Retirement Benefits

Will Budget Cuts Impact My Pension?

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The California governor and legislature passed a state budget (PDF) in June that closes a gap of more than $54 billion due to the COVID-19 recession.

The state budget implemented various measures to offset the deficit, including pay reductions for many active state employees. These pay reductions are scheduled to be in effect from July 2020 through the next two fiscal years, ending June 30, 2022, for most employees.

For most state employees, the pay and benefit reductions bargained between the governor and employee unions will not impact service credit or final compensation for retirement calculation purposes.

Active state employees: Contact your human resources department or union representative to learn what changes may apply to you. Excluded active employees can get information from their human resources office or the California Department of Human Resources.

Local governments and schools across the state are also feeling the squeeze of the pandemic and are being forced to reexamine their fiscal plans to ease budgetary pressures. If you work at a public agency or school district and have questions about the impact of these changes on your benefits, please contact your human resources department.

How Your Pension Is Calculated

Your pension benefit is based on total years of service credit (earned and purchased), benefit factor (for example, 2% at age 55), age at retirement, and final compensation.

It’s important to remember that your final compensation is based on your highest average annual compensation during any consecutive 12- or 36-month period of employment, depending on your collective bargaining agreement or employer contract.

Getting Ready to Retire?

For more information on your retirement benefits, please review your specific member publication, as well as Planning Your Service Retirement (PUB 1) (PDF).

Retirees: If you are a retiree, the pay reduction and furloughs have no impact on the pension you are already receiving or CalPERS’ ability to pay the pension benefits you have already earned.

Stay Up to Date on CalPERS and COVID-19

Your benefits are safe and we’re fully operational. We’re here for you. To get the latest updates on how we’re addressing the COVID-19 pandemic, visit: