Retirement Benefits

Top Terms to Understand Your CalPERS Retirement

There is much to consider when planning your life after retirement. Deciding on a retirement date, submitting forms, and evaluating future income streams are just some of the decisions to consider. There are also plenty of CalPERS-specific terms used to communicate the nuances of these decisions.

We’ve gathered some top terms to help you navigate and understand these important decisions, as well as resources to better plan your next chapter.

Benefit Factor

Your benefit factor is the percentage of pay you are entitled to for each year of CalPERS-covered service. This percentage is a key factor in calculating your pension benefit, along with your age at retirement, and final compensation. Visit our Benefit Factor Charts to view a complete breakdown of the benefit factors available across retirement ages and years of service.

Basic Retirement Calculation: Service Credit mutiplied by benefit factor multiplied by final compensation equals the highest pension ebefit. In other words, the number of years of CalPERS service multiplied by the percentage of pay based on your age multiplied by your highest monthly average salary for a defined period equals your highest possible monthly benefit after you retire from CalPERS.

Our Planning Your Service Retirement (PDF) guide provides a detailed glimpse of how your benefit factor contributes to your final pension amount.

Classic or PEPRA Member

There are few things more important than understanding if you’re a CalPERS classic or PERPA member (or both in some instances).

Here’s a quick video on the Public Employees’ Pension Reform Act (PEPRA) and how it impacts your membership status. In general, if you were hired and enrolled in CalPERS prior to January 1, 2013, then you are considered a classic member. You are considered a PEPRA member if you joined CalPERS for the first time on or after January 1, 2013, and meet the following criteria:

  • You had no prior membership in another public retirement system.
  • You were a member of another public retirement system but were ineligible for reciprocity.

Cost-of-Living Adjustment (COLA)

The cost-of-living adjustment (COLA) is an increase to the retirement benefit available to retirees, survivors, and beneficiaries to help your benefit keep up with inflation. Check out our COLA quick tip video to see how your COLA is calculated.

You’re eligible to receive your first COLA in the second calendar year after your retirement date, with the adjustment being paid in the May 1 warrant period. To decrease the time required to become eligible for your COLA, you’ll want to consider the specific date you choose to retire.

Community Property

In California, all types of retirement benefits are considered community property. This also includes property owned jointly in either marriage or registered domestic partnership that is subject to division when a marriage or partnership ends. A legal separation may also be subject to a division of community property. Visit our Guide to CalPERS Community Property (PDF) to find specific information on how to request your account information, what to do if you’re in a domestic partnership, and other frequently asked questions.

Defined Benefit Plan

Contrary to a defined contribution plan, a defined benefit plan is the primary retirement option you receive as a CalPERS member. These plans are earned pension payments determined by a set formula, and payable for life. Compare this to a defined contribution plan, such as a 401(k) or 457 plan, where benefits are determined not by a formula, but solely on the amount of funds available in the account, plus earnings.

Disability Retirement

If you experience a disabling injury or illness that prevents you from doing your job, you may be eligible for disability retirement. Unlike conventional service retirement, there is no minimum age requirement, and the disability doesn’t need to be job related. To qualify for this retirement, you must have a minimum of five years of service credit (there are some exceptions to this requirement). Review these steps to apply for disability retirement, as well as to learn more about whether you qualify, and how to complete the application.

Final Compensation

Not to be confused with your total pension amount, your final compensation is one of the three main factors that determines your pension amount. It represents the highest average annual compensation during any consecutive 12- or 36-month period of your employment.

We use your full-time pay rate, not your earnings. If you work part-time, we use your full-time equivalent pay rate to determine your final compensation.

Check out our Planning Your Service Retirement (PDF) guide for more information on how your final compensation is determined.

Power of Attorney

At CalPERS, our Special Power of Attorney (POA) allows you to designate a representative or agent, known as your attorney-in-fact, to manage your retirement affairs on your behalf. Should you be unable to conduct these affairs, your attorney will be able to perform important duties such as updating your address, adjusting tax withholdings, and managing retirement benefit elections.

For more information visit our guide on the CalPERS Special Power of Attorney (PDF).


Reciprocity allows you to move from one retirement system to another without losing your benefits. CalPERS has agreements with many public retirement systems in California to allow an employee to move from one public employer to another, within a specified time limit, without losing valuable retirement rights and benefits.

In this process, you will become a member of both systems, you must retire from each separately, and you will receive separate retirement checks from each.

Service Credit

Another key factor in determining your retirement pension is your service credit. This refers to your years of employment with a CalPERS-covered employer. In some cases, other types of service credit (e.g., sick leave and service credit purchases) can be added to your retirement and used to enhance your total pension amount.

A full year of service credit can be earned by working any of the following:

  • 10 months full time (monthly pay employees)
  • 215 days (daily pay employees)
  • 1,720 hours (hourly pay employees)

Check out this short video to see how your CalPERS pension is influenced by your service credit.

Service Credit Purchase

As a major factor in your retirement benefit formula, your service credits grow with every qualifying year of service. In addition, we offer several types of service credit purchases.

Buy early since service credit purchases can be costly, you can log in to myCalPERS and use the Service Credit Cost Estimator to get an idea of the cost of service credit purchases, including:

  • Service Prior to Membership
  • Alternate Retirement Program
  • Military
  • Leave of Absence

Our CalPERS Service Credit Purchase Options (PDF) guide has more details about the types of purchase options available.

Service Retirement

A service retirement is a general term describing one type of retirement and the beginning of when you would start collecting your pension.

Check out our retirement planning checklist for key steps and considerations as the years and months count down to your well-earned retirement.

To learn more about your service retirement, apply, or calculate your benefit, check out our service retirement guide (PDF).

Survivor Continuance

Survivor continuance is an employer-paid monthly benefit payable after your death in retirement to an eligible survivor. Your survivor is any family member defined by law as eligible to receive specific benefits at your death. You cannot choose your survivor since it’s defined by law.

Survivor continuance is provided by law to all state and school members, but public agency employers must contract with CalPERS to provide this benefit. You must have an eligible survivor when you retire, and that survivor must remain eligible until you die.

Temporary Annuity

A temporary annuity is an option for those seeking to adjust their service pension payments. At retirement, you may elect to receive a temporary annuity, which provides an additional dollar amount to enhance your monthly CalPERS pension check for a limited period of time.

Think of this annuity as an “advance” on your future monthly payments.

For more details on selecting and calculating yours, check out our Guide to Your CalPERS Temporary Annuity (PDF).

Unmodified Allowance

You can choose to receive the highest benefit payable at retirement, which is referred to as your unmodified allowance. This allowance provides a monthly benefit to you that ends upon your death if you have not made any modifications. If you select this option at retirement, you cannot select a beneficiary, so no money will be paid out to a beneficiary after your death.