to change retirement systems while keeping your CalPERS benefits. The process of changing retirement systems is called reciprocity, which allows you to move from one public retirement system to another without losing your benefits.
Of course, there are key things to know about reciprocity:
- There is no transfer of funds or service credit between retirement systems when you establish reciprocity.
- You become a member of both systems and are subject to the rights, benefits, obligations, and membership requirements of each system.
- You must apply to retire from each system separately, and you’ll receive separate retirement allowances from each system.
- You must retire on the same date from each public retirement system participating in a reciprocal agreement for all benefits of reciprocity to apply.
- You must be a member of a defined benefit program. You’re not eligible if you’re enrolled under a cash balance or defined contribution benefit program.
Benefits of Reciprocity
- You’re already familiar with the retirement system.
- Service credit earned in all reciprocal systems will combine to help you meet all vesting and retirement eligibility requirements. This means you don’t “start over” when you move between systems.
- Your highest final average salary earned in any reciprocal system will be used by all systems to calculate your retirement benefit.
Read our helpful guide, When You Change Retirement Systems (PUB 16) (PDF), to view a full list of qualifying public retirement systems with a reciprocity agreement. You can submit a request to establish reciprocity through your myCalPERS account.
Leaving Your CalPERS Employer
If you leave CalPERS-covered employment and aren’t moving to an eligible California public retirement system, then you may either:
- Retire
Leave your accumulated contributions in your account and receive a retirement benefit as soon as you meet the minimum retirement eligibility requirements. View additional information regarding retirement and log in to your myCalPERS member account. - Elect a Refund of Contributions
Receive your accumulated contributions as a direct deposit or rollover. Electing a refund terminates your CalPERS membership and makes you liable for tax deductions and penalties. View additional information regarding refunding. - Leave Contributions on Account and Elect to Retire When Eligible
Leave your accumulated contributions on account until you meet the minimum retirement eligibility requirements or meet the requirements for the federal required minimum distribution of age 72. View additional information regarding retirement requirements and for mandatory distributions.
Leaving a CalPERS-covered employer may also impact your health benefits, long-term care benefits, and deferred compensation plans.
Retirement Plan Questions to Ask Your Employer
Now that you know what you can do with your CalPERS pension, below are some sample questions you can ask your new employer about their retirement plan:
- What plans are offered and what are the benefits?
- Does the employer match employee contributions and how much does it match?
- When can I begin contributing and is there a maximum annual contribution?
- Can I select my own investment options, and how often can I change them?
- What are the plan management or administration fees?
- Are statements, tools, and planning resources available online?
- When can I start to withdraw my funds?