State Second Tier
Current state miscellaneous or industrial Second Tier members, and other members who have past state Second Tier service, may be eligible to convert their Second Tier service credit to a First Tier retirement formula. When you convert past Second Tier service, any Second Tier member contributions paid since July 2013 will be factored into the conversion cost.
Carefully consider your decision to convert from the Second Tier to First Tier retirement formula. Your election to convert to the First Tier retirement formula cannot be changed and will increase the monthly retirement contributions withheld from your paycheck.
You can use the Retirement Estimate Calculator to generate a retirement estimate based on the following scenarios:
- Convert all of your Second Tier service credit to a First Tier retirement formula.
- Leave all of your service credit under the State Second Tier retirement formula.
- Elect your future service under the State First Tier retirement formula, leaving your past service credit under the State Second Tier retirement formula.
In order to convert past Second Tier service, you must meet all of the following conditions:
- You're not retired.
- You have Second Tier service credit with CalPERS.
- You've elected First Tier for your future service credit.
- You were an active state member on or after January 1, 2000.
You can elect to convert Second Tier service to the First Tier retirement formula if you reinstate after retiring with Second Tier credited service. However, you must earn a minimum of one year service credit from your reinstatement date before your next retirement can be based on the First Tier retirement formula.
State Miscellaneous and Industrial Retirement Formulas
The following are the Second Tier retirement formulas with their corresponding First Tier retirement formulas. To determine which formulas apply to you, consult your personnel office.
|Second Tier Retirement Formula||Corresponding First Tier Retirement Formula|
|1.25% at age 65||2% at age 55|
|1.25% at age 65||2% at age 60|
|1.25% at age 67||2% at age 62|
Refer to the State Miscellaneous & Industrial Benefits (PUB 6) (PDF) publication to compare the differences between the retirement formulas.
The cost to convert Second Tier service credit is based on factors that include:
- Past service credit purchases credited under a Second Tier retirement formula recalculated as First Tier (plus interest), if applicable
- Previously refunded First Tier member contributions (plus interest), if applicable
- Retirement contributions you would have paid (plus interest) as a First Tier member, offset by any Second Tier contributions paid since July 2013
Use the Estimating First Tier Contributions (PDF) worksheet to estimate your new contribution amount. Contact your personnel office for more information.
Convert to the First Tier formula by following the steps below.
Step 1 - Elect First Tier for Future Service
If you meet any of the following criteria, skip to Step 2:
- You're an active member in the First Tier retirement formula.
- You're an active Second Tier member and are retiring within six months.
- You're an inactive member and have past Second Tier service.
Active Second Tier members must first make an irrevocable election to enroll in the First Tier retirement formula for the remainder of their state employment. To do this, complete and submit the First Tier Future Election Package (PDF). Once your current formula changes, First Tier retirement contributions will be withheld from your paycheck.
Step 2 - Convert Past Second Tier Service
To convert your past Second Tier service to the First Tier retirement formula, complete and submit the Tier Conversion Cost Information Request (PDF). Once CalPERS receives your form, you'll receive a cost package including the election form(s) and available payment options.
If you're an active member and select a payment plan to pay for the conversion, the deductions for this election will be in addition to your regular, ongoing member retirement contributions.
If you're retiring within six months, this process may not be completed before your actual retirement date. Your retirement benefits may be computed based on the Second Tier service in your account until the conversion and retirement adjustments are complete.