CalPERS Local Miscellaneous 2% at 62 (PEPRA)
This page documents how FinZot models the CalPERS Local Miscellaneous 2% at 62 (PEPRA) defined benefit pension plan.
Who this plan covers: General members of California Public Employees’ Retirement System (CalPERS), local-misc-2-at-62 variant, on or after January 1, 2013: first CalPERS membership (PEPRA new member).
Employee Contributions
Section titled “Employee Contributions”Employee contributions are the portion of salary that the employee pays into the pension fund.
| Field | Value |
|---|---|
| Contribution Rate | 7.75% of salary |
| Tax Treatment | Pre-tax (reduces taxable income) |
Vesting & Retirement Eligibility
Section titled “Vesting & Retirement Eligibility”Vesting
Section titled “Vesting”Vesting determines when an employee has earned the right to receive pension benefits. The following formula must evaluate to TRUE for the employee to be vested:
service_credits >= 5Retirement Eligibility
Section titled “Retirement Eligibility”Retirement eligibility determines when an employee can begin receiving pension payouts. The following formula must evaluate to TRUE:
commencement_age >= 52 AND service_credits >= 5Formula Variables:
service_credits: Years of credited servicecommencement_age: Age when pension payments commence
Benefit Calculation
Section titled “Benefit Calculation”The annual pension benefit is calculated as:
Annual Benefit = Final Compensation × Benefit Factor × Service CreditsFinal Compensation
Section titled “Final Compensation”Final compensation is the salary figure used in the benefit calculation, typically an average of the employee’s highest-earning years.
| Field | Value |
|---|---|
| Method | Highest Consecutive Years |
| Years Averaged | 3 |
Benefit Factor
Section titled “Benefit Factor”The benefit factor is a percentage multiplier that typically varies based on retirement age. Higher ages generally yield higher factors.
IF(commencement_age < 52, 0, MIN(0.025, 0.01 + 0.001 *(commencement_age - 52) + 0.00025 *(IF(commencement_age_months - IF(birth_day_of_month = 1, 0, 1) - 12 * commencement_age >= 3, 1, 0) + IF(commencement_age_months - IF(birth_day_of_month = 1, 0, 1) - 12 * commencement_age >= 6, 1, 0) + IF(commencement_age_months - IF(birth_day_of_month = 1, 0, 1) - 12 * commencement_age >= 9, 1, 0))))Formula Variables:
commencement_age: Age when pension payments commenceservice_credits: Years of credited service
Cost-of-Living Adjustment (COLA)
Section titled “Cost-of-Living Adjustment (COLA)”The COLA formula determines how pension benefits grow over time after retirement to keep pace with inflation.
IF(years_since_retirement >= 2, current_pension_benefit *(1 + MIN(0.02, MAX(0, inflation_rate))), current_pension_benefit)Formula Variables:
initial_pension_benefit: The annual benefit amount at retirementyears_since_retirement: Number of years since retirement began
Tax Treatment
Section titled “Tax Treatment”Pension payouts from this plan are taxable as ordinary income.
Social Security Coverage
Section titled “Social Security Coverage”Whether a CalPERS Local Miscellaneous 2% at 62 (PEPRA) employer participates in Social Security varies from employer to employer, so FinZot does not assume either way. Check a pay stub for a Social Security (OASDI) deduction and set it on the income stream.
Note: FinZot’s pension estimates are for planning purposes only and may not reflect all plan provisions. For official benefit estimates, contact your plan administrator.